Box Office India: What makes a film Hit, Flop, Super Hit or Blockbuster?

A lot of our readers wonder how a film that earns around Rs 60 crores, like an Action Jackson, is declared a ‘FLOP’ at the box office. On the other hand, a film like Hate Story 2 that earns just Rs 28 crores, is declared a ‘HIT’.

So how exactly are verdicts like HIT, Flop, Average, Super Hit or Blockbuster given to films?

There are a lot of points to consider before giving a theatrical verdict to a film.

1. The person who creates / packages the film is the called the ‘PRODUCER’. He / she may create the entire project like hiring the director, actors, script-writers, technicians etc.

Examples of leading producers: Rakesh Roshan (FilmKraft Productions), Karan Johar (Dharma Productions), Farhan Akhtar and Ritesh Sidhwani (Excel Entertainment), Sajid Nadiadwala (Nadiadwala Grandson Entertainment), Bhushan Kumar (T-Series) etc.

2. Once a film is ready for release, the producer may decide to sell the film to a ‘Corporate house’ or a ‘Individual distributor’. For example, Sajid Nadiadwala sold Salman Khan’s ‘Kick’ to UTV Motion Pictures; Excel Entertainment sold ‘Don 2’ to ‘Reliance Entertainment’.  Producers always sell it at a price higher than the ‘Cost of Production’ (which is known in the trade as COP). This ensures that the creative producers are safe in terms of the business of the project. To give our readers another example, the COP of Jai Ho was very less, but the film was sold for a much higher price to ‘Eros International’, which was the reason why the film was a failure at the box office. That’s the reason why we hear that the producers (in this case Sohail Khan) made his money, but the distributors (Eros) lost.

Examples of leading distributors

  • Yash Raj Films (Producers + Distributors)
  • Anil Thadani (AA films worldwide) – Movies distributed include Hate Story 2, Yaariyaan, Humpty Sharma ki Dulhania, Hasee toh Phasee, Dirty Picture, Ek Villain.
  • Eros Entertainment(Producers + Distributors) – Distributed films like Happy Ending, Jai Ho, Linga, Ram Leela, Tevar etc.
  • Reliance Entertainment (Producers + Distributors)   – Distributed Don2, Holiday, Singham, Bodyguard
  • Viacom18 (Producers + Distributors) – Distributed Mary Kom
  • Fox Star Studios (Producers + Distributors) – Distributed Bang Bang, My Name is Khan, Jolly LLB, City Lights

3. Once the distributor acquires the project at a premium, they might decide to sell different territories to sub-distributors. These sub-distributors then sell the film to theatre owners (exhibitors).

To understand the business of a film, we have to understand the cost involved at each step. Thus when we claim that a Tevar or Action Jackson have failed, even with reasonably good collections, the costs incurred at each step maybe higher.

Case Study of Arjun Kapoor’s Tevar

  • Boney Kapoor (Producer) invests about Rs 30-35 crore into the film
  • He then finds a buyer (Eros International) who buys the theatrical distribution rights for Rs 48 Crore.
  • Eros International (Distributor) then invests around Rs 12 crore to market (promote) the film.
  • Total costs of Tevar = Rs 60 crore
  • Estimated total revenue from other sources like Music, Satellite rights and Overseas is Rs 18 crore approx.
  • Total cost to recover from theatrical business is Rs 42 crore (Revenue from other sources i.e Rs 18 cr deducted from total costs of Rs 60 cr)

Now, the most important point. If a Distributor has to recover Rs 42 crore from theatrical business, then the film has to collect atleast around Rs 80-85 crore. The reason is, a share from the total collections also goes to the exhibitor (theatre owner). If Tevar collects around 50 crore at the box office, Eros International would only get around 25 crore.

Breakdown of Tevar (all figures are approximates to make it simple for our readers to understand)

  • Money to recover = Rs 42 crore.
  • Expected total collections from theatrical business = Rs 50 crore
  • Distributors Share that Eros International would get (Total recovery) = Rs 25 crore
  • Total Loss = Rs 17 crore

Reason for failure is the high price paid for Tevar by Eros International. If Boney Kapoor had sold the film for a lower price or released the film himself, Tevar would have been a success at the box office even if it collected around Rs 50 – 55 crore.

