Kalaipuli S. Thanu, president, Tamil Nadu Film Producers’ Council, says the business has changed from providing an affordable service to becoming a monopoly which has hurt smaller films in a big way. “In the beginning, digital distribution networks came into the market and provided digital projectors at lower costs and offered to show our films at an affordable rate. Slowly, they began to charge more and also started collecting advertising revenue during intervals, which amounts to several crores. We’re saying a cut from this revenue stream would help our films break even.”
In retort, Senthil Kumar, co-founder, Qube Cinema, says the income from airing advertisements before the film and during intervals belongs to theatre owners and not producers. In a press release, they have stated, “Multiplex chains sell their own advertising while a few single screens sell their ad space to independent agencies. Qube has a legal contract only with some theatres for advertising, and if producers disagree that the advertising rights belong to them, then they should discuss this question with theatres. Theatres have multiple revenue streams, including advertising, food sales, parking, etc. All these revenue streams depend on audiences coming to watch a film.”
Digital service providers also pointed to revenue earned by television and FM channels. “Television channels that play movies earn advertising revenue and FM radio stations that play movie songs also earn advertising revenue. Such advertising is a key revenue stream for television and radio and is not shared with the producer.”
Thanu also asks why they have asked for a per-show rate rather than a fixed rate for a film. “Instead of Rs. 325 per show, why can’t they charge Rs. 40,000 or Rs. 50,000 per film for a particular number of shows?” asks Thanu. “Earlier, even renting a reel camera used to cost just Rs. 7,000 per day. Renting digital cameras cost Rs. 50,000 upwards. At times, I feel film reels were better. Releasing a film in more centres too comes at a higher marketing cost. If you work out a pattern where films run for a longer time in fewer screens, the profits would be higher.”
As the story goes to print, producers are demanding a one-third share from advertising revenues and a reduction in per-show rates to ensure that shows will go on smoothly.
What they’re saying
Tamil Nadu Film Producers’ Council
1) Digital service providers UFO, QUBE Cinema have been charging exorbitant rates for screening our films in theatres, including a recent price hike. Stick to one rate
2) Digital companies earn as much as Rs. 400 crore through advertising revenue from playing our films
3) Digital service providers charge even for changes made on the print due to censor cuts
4) Small films stand to lose because of the high rates charged by digital service providers
QUBE Cinema
1)We haven’t changed rates in several years. We charge Rs. 325 + taxes per show for a minimum of 7 shows. This is cheaper than Rs. 425 + taxes per show in other states. This is also much cheaper than Rs. 60,000 per reel used earlier.
2)In fiscal year 2014, UFO Moviez earned Rs. 90.77 crore nett of sales commissions across India from advertising revenue. Qube, in FY 2014, earned a mere Rs.19 crore from 650 screens in Tamil Nadu.
3)We do not charge for the first three versions of the film. We charge Rs. 25,000 for a fourth version. We also offer free digital mastering of films — Tamil Nadu is the only state where this service is offered free.
4)A release using digital network for a Rs. 2.5 crore film across 60 centres would cost just Rs. 5.4 lakh per week [Rs. 325 per show x 4 (four shows per day) x 7 (seven days) x 60 (sixty screens)], roughly 1.5 per cent of the film’s budget. If the same release were facilitated using film reels, it would cost Rs. 36 lakh. (Rs. 60,000 x 60 screens).
