In October 2015, representatives of Indian movie exhibitors—owners or heads of companies that operate multiplexes and single-screen theatres—gathered for a lavish lunch meeting at the JW Marriott Hotel in Mumbai’s Juhu area. Every theatre owner, big or small, had been invited.
The host that day was Rentrak, a global media-measurement and research company headquartered in the United States, which had announced that it would be opening an India office in Hyderabad. Rentrak calculates, among other things, box-office figures for Hollywood and other film industries, and claims to track 95 percent of the international box office. It had chosen the entertainment-industry veteran Rajkumar Akella to head its Indian subsidiary. At the Marriott meeting, Akella was making one of the earliest of several efforts he has made over the last two years to convince exhibitors to collaborate with Rentrak India and bring accuracy and transparency to box-office measurements in the country.
But the meeting did not go as Akella had anticipated. An industry executive who was present at the meeting told me that PVR—the largest cinema chain in the country, with 469 screens to its name at the time—objected to tying up with Rentrak. However, the industry executive said, the PVR’s representatives did not give reasons for their opposition. “The undercurrent in the room was that they”—some of the exhibitors—“were reluctant to give out their numbers because they were probably fudging them,” he told me.
“Fudging” of box-office collections is an age-old practice in India. The reported box-office figures of Bollywood have long been dispiritingly unreliable. Inflation of figures is rampant, as creating an impression that a film has been successful not only helps everyone involved with it, but it can also facilitate money laundering. At other times, figures are deflated in order to evade taxes. As a result, a true picture of the business side of the Indian film industry never quite emerges.
The figures that currently appear in the Indian media are mostly calculated and reported by several independent organisations run by those the industry calls “trade analysts.” In March, I spoke to the trade analyst Taran Adarsh, also the editor of Trade Guide magazine, who told me how these numbers are computed. For years, Adarsh has relied on trusted representatives calling in from the country’s 14 distribution circuits, many of which still retain their colonial-era names. These include Mumbai, Delhi/Uttar Pradesh, East Punjab (includes Punjab, Haryana, Chandigarh, Himachal Pradesh, and Jammu & Kashmir), Central India (includes north and east Madhya Pradesh), Central Provinces and Berar (includes south and west Madhya Pradesh, Chhattisgarh, and Vidarbha region in Maharashtra), Mysore (and the rest of Karnataka), Tamil Nadu and so on. The representatives gather figures through incessant phone calls to exhibitors. Today, Adarsh told me, the existence of cloud-based e-ticketing is making the process “smoother and more accurate” for him and other trade analysts, who each have a similar network of their own.
These numbers go on to be reported all across the media. Well-known trade analysts such as Adarsh, Komal Nahta, Amod Mehra, Amul Mohan and Atul Mohan (the last two are unrelated to each other) write for, and lead, the editorial for publications that cover the entertainment industry from a business perspective, aside from appearing on television shows and news panels as industry experts. Fan clubs of popular stars duke it out on social media over whose films have earned more money, and which of them therefore is more bankable. Fascination with a film entering the so-called “Rs 100-crore club”—a reference to a film grossing at least Rs 100 crore domestically—has seeped into popular culture and mainstream entertainment news reporting. After the psychological thriller Ghajini (2008) became the first Indian film to cross that barrier in the early days of 2009, the Rs 100-crore mark has become synonymous with the idea of success. Though now there are several films whose box-office collections go into hundreds of crores. Adarsh, too, said that the media has become more aggressive in its coverage of box-office figures.
However, even a cursory glance at the different sources of figures suggests that the numbers reported by such publications cannot be relied on. In “Why You Can’t Trust Bollywood Box-Office Numbers,” an article published on the website Film Companion in February, Mohini Chaudhuri points out the discrepancies in the reporting of numbers. “According to the trade website boxofficeindia.com, the nine-day collection of Khan’s latest film Raees is Rs 114.50 crore,” she wrote. “Whereas koimoi.com has listed the figure as Rs 122.36 crore. It’s not just Raees. Collections of the other big film that released along with it—producer Rakesh Roshan’s Kaabil—are just as confusing. There too, boxofficeindia.com lists its 10-day collection as Rs 69.50 crore whereas koimoi.com shows Rs 97.03 crore. That’s over a Rs 20 crore difference in data.” Adarsh published figures for these films in the same time frame on the website Bollywood Hungama: his calculation was exactly the same as Koimoi.com for Raees, Rs 122.36 crore, but he offered a completely different figure for Kaabil, of Rs 84.69 crore.
Akella, along with many other prominent Bollywood business experts, told me that there are two kinds of figures: the true figures, which industry insiders share with each other on WhatsApp groups; and the false, usually inflated ones—deviations from actual figures are anywhere between 2 percent and 15 percent—that are shared publicly.
