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Why overseas business is vital for Indian films

October 9, 2007
Shah Rukh Khan, who rarely delivers a flop in North America and the United Kingdom, had the last laugh two years ago when box-office pundits declared his home production Paheli a flop. True, the film was a big disappointment grossing about $5 million. But abroad, it grossed about $4 million. Besides, it was not a mega budget film like Kabhi Khushi Kabhie Gham, having cost less than half of that film's $6 million cost.

Shah Rukh, Bollywood insiders say, broke even and made a small profit because of the film's strong run abroad.

The big budget film Salaam-E-Ishq is considered by some to be a commercial disaster. But the fact that it was a runaway hit in North America, the UK and Gulf countries, grossing over $4 million, rescued its producers.

The importance of the $40 million overseas market is understood better when the returns to the producers are factored in. In India, because of the exorbitant entertainment tax, a producer gets just about 35 percent of the box-office gross. But from a film's gross abroad, a producer can net about 55 percent.

The recent hit Heyy Babyy grossed about $11 million in India in its first week. It grossed about $3 million in the key international territories. While no one can deny the importance of a film's business in India, the eagerness with which producers await reports from abroad is not difficult to understand when one remembers how substantial the foreign rentals (after deducting distribution and theatre rents) are.

One of the biggest hits this year, the romantic comedy Partner, has grossed about $25 million. But we won't get a full picture of its success till we add to the domestic gross $4 million the film grossed outside India.

The overseas market is certainly driven by big names and star casts. When Kaho Naa... Pyaar Hai became a big hit in India and made Hrithik Roshan a superstar, the film had weak business on both sides of the Atlantic. Ditto for Dhoom which was an also ran film here.

But by the time Dhoom 2 arrived last year, audiences abroad had recognised Hrithik and Abhishek Bachchan as formidable stars. Dhoom 2 went on to become a big money-grabber everywhere it was released.

Also read: A look at Shah Rukh Khan's Paheli!

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