Understanding Share, Gross and Nett

Telugu Film Industry or in fact any film business in India runs on three terms in general, that are, Share, Gross and Nett. There is a lot of confusion among the general audience who look at the business from a distance and they just believe what the producers release as the collected figures and at times they say we collected this much amount as share and this amount as gross and when you do not know the difference you end up believing wrong numbers. Basically, Gross is the term used to define the complete collection of the film from a specified area of business or the entire released centres. For example, if a ticket price is Rs 100. Then the no of tickets sold for that particular show, say 500, owing to the capacity of the theatre, then 500*100= 50000 is the gross that one show has earned from that one theatre.

As we have different classes and consequently different rates for them, the cumulative gross for one show would be calculated this way, if balcony ticket price is 100, then 100* no of tickets sold for balcony seating area of the theatre + (if 60 is the second class pricing then, 60* no of second class tickets sold) + (40 is the low class ticket then, 40* no of lower class tickets sold). This gives gross for a single show from a single theatre from an area and when it is a multiplex, since there won’t be class differences, if 120 is the ticket price then gross amount earned for the show would be 120* no of tickets sold for show. The gross for one theatre per day is calculated with no of tickets per show per different classes * no of shows screened for that day.

So when we say, Khaidi No 150 collected 10 crores gross from a said area, then it means, the film has collected 10 crores from all the theatres it has been showing from that area for the said no of days with said no of shows. Now, Nett Gross is calculated from this total Gross before calculating the Share. Nett Gross is the amount of collection that a film collected after a screening or show, from a theatre after subtracting the rent and government tax from the Total Gross. For Example, 10 crores Total Gross of Khaidi No. 150 will come to 8.50 crores to 8.65 crores, after subtracting the rents and government tax from the Total Gross amount. This is called Nett Gross the movie earned.

From the Nett Gross, the distributor and exhibitor shares are subtracted to get the producer share. Share amount reported is nothing but the profits earned by the producer and distributor after giving the exhibitor his profit from the collection. For Example, A theatre exhibiting Khaidi No 150 reports a collection of Rs. 2,50,000 per 4 shows at the end of the day as gross. Then Nett Gross will be Nett Gross = 2,50,000 – Rent – Government Tax Hypothetically, say Rent which includes electricity bill, sound maintainance, theatre maintainance and sundry cleaning charges is 50,000 and tax is at 15% . The Nett Gross collection of the film comes to be from one theatre per 4 shows per day, Nett Gross = 2,50,000 – 50,000 – 37,500 = 1,62,500. This Nett Gross is then divided as Distributor, exhibitor and producer shares. The Share normally reported is the Nett Gross of the film in our Telugu Industry as the producers most of the times sell off the rights of distribution of a film to a Distributor to outright rates like 4 crs per East Godavari, 5 crs to Ceded area like that. So 4 crs is the amount the producer has already earned even before screening his film in any theatre from the East Godavari area.

In a ideal situation, from Nett Gross, the percentage that a exhibitor and distributor agree upon for exhibiting the movie in that particular theatre, is how the share is calculated. If it 60% 40% then, from the Nett Gross, say Rs 1,62,500 from our previous example, then 97,500 is the distributor share and 65,000 is the exhibitor share of the collected amount. If distributor is the person who took the theatre for lease then the percent he has to give to exhibitor reduces to salaries that je has to pay per month or exhibition basis. There are Share Guarantees, Minimum Guarantees and Fixed Hires that exhibitors, that is, theatre owners pay to the distributors before taking the movie and these are added at the end of the first day or first week collections of the movie. This is nothing but the amount a theatre owner promises to pay to a Distributor irrespective of the collections that the movie manages to register over the course of that week.

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