SRK and Dilwale deal with Distributors: Business as Usual

So, there’s been a story, really more of a sort of discontented rumble, going on for a while now that I have been ignoring, because I could kind of guess where it was going, and I was waiting for the resolution.  Which happened today, so now I am going to talk about it.

The discontented rumble has been about Dilwale supposedly losing money for distributors.  It’s sort of been dropped all of a piece into articles about how Shahrukh is losing his touch, he’s too old, he’s not challenging himself, Bajirao is a better film, Dilwale is an embarrassment for India, etc. etc.  I’ve been ignoring it because, first, there was no real news to report about it, I mean the box office is what it is.  But secondly, because it is the same sort of story we have heard over and over again, and it never means what people think it means.

First, just the background economics of this.  The way film distribution works in India, the major distributors (Eros, UTV, Yash Raj) buy the rights from the producers for the major territories of India (and abroad.  It used to be that “abroad” was just one territory, but now it is broken down into Middle East, Europe, etc).  Then, they turn around and sell the rights to small distributors within those territories.  And the small distributors sell to smaller distributors and eventually it gets down to the theater owner who is actually paying to rent the film print and exhibit the film.

For Dilwale, Shahrukh opened his own distribution wing.  And then he turned around and sold the distribution rights to small distributors through out India, and those distributors ended up taking a loss.  Which is what everyone is excited about.  Part of the excitement is because, normally, Shahrukh would get the money from some massive corporation like UTV which can more easily swallow a loss.  But this time, the mid-sized local companies were the ones paying him directly, so it feels like he is hurting the common man from his big seaside mansion.

The reason Shahrukh can make money even if the distributors don’t is because distribution rights are always sold on a sliding scale, based on the expected box office take for a film.  So, although Dilwale made tons and tons of money, it did not make as much as expected.  And therefore, the distributors paid more than they ended up making at the box office. Shahrukh made a shrewd business move to get as much money as possible upfront, and a lot of smaller businessman took a big hit.  If I were a distributor, I would probably be shaking my fist at him for getting the best of me.

But I’m not a distributor, and neither are all these reporters and editorial writers and random people on the street who are shaking their heads over this and repeating it over and over and over again.  So the other reason for this excitement and constant repitition of this story is that somehow it is being folded into a narrative of how films like Dilwale, the big fun popular with the masses films, are ruining India.  A discussion of the economics of Dilwale comes out sounding like a discussion of how the Indian film industry, meaning the popular stars and big hit films and all of that which is dismissed as “Bollywood”, is bad for the common man and they just don’t know it yet.

 

This happens all the time.  The English language press loves to pile onto the film industry, using this narrative of the uppity immoral film people who refuse to follow the rules of society and are just out for what they can get.  And the resolution to these torches-and-pitchforks articles is always the same.  I’m thinking, for instance, of the scandal a year or so ago when Salman and some others performed at a party near a riot-torn area.  The press jumped all over them, focusing on the performers paid to be at the party rather than on the powerful politicians throwing the event.  And that forced people like Salman to give interviews saying “all right media!  You are forcing the truth from me!  The ugly secret is…I donated my entire fee to charity!”  That’s what happens every time!  The media uses the names of film stars to bring up excitement and resentment in the public, and make everyone feel superior, and then the end result is a reveal that the immoral film industry is actually more truly “moral” than most other people in India, they just don’t publicize it.

And that same pattern has finally resolved here.  Bollywoodhungama is reporting today that SRK is paying back the loss to the distributors out of his own profits.  And that there is probably a handshake backroom unofficial deal that these same distributors will get first rights to Raees, and pay less for it.  And it isn’t in response to all the backlash in the press, it was already in the works, because this is business as usual for Shahrukh, whenever his film does much worse than anticipated and causes a loss for the distributors.  He did this before with AsokaChalte Chalte and PaheliOm Shanti Om (the Paheli distributors really lucked out if they ended up getting OSO at a lower rate!).  There are obvious business advantages here, of course, he needs to keep the distributors generally happy or they will stop buying any of his films.  But ultimately, he is doing the decent thing and not talking about it, and the public and the press all assumed otherwise, just because he is a movie star.  Again.

(I’m not even getting into the fact that the Dilwale team, lead by Shahrukh, donated 1 crore of their profits to the Chennai flood victims.  As did many many other film stars.)

 

7 thoughts on “SRK and Dilwale deal with Distributors: Business as Usual

  1. Yes thank you for saying this. I couldn’t have said it better myself. People really really need to stop calling it a “flop” movie because the last time I checked, it’s the 6th highest grossing movie of all time. And also, those who are calling it an “embarrassment to India”, this movie has done record breaking business overseas. People all around the world are loving it. It is currently the 4th highest grosser in the overseas market. The only ones who are embarrassing India are you people who are hating on a man who’s trying to make your country proud. Idiots

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    • Yes! People need to figure out the difference between “didn’t live up to the extremely high expectations” and “actually flopped at the box office.” And, as you say, stop calling a film an embarrassment just because it doesn’t happen to be to your particular taste.

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