The South Indian film industry comprising Tamil, Telugu, Malayalam and Kannada films, have jointly decided to opt for a shutdown from 1 March, to take on the Digital Service Providers (DSP). This means that for the third time in a span of less than an year Tamil producers are closing shop and there will be no new releases from March 1. There is no official word on whether it will be a complete shutdown, as the exhibitors are likely to keep away from the strike.
The conflict is basically between the south Indian film producers and DSPs such as Qube, UFO over the Virtual Print Fee (VPF).
The VPF for a regional film being charged by DSPs in south Indian cinema theatres work out to almost Rs 22,500 per screen for the producers. The VPF includes cost of hiring, installing digital equipment, operational activity and delivery of content via digital distribution in theatres. In return, the DSPs charge a fee for distribution and claim a slice of the advertising revenue of the cinemas advertisements. Now producers want the Rs 22,500 charged to be reduced by half and advertisement confined to 8 minutes, plus the two trailers to be telecast along with the film should be free.
Tamil Film Producers Council chief Vishal said the producers will be forced to join the shutdown as digital service providers like Qube and UFO did not slash their charges. Vishal explains: "The major chunk of our profit goes to them. We have attended the meeting and informed them of our stance. They had originally promised us that the prices would be slashed after five years. But 12 years have passed since theatre projection moved from prints to digital, and the rates are so high that we are forced to pay over Rs 27 lakh for a film per month to get it released in 100 centres. We are likely to shut down production and will not release any new films from March 1 till our demands are met."
Senthil Kumar, co-Founder Qube Cinema Technologies, which is the market leader among DSPs in Tamil Nadu, further explains: "When the film industry began embracing digital cinema, companies such as Qube Cinema Technologies were instrumental in creating infrastructure for digital distribution in theatres. From costly and outdated print technology we helped screens to go for cheaper and far more effective digital projection. In return, we charge a fee for distribution and claim a slice of the advertising revenue of the cinemas. We have only helped the film industry. If the theatres buy their own equipment, like major multiplex players - PVR Cinemas, SPI Cinemas, Inox Leisure " there is no need to pay us a fee. But for many others we have given the technology, operational and maintenance costs free. Somebody has to pay for the equipment for digital distribution."
The producers say that a considerable number of years have passed since the investment on equipment was made, and that the costs have been recouped. A leading Tamil producer says: "These DSPs have been milking us all these years; they are making a lot of money through advertisements, which is being played along with our films".
Vishal adds that the digital distribution cost for a big-budget movie should be reduced by more than half as it is the producer who is indirectly paying for equipment. He says, "From now on, we will pay only for mastering, providing the digital key and delivery. We have formed a joint action committee to protest against the monopolistic attitude of DSPs. One final meeting will be held with the DSPs in Bangalore on 24 February. If they don't heed to our requests we will be forced to shut down and there will be no new releases in south Indian languages from 1 March."