The surprising "Numbers" game

A while ago I had published this write up on Return on Investment determining a "hit" or a "flop" as opposed to gross collections (the key word I have an issue with is "gross" as opposed to "net"). For
anyone who has ever balanced their own checkbook for starters, it is KEY that unless you are making NET numbers, it really does not add up to anything.

So when I go to this site and it's determination of a hit or flop, it surprises me that the Bollywood film industry "really does not behave like an industry," despite many of it's companies being publically
held entities (hence accountable to the shareholder for the BOTTOM line, not the TOP line)

Refer: http://www.boxofficeindia.com/cpages.php?pageName=earnings

Now this gives some surprising "financial misstatements."

A film like RACE is declared a SUPER HIT…….and the definition is……
GROSS COLLECTIONS!!!

Ok, so may I add, what about the COST OF MAKING and the COST OF THE ACTORS/CREW/LOCATION/CARS BLOWING UP, ETC, ETC.

I'll be surprised if (unless special deals were done), it is NOT in the region of Rs 35-40 crores (it is rumored that actors such as Akshay Kumar charge Rs 17 crores, so based on that this film has at
least 5 if not 6 in that category , so do the math).

Hell, what I am then interpreting is not "YESSSSS" but more of a "WHEW!!" after a two week run, it has just about recovered it's cost and from what I learned in accounting….just about recovering
it's cost…does not correlate to a SUPER HIT!!! So can we have a redefinition please or should we be heading to Mumbai to teach these folks ACCOUNTING 101!!! Then again I always thought desis had a
smart, inherent business sense…but what do I know.

Also add to the costs of the "super hit" film, the cost of showing it in the various theaters and the number of times per day (mind you each is a distinct and added cost, nothing comes free in this world)
and the cost of shipping prints…anyone having LIFTED a 35 mm film knows that whether it is FEDEX/DHL/UPS they all charge by the weight and a couple of cans of 35 mm film and you don't need to hit the gym for a while.

Now compare this, in the same chart, to a film like MITHYA. I am only guessing, but let's take a max of Rs 1 to Rs 1.5 crore for it's making (possibly filmed in and around Mumbai and with super actors,
not necessarily stars) and it has already made Rs 5.4 crores. Do the math! Do the accounting! All of you are capable of that. It correlates to a return on investment of approx 400%.

Oh and just by the way, it did not even do a theatrical in the US, had a very limited theatrical in India, straight to DVD from day one and release one in the US. Not sure what the situation was in Canada/Europe/Middle East.

Now if I take the sales from cable/dvd in India and foreign territories/netflix/blockbuster/airlines I can tell you that 400% will correlate to perhaps 700% since all of these sales can happen without shipping massive 35mm cans across the globe. That shipment will be the cost of the purchaser, once the sale has happened.

So after spending 10 plus years in accounting with all the Big 4 across 3 continents, what part of super, in the super hit, am I missing, accounting and finance wise.

Do let me know, cause I am at a loss here.

Also what about that whole concept of "per screen collection" vs "all screens and all the related costs of all the screens," again the same argument of "gross" vs "net"