There are several reasons for fudging numbers. The most significant one is that there exists a direct conflict of interest: trade analysts run publications that producers advertise in. They also want to maintain good relations with filmmakers and famous actors—who often also happen to be producers—so that they can get interviews with them for their publications or television shows. Inflating figures helps everyone involved. “For example, it’s quite a done thing”—at multiplexes—“to fudge box-office numbers by manipulating food and beverage sales,” the industry executive told me. “This way you can curry favour with studios, producers and stars and reap several benefits in the longer run—such as preferential show timings for this and subsequent releases, movie premieres that get you more publicity etcetera.” Reporting higher numbers can also help in laundering money. This connivance between film producers, trade analysts, distributors and exhibitors benefits everyone across the value chain, while stifling competition, and benefitting the black economy.
Producers and stars get to call their films successes and maintain this fiction in the eyes of the movie-going public, even if the industry is aware of the reality. In star-crazy markets—especially in Tamil, Telugu, and Malayalam cinema, in which the likes of Rajinikanth, Mahesh Babu, and Mohanlal and Mammooty command cult-like followings—the pressure to over-report figures so as to not upset emotional fans is also a driving factor. “There’s undue pressure from fan associations as well as the desire to report high box-office numbers, as that is fashionable nowadays,” Akella told me.
Deflation of figures is more common in non-studio-driven Bollywood and many regional markets, particularly Tamil and Telugu cinema, where large chunks of funding comes from what Akella calls “the unorganised sector”—in the industry, the term refers to businessmen who are interested in cinema but who are averse to paying taxes. “There is under-reporting because there is tax-evasion at every level: from producers to exhibitors,” he said. “At the grassroots level, a lot of tax authorities aren’t even interested in enforcing the rules.” In fact, insiders allege that some exhibitors are told by the tax guys, “Why are you showing so much? Show lesser earnings and the rest can be split amongst all of us.” Another common trick employed by single-screen theatres—once witnessed first-hand by this writer at a ramshackle Chennai theatre during the first screening of the Rajinikanth-starrer Kabali, in July 2016—is the indiscriminate addition of “phantom” plastic chairs in theatres over and above normal seating capacities, for which legitimate tickets are sold, sometimes at higher rates than usual.
These are the ills that Akella claims his organisation is fighting. In February 2016, Rentrak and its global offices merged with the media-measurement and analytics company comScore, also based in the US, in a $768-million deal. Akella stayed on as managing director (India-theatrical) of comScore India. “For years, many people benefitted from the opaqueness of the system,” he said, “but now things have changed. We operate in 65 countries in the world and since Bollywood films now go to roughly 50 of them, at least, we will now, finally, be able to give exhibitors a consolidated view.”
ComScore attaches a “patch” to the point-of-sales device at theatres that are equipped with e-ticketing, which provides the company direct data through a software. “As soon as a ticket is sold, a report is generated—sometimes real-time, sometimes at the end of every hour, and sometimes at the end of a day—and sent to us,” Akella said. “Not only does this benefit the industry at large, it also helps exhibitors consolidate screen advertising revenue”—in-theatre advertising—“which is currently only 1 percent of the entire revenue stream—about Rs 650 crore, which is extremely low. To grow, it needs currency. With accurate data about how many people are coming to theatres, we can provide that currency.”
But comScore has found it difficult to make inroads. A source closely associated with a leading multiplex chain that is on board with comScore told me that for the longest time, every company was wary that they would end up marginalising themselves by taking the plunge and upsetting the status quo that was beneficial to them. E-ticketing also has not yet reached most of the single-screens. Of the roughly 9,000 such theatres, only somewhere between 1,000 and 2,000 theatres have espoused e-ticketing, according to Akella. But he believes that e-ticketing is spreading fast. “The point-of-sales registers have become affordable—they cost between Rs 10,000 and 15,000,” he told me. “Moreover, internet connectivity through 4G and WiFi has improved dramatically in the last three years. They have fewer and fewer reasons not to convert.”
Manoj Desai, executive director of Mumbai’s G7 Multiplex, as well as the famed single-screener Maratha Mandir, agreed with Akella. Having converted to e-ticketing only a year earlier, he told me in May that it had increased footfalls at his theatres. “I’d say our occupancies have gone up from 50 percent to 70-80 percent thanks to us introducing e-ticketing and online booking on BookMyShow,” he said, when we met at his office inside Maratha Mandir. “We still keep 30 percent of the tickets at the counter, because many of our patrons are not comfortable using all this technology yet. But overall, it has only benefitted us because people like the convenience.”
He has not signed up with comScore yet, but lauds the idea of a transparent third party that will independently track box-office figures. “In 40 years of business, I have never given out wrong numbers, despite knowing everyone in the industry and getting phone call after phone call,” he said assertively. “First-time producers have pleaded with me, saying that if I don’t give out the false figures, they will not be able to make a second film. I have always responded with ‘Koi baat nahi, hone do’”—no matter, let it happen.
In January, PVR reversed its earlier stance and partnered with comScore India. ComScore has now inked deals with nearly every multiplex chain in India barring one: Inox. They are now receiving real-time box-office sales data from roughly 2,300 of India’s roughly 11,000 screens, according to Akella. The theatres they cover, however, account for more than 50 percent of the total revenue generated by Bollywood and Hollywood movies in India. They plan to start publishing their numbers as soon as it reaches 80 percent. The job is more than half-done.