REFUND FOR FLOPS: IS IT A GOOD THING?
A-list Bollywood stars compensate distributors if their home production fails. Analysts tell us why
With A-list actors such as Shah Rukh Khan (left), Salman Khan (above right), Ajay Devgn, Hrithik Roshan, Akshay Kumar, and Ranbir Kapoor (right) turning producers, the trend of compensating distributors for a flop is also gaining ground.
When Salman’s Eid release Tubelight blinked out, he reportedly refunded `55 crore to the distributors. In August, when Shah Rukh Kha’s Jab Harry Met Sejal bombed, distributors took their cue from Salman and demanded that SRK refund their money. Though no confirmation came from the actor’s side on this, Shah Rukh had given back 50% of the money to the distributors of his 2015 movie Dilwale, which also tanked.
If a film flops, how does an actor-producer refund distributors without burning a hole in his — or her — own pocket? Trade analyst Atul Mohan explains, “Producers earn from satellite rights. The movies are exclusively sold to leading channels. So, they get the money value in advance, from `400 crore to `1,000 crore. Now, even digital rights have come into the picture, with big players like Amazon and Netflix entering the game, offering the same kind of money as satellite channels... So [producers] are in a position to bear the loss.”
Ranbir Kapoor, whose production Jagga Jasoos was one of the high-profile flops of the year, said in an earlier interview, “If someone loses money on something and you have made money out of it, it’s good to compensate.”
It’s not a new practice. Subhash Ghai compensated distributors when his 1995 film Trimurti flopped; this ensured he had enough buyers for his next films, Pardes (1997) and Taal (1999). Raj Kapoor’s bigbudget 1970 film Mera Naam Joker incurred huge losses, and he gave distributors a bigger cut when his next film, Bobby (1973), released.
According to Mohan, this trend is a “goodwill gesture” from the actors to secure their positioning. Filmmaker R. Balki agrees, saying, “It’s a great gesture and will help form strong relationships.”
However, film critic Omar Qureshi believes that unless distributors look at content as much as star power, this will remain a “high-risk lowreward business”.