SO WHERE SHOULD I START ?
I’ve wrote half a dozen articles for Insplag previously, I always did my best to keep the points as neutral as possible but this time I couldn’t stop myself from getting emotional. But I know readers will lose interest If I my start this article like a Bala film . So I’ll start with the local body entertainment tax and its effect on Kollywood .
Mersal‘s historic opening in Tamil Nadu had given false hope to the big names in Kollywood. They assumed audience who came to watch Mersal have accepted the new ticket prices. First thing, Mersal is a Vijay film, its a open secret that whenever a Vijay, Ajith or Rajinikanth film releases, ticket prices were being illegally hiked to recover maximum investments in opening week/weekend itself.
It has been happening for a long time so this ain’t a big deal for their films. People will come and a solid opening is literally guaranteed.
WHY DID VISHAL & CO AGREE TO HAVE LOCAL BODIES ENTERTAINMENT TAX ?
They saw it as a blessing in disguise. Though local body tax was to effect all films in Tamil Nadu, Vishal wanted to take advantage of the situation. He demanded separate slabs for Tamil & Non-Tamil films.
They saw it as a blessing in disguise. Though local body tax was to effect all films in Tamil Nadu, Vishal wanted to take advantage of the situation. He demanded separate slabs for Tamil & Non-Tamil films.
That is :-
Tamil films – 8%
Other Language films – 15%
English films – 20%
Tamil films – 8%
Other Language films – 15%
English films – 20%
So GST+LBET :-
Tamil films – 26% (18% + 8%) to 36% (28% + 8%)
Other Language films – 33% (18% + 15%) to 43% (28% + 15%)
English films – 38% (18% + 20%) to 48% (28% + 20%)
Tamil films – 26% (18% + 8%) to 36% (28% + 8%)
Other Language films – 33% (18% + 15%) to 43% (28% + 15%)
English films – 38% (18% + 20%) to 48% (28% + 20%)
CHENGALPET MG ABOLISHMENT :-
Though theaters had a brief history with huge losses in big budget films in the past, it was only in Lingaa they understood they have to fend for themselves.
Though theaters had a brief history with huge losses in big budget films in the past, it was only in Lingaa they understood they have to fend for themselves.
The only reason why theaters payed huge MGs to sign big budget films was because of the firm belief that it would reap in huge profits. Initially MGs used to be 30% of the lead actor’s highest revenue in a theater, so theaters would pay the MG assuming an average film of the actor will earn at least 30% of his best. Over the years MGs have went from being 30% of an actor’s best revenue to “best revenue+5% to 10%” which means even If a film beats the actor’s best revenue by a very low margin, there would still be chances for loss. As losses began to increase, no. of theaters paying MG decreased.
Lingaa Chengalpet distributor bought the film for 14 crores and got 6 crores worth MG from select theaters, in the end both distributor and theaters suffered huge losses . This resulted in the abolishment of MG in Chengalpet.
Shankar’s I became a relief for theaters as Aascar Ravichandran didn’t demand MG. Instead he asked for 70:30 share terms. Considering the hype “I” had, Chengalpet theaters felt Aascar‘s demands were reasonable and signed the agreement without any second thoughts. “I” became the highest grossing film after Endhiran in Chengalpet area and theaters were very happy with the revenue.
Lingaa Chengalpet distributor bought the film for 14 crores and got 6 crores worth MG from select theaters, in the end both distributor and theaters suffered huge losses . This resulted in the abolishment of MG in Chengalpet.
Shankar’s I became a relief for theaters as Aascar Ravichandran didn’t demand MG. Instead he asked for 70:30 share terms. Considering the hype “I” had, Chengalpet theaters felt Aascar‘s demands were reasonable and signed the agreement without any second thoughts. “I” became the highest grossing film after Endhiran in Chengalpet area and theaters were very happy with the revenue.
Following this,
Chengalpet theaters began to look for alternative revenue as Tamil film terms started becoming unreasonable. That is because a discussion between distributors and producers somehow got leaked in theaters circle.
Chengalpet theaters began to look for alternative revenue as Tamil film terms started becoming unreasonable. That is because a discussion between distributors and producers somehow got leaked in theaters circle.
It goes like this,
There were certain biggies that went over budget and overall content was also mediocre . Producers knew the film will fail, so to cut down the losses, they decided to burden theaters with Lingaa like MGs (Actor’s best revenue +5% to 10%).
There were certain biggies that went over budget and overall content was also mediocre . Producers knew the film will fail, so to cut down the losses, they decided to burden theaters with Lingaa like MGs (Actor’s best revenue +5% to 10%).
Theaters were shocked to learn about producer/distributor’s selfishness and decided not to agree with their unreasonable demands under any circumstance. Luckily help came in the form of medium budget blockbusters and Non-Tamil films.
Medium budget films blockbusters : Kaaki Sattai, Kanchana 2, Kaaka Muttai, Maya, Naanum Rowdy Dhaan & Thani Oruvan
Kaaki Sattai released in Exam season and still managed to still draw reasonable crowd to theaters. The film’s success hinted about Sivakarthikeyan‘s market increasing with every film.
Thani Oruvan in particular was an unexpected surprise, in many theaters the film broke lifetime records of biggies like Mankatha, Arrambam, Singam 2 & Thuppakki.
