While film producers are demanding a 50:50 share in box office revenues, multiplexes favour a performance-linked revenue sharing model, based on the film's budget, star-power and other such criteria.

"Marketing and distribution of all new films set to release from April 4 onwards has been suspended," producer Mukesh Bhatt, told reporters on Monday, on behalf of Mumbai's film producers.

On Tuesday, multiplex owners responded to the freeze, saying the producers were being unreasonable in their demands, and that grading a film on the basis of its box office performance was the best revenue-sharing model.

The city's Hindi film industry, popularly known as Bollywood, produces around 1,000 films a year.

Several big budget films were set to release in that period, and as much as 2.5-3.0 billion rupees riding on the first quarter on these films, Priti Shahani, Vice President of Indian Films, said.

Trade analyst Komal Nahta said the two sides had no choice but to reach a settlement on the issue.