Finally, based on the costs and various other factors, we then give our box office verdicts to films. Taking the case study of Tevar, here is how much it had to collect to get different verdicts.

  • For Tevar to be a All Time Blockbuster – Rs 175 crore or more.
  • Blockbuster – Rs 140 crore or more
  • Super Hit – Rs 110 crore or higher
  • Hit – Rs 90 crore or higher
  • Average – Rs 70 crore
  • Flop – Anything less than Rs 60 crore

Note: There is no fixed formula for verdicts. In today’s times, trade analysts are a little more lenient when it comes to verdicts. With strict verdicts, Kick wouldn’t be a ‘Blockbuster’ as some distributors lost money (due to high costs). Bang Bang wouldn’t be a HIT and Happy New Year wouldn’t be a ‘Super Hit’.

Also, if a film does well in theatres, the distributor or producer may get a higher price through Satellite Rights, thus additional revenue is generated from other sources if it does well in theatres.

Every film that is released in theatres must be assessed this way to understand its business and final verdicts. Do share your thoughts in the comments section below. Questions can be posted too!

Advertisements

97 Comments

  • thumbs up to the article 👍 I was already about the criteria for verdicts, people who weren’t would benefit from the article.
    people who have questioned Ra. One’s verdict have also been answered.
    Kudos !

  • Nice analysis but most of the times we are unaware of the price at which films are sold to distributors which creates confusion among the audience regarding the verdict of movies.But various other sites consider a movie a success if it collects even a crore more than its production cost which is quite ridiculous.

  • Dear @indicine .

    Thank You very mcuh for explaining the system of revenue with verdict .

    Can you please do the same For Ra.One & let us know the Verdict . Because you have declared Ra.one As Hit , while distributers have lost their Money .

    Please be helpfull & do the needful so that everyone can understand the whole system clearly as many as confusion due to contradiction post’s.

  • This is how it comes….. I knew it already……???? And you perfectly gave example of a disaster film running in theatre……. I smell something fishy in tevar collections….. Not a single man in theatre…empty….not a mosquito even..!!!? From where r those 13cr 2 day collection coming…..?????? …
    How could audience be so fool to watch a film of an actor who does not even have a film which is hit due to his own….!! ????
    My order to industry is to please not torture people with poor artists such as these and bring substantial talent ……..!!

  • Thanks indicine for your insight. Please how Baby needs to be blockbuster, I had it has being sold to AA films for 38 cr. kindly waiting your reply.

  • That is a brilliant article . Now i have clearly understood the entire Box Office System . It depens on Producers, Distributors, Sub – Distributors and exhibitors . @ Indicine Two questions for you after seeing all this : Why Dhoom 2 is not an ATBB ? Because as far as i know all the movies that have been All Time Grossers . For Example : Mughal – E – Azam, Sholay, HAHK, Gadar, Ghajini, 3 Idiots, Dhoom 3 and PK are all All Time Blockbusters . Even some more movies such as MPK, Aankhen (Govinda), Ram Teri Ganga Maili are all All Time Blockbusters because they collected huge money . The next question is really Hate Story 2 a hit ? I have heard it was a flop .

  • @Zeeshan

    You’re right actually. I never understood how exactly was it a hit.

    @Indicine

    This has to be the most informative article of yours in recent times. Very easy to understand and you convey the point exceptionally well. That’s the reason I got addicted to Indicine. I have seen many Bollywood sites but Indicine has a combination of everything. Exceptional articles, Interesting readers and well versed readers like Saksham and passionate fans who love Bollywood.

    Absolute Delight. You guys rock big time. Terrific article!

  • My take- I understand the formula but dont know why distributor share is considered as the key factor in determining a verdict for a film…. Producers produce the film n if they sell the movie n make huge profits then verdict should be based on that aswell as the end theatrical revenue- dont care too much about the middle men in this case distributors- doesn’t seem to me they do much as productions costs are shouldered by the producers and promotion costs shouldered by the exhibitors…. Their investment is risky granted but for the amount of work they put in they get what they deserve- pay a reasonable amount n get lucky i.e an Aashiqui 2 or foolishly pay a large amount n get their fingers burnt i.e Ra One, Tevar or Kites….

