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AMC-Carmike Merger: Huge Blow To Overseas Releases

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AMC-Carmike Merger: Huge Blow To Overseas Releases

Movie buffs are awaiting the Sankranti releases and checking on release dates every now and then. Sankranti releases make it huge with their grand openings all over and overseas collections have become crucial in making the movie blockbuster. There is a huge problem coming towards the big releases on the other side of seas.

Many might have already known about Chinese-owned AMC Entertainment holdings taking over the Carmike theatres in USA for 1.2 Billion deal, only to become the largest theater chain, beating out Regal Cinemas too. With this acquisition, AMC will be adding 2954 screens of Carmike to its own existing 5426 screens. The final deal will be closed only when AMC sells of some 15-20 theaters to satisfy regulatory and those theaters mostly will be from Carmike chain.

This deal is reportedly smacking our films and distributors, as Carmike offers around 65 to 70 percent of revenue to the distributor for a film which collects as big as a million and the percentage slightly varies with movies that collect less. AMC reportedly offers a 45 – 55 percent of revenue while the same goes even down in areas like New York. Our Indian films stretched to become vast market overseas next to Hollywood, but the latest deal is heard to be bringing the huge vacuum for our films at-least for sometime.

With these AMC norms and prices, many distributors are hesitating to pick up films for hefty overseas rates, as there is a tough luck to recover their investment, leave alone the profits. Many distributors who already bought overseas rights of big ticket films are heard to be tormented, as this AMC-Carmike merger most likely closes by this year end. Reports say that President elect Trump is against this merger and won’t let it happen, so the Chinese owned AMC is closing the deal when Obama is still the President.

There is an existing system called a Four-wall distribution, wherein the distributors acquires theaters for rent at-least for two weekends and every ticket revenue goes to the distributor. Big ticket films usually follow the technique and the distributor hikes the price (almost doubles) for recovering the investment as fast as they can. Regal is offering this system at many places in USA and our star hero films usually opt this, that is where we see the ticket price going upto 20$ or 25$ sometimes.

This whole merger is already hinting tough time ahead for medium and high budget films. The big ticket films Singham 3, Khaidi No 150, Gautamiputra Satakarni, Baahubali 2 and Mahesh Babu-Murugadoss film are lined up one after the other, yet this dilemma exists until the biggies of our film industry find a way out to survive. When the situation is critical with star studded films, small films may have to stay at home for a while.

Let us see how this overseas-theater catastrophe passes away, as the demonetization is already taking its toll on Tollywood since a while.

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