Our channel checks indicate that distributor share terms have changed slightly in favour of producers until March on a temporary basis

Distributor share for all weeks

First week – 50% – remains same

Second week – 47.5% – distributor share (revised upward from 42.5%)

Third week – 37.5% distributor share (revised upward from 35%)

Fourth week – 30% distributor share – no change

• Exhibitors would earlier pay almost 43-44% distributor share as an annual avg.; basis the above terms it would mean the share going upwards to almost 46-47% approx. which we believe is reasonable and not a big ask from producers
• Further, all these terms are temporary in nature and are there only upto March
• We believe that Tenet should do a lifetime collection of ~RS 15cr whereas Wonder Woman (slated to release in Christmas) should do about Rs 10-12cr; the opening day for Tenet shud be around Rs 3-4cr and opening weekend shud be RS 7-8cr
• The slate for Hindi films as of now is only for medium and small films; large Hindi films like Sooryavanshi and 83 are expected to hit cinemas only by end of March and April onwards
• The larger producers/studios (YRF , Reliance Entertainment) haven’t asked for any change in OTT window so far and are only asking to waive off the VPF fee; some other production houses are asking for change in terms and the industry stands a little divided on that front
• Distributors expect Hindi film collections for industry as a whole to breach 40% of pre covid levels by May/Jun and around 70% by Sep and 100% only toward next year Oct/nov; which means that it will be a slow and steady recovery
• The stocks should see some respite in the cming weeks given some clarity on the cinema  terms with producers; as OTT window change and higher distributor share were a key overhang for the stocks
• Maintain our structural positive stance on the exhibitors