In a worrying phase, the Tamil film industry is moving towards a standstill. A complete shutdown has been announced by the Producers Council whereas the theatres have announced a different strike. What is the fight and why is the producer council refusing to back down? From the four industries why has the fight trickled down to the Tamil industry? What significance does the theatre owners’ strike have? In conversation with the producer, distributor, national award-winning writer and author of The Art and Business of Cinema (ABC), G Dhananjayan breaks down the different narratives of the story.
What are the main demands of the producer council? What is the core issue?
There are three stakeholders – the producers, the theatre owners and the Digital Service Providers. Theatres are already getting a revenue share from the producer. Now, there is a third party (Digital Service Provider) who is entering the scene and asking the producers to pay them. The producers are already paying the theatre owners 50 percent revenue share. Since the equipment is part of the theatre infrastructure, producers are questioning why they are asked to pay over and above the same? For example, if we are hiring a place, it comes with the equipment. Why do we have to pay separately?
At the start, it was communicated that the VPF will be charged for only 5-6 years. But now it has become a permanent fixture. So now the producers are saying that even if you are charging, it should be to the theatre owners.
Secondly, the theatre owners are passing the burden of online ticketing to the consumer. Earlier the ticket price ceiling was Rs 120 and there was no online ticketing back then. Now, the price has been increased to Rs 160 with GST. Additionally, they charge an online ticketing charge. The price is reducing footfalls and that again ultimately affects the producer.
These are the two major concerns that the producers have.
Why is the protest happening now?
In 2012, the total percentage of digital screens were 50 percent. Producers were paying Rs 50,000 for traditional prints back then. So when we were introduced to digital copies where cost was Rs 15,000 for its lifetime run, several people started accepting it. But now, it has become Rs 15,000 for a week. It is important to consider that print copies are an asset to the producer. Once the run is complete, it is returned to the producer. Digital copies are theatre-specific. Say if a film runs for 3 weeks, the cost is equal to a print copy but we have no ownership over the copy.
Also with print copies, the machine used to be owned by the theatres. We used to pay to screen our content. Now, we are being asked to pay for the machine as well. Qube is a machine, right?
What is the reason behind the price hike? Is it an effect of monopoly or normal inflation?
Since all theatres turned digital in 2016, it has become a monopoly. Charges which were nominal before were hiked. Over that, 2K projectors (D cinema) were introduced and charges were pegged at Rs 14,000 per week for those. With print, we used to enjoy economies of scale — a higher number of copies leads to a reduction in cost. Here more copies cost us more. The dominance is worrying the industry — a third party is coming and controlling everything.
Digital Service Providers’ lowest price (Rs 325 per screen) is for E cinema which uses 1k projectors. 60 percent of the screens today have D Cinema . For D cinema, producers have to shell out Rs 500 per show which makes it 14,000 per week. They have to be clear to mention all the rates and the most relevant ones. The original Rs 22,500 figure which was quoted was for E cinema while D cinema actually costs us Rs 27,000.
Vishal and several other people have said that the rates charged for Hollywood films are lower compared to our films. Why is there a difference in the cost?
When these digital companies went abroad, they signed an agreement according to the rules Motion Picture Association of America. In compliance, there is a just a one time charge that you pay per theatre and not a weekly fee. According to our information, that charge is around Rs 10,000. That’s it. When we ask them to disclose the figures during our negotiations, they refuse to do so. If you can run a film on a single time charge for Hollywood, why not for us? In what way are Hollywood films different from our cinema? The run-time is almost the same predominantly. There is no difference in quality.
Digital Service Providers have said they provide allied services at no additional cost.
When you give content to an audio company to duplicate, they obviously have to master it. The idea to prune the content to their technology – they aren’t mastering the product and giving it to us. They can’t claim that as an additional service. It is part of their deliverable.
The theatre owners have announced a different strike against the government. Considering that the LBET (Local Body Entertainment Tax) is an issue that is few month old, the timing of the strike arises questions.
It is predominantly an attempt to divert the attention from the core issue, the VPF charges. This is why the production council has decided to stop production. When production continues and there are more films ready, the pressure on the producers is high to get them out. When the pipeline runs empty, they would have to look at the core issue. The only way for a solution is for the theatres and the producers come together to sort out the issue with VPF. This is an industry issue.