Bollywood actor Arjun Kapoor recently provided a candid and insightful analysis of the dramatic changes in film economics and budgeting in 2025, pointing out that the business has become less of a predictable enterprise and more akin to “gambling” or “Russian Roulette” for outsiders. His breakdown highlighted a complete flip in the industry’s traditional revenue model, where theatrical box office success is no longer the guaranteed baseline for a film’s budget and profitability.
One of the key points Kapoor emphasized was the common misconception about theatrical revenue. When a film is reported to have earned ₹100 crore at the box office, the producer does not actually pocket that entire amount. He explained that roughly 50% of the box office collection goes towards exhibition and various taxes, leaving the distributor with about half the gross.
For instance, a ₹500 crore blockbuster doesn’t translate into a ₹500 crore profit for the producer. Instead, the final theatrical revenue that makes it back to the filmmakers is typically between ₹150 to ₹200 crore. Overseas collections offer another revenue stream, but the sharing model is also different, often splitting at a 45-55% or 40-60% ratio.
* Producer’s Take: Only about 30-40% of the gross box office is realized as actual producer revenue from theatrical runs.
Distributors often pay a Minimum Guarantee upfront to the producer. This cash flow is crucial for financing the film, especially for new filmmakers without massive star backing.
Kapoor noted that the film business economics have fundamentally shifted since the pre-pandemic era. Previously, the theatrical revenue was the core business, establishing the budget and profitability of a film, with satellite rights being the biggest post-theatrical income.
However, in 2025, the dynamic has reversed. Theatrical collections are now a bonus, not the foundation.
“The economics of our industry has completely flipped now,” Kapoor stated. “Today, you need to first determine what your digital, satellite, and music would be because that’s the base value of your film.”
Advertisements have shifted from traditional satellite TV to social media and YouTube, impacting the value of satellite rights. Income from Over-The-Top (OTT) digital platforms and music streaming/downloads has become the guaranteed floor for a film’s budget.
Unlike the pre-2020 landscape where a ₹100 crore film could reliably guarantee about 75% recovery from theatres, the current box office is highly unpredictable. A film can perform exceptionally well (₹500 crore) or completely crash (₹5 crore) with no middle ground.
The overall message from Arjun Kapoor is clear: filmmaking has become an incredibly high-risk venture where the business model must be multi-layered. Producers and filmmakers can no longer rely on a simple Excel sheet or just a star’s presence to ensure success. Instead, the entire project must be strategized with the revenue streams from digital, satellite, and music rights secured first, making the theatrical run a valuable, but no longer essential, top-up. To know such latest updates, stay tuned to tellyboosters.com Thank you!