    • @Navin, in the olden days, before corporate houses took over Bollywood, some producers sold territories in advance to individual distributors. For example, Rakesh Roshan still sticks to this business strategy. He pre-sold Krrish 3 to individual producers before the film went on floors. So film business was all about distributors recovering their investment. If they don’t make money, there would be no buyers, films won’t be made. It’s a little different now, but it’s still important that distributors recover their investment.

      @Saksham, Dhoom 2 was produced and distributed by YRF. Not sure about the exact costs, but it was one of the costliest films of its time. Hate Story 2 did well.

  • This article actually explains why we make “Formula Films.”

    I was quite skeptical about Karan Johar when he said, “I cant afford making Lunch Box.”
    But if I was Johar, I’d say the same thing. I mean, yes it gives me acclaim, respect but it is one hell of a risky project. Nobody wants to lose money here and with so much of risk involved in one film, we are bound to come up with shortcuts by repeating the tried and tested formula.

    I should in fact appreciate him for coming up with a risky My Name is Khan where you have a superstar protagonist breaking stereotypes in big-budget entertainer. Very Interesting article. It makes me wonder how people like Anurag Kashyap, Dibakaar Banerjee or Vishal Bharadwaj make serious films without any commercial compromises!

  • A 130cr film Ra One which made a nett of just 120cr and did not cross 10 million overseas is still declared a hit. When trade tried all their very best to salvage the film from being called a flop there came another never heard story about a 20cr UK subsidy.What if we consider the market price of SRK or let us give a subsidy by calculating with Yashraj price of SRK.

  • @gj007… I have never understood how Ram Gopal Varma continued to direct so many films inspite of so many disasters. Who were his investors? Kashyap has made money on a few films I think, but not sure about Vishal Bhardwaj.

    @Indicine.. great article. I don’t think I have missed even one article on your site in the last 2 years. This is one of your best. I liked articles like Movie Ticket Pricing Strategy, Question and Answer articles, Career analysis of stars, Top 5 grossers between 2000 – 2015.. and innumerous other articles. Great job.

  • Very nice article Indicine. I agree with you that we are far too lenient on awarding movies hit/super hit/BB status..
    I feel ATBB should be a movie which breaks records and universally loved..Week 2, 3, 4 gives a fair indication of positive WOM. (Movie should collect at least 300% of Investment)
    Similarly if people are loosing money it cant be called as BB.

  • @Neeraj

    I think Ramu gets his investors through “Contacts.” Those who are more keen on converting their black money into white by losing it in his films. That way, they can avoid income tax enquiry and Ramu can make his films.

    Yeah Anurag and Vishal have both made successful films. Dev D, Omkara (I think it was a semi-hit), kaminey, Wassyepur.

  • Wow! I loved reading this article.

    @indicine:I feel this article has made me sure that BOI has underreported Krrish 3’s collection.
    According to BOI, Krrish 3 did 176 crores in India. Also, they declared Krrish 3 a Blockbuster! ! I have two questions:

    1.I mean Krrish 3’s total cost was around 125 crores. How can it become a BlockBuster with only 176 crores if its total cost is so HIGH ? It should have been a Superhit or Hit, I guess! Isn’t it?

    2. Which House had distributed for Krrish 3? Was it Filmkraft itself or any other Banner?

    • @Nipun, we have already published our take on the Krrish 3 controversy long ago. No point dragging the issue. Irrespective of what the actuals are, the collections of Krrish 3 will always be controversial.

  • Paragraph –
    Now, the most important point. If a Distributor has to recover Rs 42 crore……………If Tevar collects around 50 crore at the box office, Eros International would only get around 25 crore.
    @indicine this means that distributer gives film to theatre owner free of cost ?

  • Very Good Article #Indicine….
    But Plz Reply Is Tevar Really Tax Free In U.P……….
    And Why..??
    And How A Film Bacome Tax Free..??

  • just one question.
    Is it true that distributors or studios get a bigger cut of the revenue from the opening weekend of films?

    • @Ajay Rocks, Yes the multiplex share reduces every week. Distributors / Producers make the most in Week 1. With every passing week their share reduces and exhibitors (theatre owners) earn more.

Leave a Comment