Bollywood producers call 'cut' on multiplex releases

MUMBAI (Reuters) - Bollywood producers insisting on a greater share of box-office revenues are refusing to release new movies in multiplexes, piling on woes in an industry that is already battling a slowdown.

Producers in the world's most prolific movie industry are demanding a 50 percent share in box-office revenues, with multiplex owners favouring a performance-linked model based on a film's budget and star power.

"We value the contribution of multiplexes, but there is a need to re-examine the revenue-sharing model," said actor and producer Aamir Khan at a news conference.

"There is a new order today, and every sector has to earn its fair share. Until that happens, the industry can't be healthy."

Marketing and distribution of all new Bollywood films has been suspended, with analysts estimating revenue losses of about 2.5-3 billion rupees ($50-$60 million) in the April-June quarter.

Multiplexes, which make up about 350 screens of a total of 13,500 screens, are largely concentrated in cities and big towns in India, and have also encouraged the production of low-budget films that are a departure from song-and-dance extravaganzas.

India's filmed entertainment sector, estimated at about $2.2 billion, is forecast to grow by more than 9 percent every year over the next five years, according to consultancy KPMG.

Box-offfice revenues are still less than 10 percent of Hollywood's because of low ticket prices, and standoffs such as this are inevitable in an evolving market, said Rajesh Jain, head of KPMG India's entertainment practice.

"We are mature when it comes to movie-making, but still evolving on the distribution side," he said.