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What is Box Office?

Box Office write for us: Box office’ originated in the Elizabethan era when affluent people would sit in private ‘boxes’ to watch the theatre. Sold ticket for ‘office’ called the box office. A significant portion of the revenue would come from these tickets as they were costlier. In contemporary times, ‘box office collection’ means earnings from ticket sales after a film’s release.

As a discussion about box office numbers has picked momentum after the success of Brahms Astra, here’s what you can expect from trade and understand why producers choose to share details on how much a film is earning and how it impacts the movie-going audience.

What Exactly is Box Office Collection?

In contemporary times, ‘box office collection’ means earnings from ticket sales after a film’s release. Tickets for boxes were sold at an ‘office’, call the box office. A significant portion of the revenue would come from these tickets as they were costlier.

With every passing movie, box office numbers have become increasingly important, especially after the performance of Beachmaster in theatres. Box office numbers help them continue the buzz after its release in theatres. More than ever, people outside the circle of trade and filmmaking are keenly interested in how much money a film makes on its release and consecutive days. From the Kashmir Files to Brahms Astra, from Vikram Veda to Pannarin Selvan, films’ performances at the ticket counters are as much in the news as their creative value.

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Frequently Questions About Box Office Write for us

Q.How is the box office calculation done in India?

ANS. Producer: The person who invests in films. The money that a Producer supports in making a film is called the “Budget”. It includes everything from the remuneration of the actors, technicians and other crew members to transportation and additional costs. Apart from this, once a film is complete, it must be marketed, which calls for “PA (Promotion & Advertisement)” expenses.

Distributor: The Distributor forms the most vital link in this money chain by acting as a medium between Producers and Theatres. The Producer has to deal out their Film to the All India Distributors. The price at which the Producer sells his Film to the distributors is termed “Theatrical Rights”. The Producer can either directly sell the Theatrical Rights to Distributors or make a contract with any Third Party, which in turn has the responsibility to deal with Distributors. In that case, the Producer will get his share from the third party even before his film releases, and all Profit/Loss will be incurrent by the third party only. The Indian film industry is distributed in 14 circuits, each with distributors to represent them. For example, Yash Raj Films distributed their films, while Nadiad Wala Grandson’s had a contract with EROS for Housefull 2.

Exhibitor (Theatre): In layperson’s terms, Exhibitor is nothing but a theatre owner. The theatres form the end of the box office model. On pre-defined agreements with the exhibitors, the distributors hire their theatres to showcase films. There are two types of theatres in India: (i) Single Screens and (ii) Multiplex Chains, and both have different kinds of distributor agreements. This agreement focuses mainly on the “Number of Screens” and “Monetary Returns” to be paid back by theatres to Distributors. Entertainment Tax deducts from the total collections at the ticket window. This tax enforces by individual state governments and thus differs from circuit to circuit. After taxes, a percentage of the full net gross pay back to the Distributors. This return is known as “Distributor Share”.

Q. How is Box Office money distributed?

ANS. A rough example.
Suppose a movie named X at the cost of 20 crores. This means the Producer invested 20 crores in the Film. Nowadays, the trend is to sell the movie to distributors such as reliance entertainment, Yash Raj films, Eros, etc. Movies with good star casts sell at a reasonable price. Usually, producers don’t get a share of the profit or loss.

Suppose distributors pay 35 crores for the movie X. And then invest another ten crores on its promotion. So, the cost is now 45 crores.

Now, these distributors ‘distribute’ the movie to regional distributors who, in turn, distribute it to theatres. Now the collection is distributed among these three tiers. For a distributor to recover 45 crores, the movie should collect about 80 crores. It earns anything above this, meaning the movie made money for Distributor. It should note that the Film also earns through satellite rights, music, etc.
Q. What percentage of the box office collection do the producers keep (in India)?

ANS. Producers in India have two ways in which they earn theatrically from the movies produced by them

Outright / MG Theatrical Rights – The Producers will sell the movie outright to a single Distributor for a flat sum of $ 1.5 – 4 times the movie’s budget, depending on the Actor, Director, and also the Movie in Question. The Producer’s commitments are all over. Beyond this, if the Film Flops- the Producer has no liability for this movie. Example -Ollywood, Tollywood

Distribution-Based Rights – The Producers will hand the movie to the distributors and recover 2/3 – 9/10 of the Distributor Share of the Movie – after the Theatre Owners have raked their share and the Taxes deducted. For instance, say a movie collected Rs. 130 Crore Gross in Tamala means the taxes come to Rs. 30 Crore – hence the Nett Collections come to Rs. 100 Crore and also out of this the Theatres rake around 30% or 30 Crore. The Distributor gets Rs. 70 Crore; hence, the Producer will get between 47 Crore and 63 Crore, depending on the Producer.

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