Komal Nahata explains distribution system in simple words.

https://youtu.be/-d_fWLt62Gk

That was insightful. So there are different systems. Has he described how a movie is declared hit? And is it affected by the system used?

Incredibly informative. Tfs. Will save it and watch it for understanding the system.

I wish to pursue an MA in film distribution and marketing so this is a gold mine for me.

Originally posted by: Jaitreya23

That was insightful. So there are different systems. Has he described how a movie is declared hit? And is it affected by the system used?

He has in the past.

"Flop: If a film can't even cover its investment by the distributor, it is termed a flop.

Average: If a film manages to simply recover its cost, it is an average fare.

Commission Earner: When a film recovers the investment and, over and above that, gets in revenues of 25% more, it is termed a commission earner. Thus, if the distributor's total investment in a film is Rs. 2 crore, and it does a business of Rs. 2.50 crore, it is termed a commission earner. 25% of Rs. 2 crore is Rs. 50 lakh which is the amount of commission which belongs to the distributor to cover his expenses of releasing the film.

Overflow: When a film crosses the commission mark, the revenues thereafter are to be shared between the producer and distributor. The producer gets a share in the 'overflow' business, generally fifty-fifty. Such sharing makes the film an overflow film. Overflow films can be further categorised as under, depending on the quantum of overflow.

Semi-Hit: A film which does a business that is double the distributor's investment in it, is termed a semi-hit. In such a case, the producer gets handsome overflow from the distributor.

Hit: If a film more than doubles its investment in the distributor's hands, it is deemed to be a hit.

Super-Hit: If the returns on a film are much more than double the investment, it is termed a super-hit.

Super Duper Hit/Blockbuster: Returns are almost triple the investment."

I believe this model was generally followed to the T up until the mid-noughties. Since then all hell has broken loose and we have had a deluge of fake hits.

IMO if you get your hands on Nahta's annual verdicts in the Film Information magazine (ignore what he says in the media), you can get a decent idea of which films were the genuine hits of the year.