"We keep hearing that 90% of films are flops and nobody even attempts to understand what it really means. How can any industry run if it is losing money 90% of the time?
In reality this is how it happens.
Let's say a producer spends 10 Crores in making a movie which goes in payments to various artistes, technicians, suppliers etc. Then let's say somebody buys it for 12 Crores. The buyer further retails it to various others lets say for a sum total of 13 Crores and the film finally collects 15 crore. Now this would be a case of the film making money for everyone involved.
Let's say now the producer spent 16 Crore but it was bought only for 12 crore because the sale price never depends on the cost price. It depends on the producers' compulsion to sell to safeguard himself and the buyer's perception and vision of its street value with the consumer. In the above case for the producer it is a flop but for the buyer it is a hit. This is as per the financial part of it.
Coming to the creative part DARR is a super hit for Shahrukh and a super flop for Sunny Deol as far as their star branding is concerned.
Often you will hear about a film's opening in terms of percentage. Let's say a film opens in 10 theatres having a capacity of 200 seats each. On the first screening if all shows are full it will register as 100% opening meaning 2000 people saw it. But if the distributor opens it in 20 theatres and it registers 50% opening then it is considered below the mark. But the bottom line is that still 2000 people saw.
Fair enough that the additional theatres will incur extra theatre rentals and print costs but that decision will always be with the distributor of the concerned circuit on his perception and vision of how many people will watch it and has nothing to do with the filmmaker but eventually it is the filmmaker's branding which will suffer on account of ignorance and of a decision made by someone else.
To sum it up strictly from a filmmaker's perspective I would define a hit and flop in terms of what the film cost to the producer and how much he could recover on the first immediate sale. Any further trading of it is strictly subject to various individuals decisions of how and how not to market it which cannot be controlled by the filmmaker."