After waiting for almost seven months, cinema hall owners in the State are eager to get back to business. They are waiting for the State government to give a go ahead, but film producers insist that it cannot be “business as usual” until the theatre owners agree to their many demands.
Members of the Tamil Film Active Producers’ Association (TFAPA) have placed three main demands, among others: abolish the virtual print fee (VPF); renegotiate theatrical revenue-sharing formula and provide a share in the revenue made via online ticketing.
VPF is a charge paid by the producer to digital service providers to screen movies in theatres.
Despite digital cinema service providers Qube Cinema and UFO Moviez announcing a flat 50% discount on VPF charges for a fixed number of weeks, TFAPA vice-president and producer G. Dhananjayan said its members were determined to abolish VPF.
“We have already placed the demands and theatre owners are yet to reply. We are unlikely to release new films until the issue is resolved,” he said.
Mr. Dhananjayan ruled out a situation where producers start releasing movies in theatres, while simultaneously engaging in talks with theatre owners over the key demands.
Favourable decision
Tiruppur Subramaniam, president, Tamil Nadu Theatre and Multiplex Owners’ Association, said he hoped to see producers coming forward to release new movies once the government orders the reopening of theatres. “We will have to meet the Chief Minister and place a request. We hope to get a favourable decision soon,” he said.
On the demands made by producers, Mr. Subramanian said he did not believe that they had renewed their demands on VPF and other issues. “I fully expect the producers to release new movies,” he said.
In a letter to TFAPA, Senthil Kumar, co-founder, Qube Cinema, urged the association to “address the issue in a wholesome manner so that we are not exclusively targeted by such a powerful and important body as yourselves”.
Addressing the charge by producers that they were being forced to pay VPF charges while Hollywood was exempted, Mr. Senthil said the VPF model followed in the United States, Europe and Australia was different from the one in India.
“Digital service providers there [in the U.S., Europe and Australia] charge a very high VPF of about $850 per digital print, about 90%-100% the cost of a film print [about ₹60,000-₹70,000]. The agreement entered into by the digital service providers with studios allow them to charge such high VPF rates, until they recover the cost of the digital cinema equipment, along with maintenance and support costs, and a reasonable return on investment. This is referred to as the recoupment model,” he said.
Explaining why the ‘recoupment model’ will not work in India, he said: “The rate charged per digital print is so low when compared to other international markets. The cost of equipment is even higher here because of the 35% import duties in the country, not just for the equipment, but also for all spares and consumables,” he said.