Since AGS released Thani Oruvan on their own, they were directly involved in booking theaters for the film. They gave reasonable terms like 40:60, 45:55, 50:50. In the long run, Thani Oruvan made both AGS Entertainment and Chengalpet theaters very happy.
Medium budget films blockbusters : Kaaki Sattai, Kanchana 2, Kaaka Muttai, Maya, Naanum Rowdy Dhaan & Thani Oruvan
Kaaki Sattai released in Exam season and still managed to still draw reasonable crowd to theaters. The film’s success hinted about Sivakarthikeyan‘s market increasing with every film.
Thani Oruvan in particular was an unexpected surprise, in many theaters the film broke lifetime records of biggies like Mankatha, Arrambam, Singam 2 & Thuppakki. Since AGS released Thani Oruvan on their own, they were directly involved in booking theaters for the film. They gave reasonable terms like 40:60, 45:55, 50:50. In the long run, Thani Oruvan made both AGS Entertainment and Chengalpet theaters very happy.
Non-Tamil films : Furious 7, Avengers : Age of Ultron, Jurassic World, Premam, Baahubali : The Beginning & Srimanthudu.
Furious 7 was the first Hollywood film to get wide release through local digital projections like UFO & QUBE. Even in B & C centers, collections were on par with medium/big budget films . Jurassic World also released the same way and broke
Furious 7‘s lifetime record in many centers. Though Age of Ultron released on a comparatively smaller scale, the film still did very good biz.
Furious 7‘s lifetime record in many centers. Though Age of Ultron released on a comparatively smaller scale, the film still did very good biz.
Coming to Premam, it had once in a lifetime kinda run, the impact left by the film can still be felt (Malare is still there in the playlist of many Non-Malayalam audience). Baahubali : The Beginning was the biggest shock of 2015. Though the film was shot simultaneously in Tamil, Prabhas & Rana had no face value. Repeat audience came purely on merit of the unique theatrical experience the film gave.
April 2016 : Thanu vs Chengalpet theaters :-
Theri‘s business started with a false propaganda. Thanu claimed Theri‘s budget was over 80 crores and would become a sure blockbuster. In Chengalpet, Thanu was indirectly handling Theri‘s release in the name of a new distributor from North India. Thanu’s demand of unreasonable MGs meant there is huge possibility of facing loss even If Theri generates the highest revenue for a Vijay film. Aware of the fact that Thanu is a master in fooling national media with fake collections, theaters knew Thanu will cover up the news even If Theri fails to recover the MGs. So they decided If Thanu doesn’t agree for 70:30 share terms, they won’t screen Theri.
Theri‘s business started with a false propaganda. Thanu claimed Theri‘s budget was over 80 crores and would become a sure blockbuster. In Chengalpet, Thanu was indirectly handling Theri‘s release in the name of a new distributor from North India. Thanu’s demand of unreasonable MGs meant there is huge possibility of facing loss even If Theri generates the highest revenue for a Vijay film. Aware of the fact that Thanu is a master in fooling national media with fake collections, theaters knew Thanu will cover up the news even If Theri fails to recover the MGs. So they decided If Thanu doesn’t agree for 70:30 share terms, they won’t screen Theri.
Thanu treats theaters as cruel as Adolf Hitler treated Jews. He didn’t like Chengalpet theaters standing on their feet, he pulled off many publicity gimmicks to make theaters look like villains in the eyes of the media. But Chengalpet theaters stood strong together and didn’t bow down to Thanu’s unreasonable demands.
Guess who became their savior in Theri‘s absence ?
It was Jungle Book. It was the highest grosser of 2016 for many Chengalpet theaters after Kabali. Many biggies like REMO, Irumugan, Rajini Murugan & 24 lagged behind the Hollywood Action adventure film.
Guess who became their savior in Theri‘s absence ?
It was Jungle Book. It was the highest grosser of 2016 for many Chengalpet theaters after Kabali. Many biggies like REMO, Irumugan, Rajini Murugan & 24 lagged behind the Hollywood Action adventure film.
The success of Jungle Book & Dangal later in 2016 proved that Chengalpet theaters can rely on Non-Tamil films in case Tamil films underperform. Producer(s) wish to make theaters suffer loss for their own mistake couldn’t be fulfilled in Chengalpet because they had alternate content. Non-Tamil films have slowly started to find audience in Rest of Tamil Nadu as well, as a result producers and few distributors needed excessive supply of gelusil to cool themselves.
Now I hope readers will understand why Vishal and co demanded separate local body tax slabs for Non-Tamil films. Vishal himself had bitter experience with Dangal. The Aamir Khan film trashed Kaththi Sandai even in B & C centers. This made Vishal think Kaththi Sandai would have succeeded If not for Dangal, he couldn’t digest the fact that Kaththi Sandai failed because of its horrible content.
Vishal & Co thought If tax increases, ticket price will also increase so audience will watch more Tamil films. In other words, If Non-Tamil films revenue decreases because of tax, theaters will be forced to continue running poorly performing Tamil films. This plan also had another objective, they wanted to control multiplexes, that was something even Bollywood couldn’t do. Making things worse, Mersal‘s success made them over confident.
I feel it was purely bad timing, Mersal was the first mainstream release after LBET came into effect, the film's success made many producers think people will watch all films like before and they can afford new prices.
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