AncillaryrevenuetohelpYRFtide overThugsofHindostandebacle

After breaking records with an opening-day collection of over ~500 million (net after tax), the response to Yash Raj Films’ (YRF’s) ThugsofHindostantook a nosedive, falling drastically over the weekend. The film finished its opening weekend, an extended four-day festive weekend, with ~1.23 billion in domestic box office collection. Given the start it had, experts said had the film been appreciated by audiences, it could have collected up to ~1.8 billion in the first weekend itself. Its first week collection has been ~1.32 billion, a far cry from what YRF expected it to make.

The film’s massive budget— ~2.2 billion, coupled with the sound thrashing it has got from critics and moviegoers alike, means that profitability at the box office is now practically impossible. Considering the current system of working in the industry, the film needs to make ~4.4 billion for everyone in the eco-system — producers, distributors and exhibitors — to break even and make profits. The possibility of that happening through domestic box office collections is almost nil. Trade pundits estimate that Thugs of Hindostan will make at most ~2 billion in its lifetime.

“As a thumb rule, a film’s lifetime collection is double its haul in the opening weekend. There First day box office collection – (Hindi, Tamil and Telugu) First weekend Expected lifetime Ancillary revenue estimate (onlyforYRF)

Estimated loss at box office (to be shared byYRF and its distributors/exhibitors)

are exceptions such as Queen and, more recently, Badhai Ho, which exceeded expectations and were surprise hits. But, by and large, the thumb rule applies. By the calculation, Thugs of Hindostan is looking at a collection of at most ~2 billion in four weeks (which is considered to be a film’s lifetime at the box office on an average). YRF had hoped that the film would breach the ~-4 billion mark, but the outright rejection it has received has foiled those hopes,” says a distributor.

The film’s collection fell 44 per cent from Day One to Day Two, as it collected ~282.5 million on Friday, November 9 (it released on Thursday, November 8).

The business continued to take a hit as it collected ~227.5 million on Saturday (November 10), and just Rs 172.5 million on Sunday. The biggest dip, however, came onMonday (November 12), when the film collected a mere Rs 55 million. This was to be expected as the festive period got over.

Those in the know, however, pointed out that despite the film's dismal run at the box office, YRF may come out of the debacle fairly unscathed financially. It will be the exhibitors and smaller distributors who will take almost 75 per cent of the hit. “The ~1.5- 2 billion deficit in the film's collection will hurt exhibitors and distributors the most. Many of the deals have been signed on a minimum guarantee basis. This means the risk is primarily taken by the exhibitor,” says another film executive in the know.

While YRF has hedged its risk through its distribution model in India, it has also fortified the ancillary revenue streams for the movie. It has an ongoing deal with Amazon Prime Video for OTT streaming rights, and has also sold the satellite rights of the film to Sony Pictures Network India (SPN). The two together are estimated to fetch YRF close to ~700 million. In addition, the film's distribution rights in China have been sold to distribution firm E Stars for an estimated ~1 billion. This means that the studio will be able to break-even and make profits with the help of ancillary revenues. Additionally, the film has been released abroad as well, and has collected around ~400 million so far, further adding to YRF's kitty.

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