Hyderabad's Single-Screen Theatres Embrace Revenue-Sharing to Combat Losses
In a transformative development for the regional film exhibition sector, 23 single-screen theatres across Hyderabad have officially transitioned from the traditional fixed rental model to a dynamic percentage-based revenue-sharing system. This pivotal change, which took effect on Friday, marks a strategic alignment with the long-standing practices of multiplex chains and represents a critical survival measure for struggling independent cinema operators.
Industry Leaders Cite Necessity of Change
The announcement was formally made by the Telangana State Film Chamber of Commerce, highlighting the dire financial circumstances prompting this overhaul. Suniel Narang, President of the Chamber, provided a stark assessment of the situation, stating, "Single-screen theatre owners have been incurring heavy losses under the existing rental model. This move is essential for the survival of single-screen theatres because the level of losses was such that many were on the verge of shutting down."
Narang further elaborated that even recent increases in ticket prices, such as jumps from ₹175 to ₹275, failed to provide relief to theatre owners under the old system, as the additional revenue did not translate to their benefit.
Creating a Balanced Risk-Sharing Mechanism
Suresh Babu, President of the Telugu Film Chamber of Commerce, emphasized the fairness and logic behind the new approach. "This model creates a more balanced risk-sharing mechanism between exhibitors and distributors," he explained. "If multiplexes can operate successfully on a percentage basis, there is absolutely no reason single screens should not adopt the same principle. In fact, exhibitors are now offering better terms—around 60% instead of the previous 50%."
Regarding the potential impact on the film release calendar and box office dynamics, Babu assured that no drastic changes are anticipated. He characterized the shift as "just a slight correction in the system" that will foster a more sustainable ecosystem for all stakeholders.
Detailed Structure of the New Revenue-Sharing Agreement
Under the newly implemented framework, theatres will no longer pay fixed rents to film distributors. Instead, they will share ticket earnings according to a sliding scale that adjusts weekly:
- Week 1: The distributor receives 60% of ticket revenue, while the theatre retains 40%.
- Week 2: The revenue split becomes an equal 50-50 share between distributor and theatre.
- Week 3: The theatre's share increases to 60%, with the distributor receiving 40%.
This graduated structure is designed to incentivize longer theatrical runs and provide theatres with greater financial stability as a film's exhibition period extends.
Broader Implications for the Film Industry
The move by Hyderabad's single-screen theatres is seen as a significant step toward modernizing the exhibition landscape in Telangana. By adopting a model that has proven successful for multiplexes, these traditional venues aim to enhance their competitiveness and operational viability. The change reflects a growing recognition within the industry that flexible, performance-based agreements are crucial in an era of evolving audience preferences and economic pressures.
Observers note that this shift could set a precedent for other regions, encouraging single-screen theatres nationwide to reconsider their business models to ensure long-term sustainability and continued contribution to India's diverse cinematic culture.
