Published On: Wed, May 2nd, 2018

A dramatic end to the cinema strike: Tamil film industry now has to learn to cope up with modern tech

Image result for A dramatic end to the cinema strike: Tamil film industry now has to learn to cope up with modern techTheatres are happy that the strike has been called off without them having to share VPF charges, canteen sales or advertising revenue.

It has been a period of discontent in Tamil Nadu. There have been a series of bandhs, strikes and protests for various causes. Something or the other erupts every other day. Never-ending strikes to shut down the Sterlite copper smelter, the Neutrino project, GAIL natural gas pipeline and high-decibel activities to set up the Cauvery Board, which led to the shifting of IPL matches, are some of the high-profile ones. From March 1 onwards, just before the start of the holiday season, the Tamil film industry went on a strike. It dragged on for 48 days, and finally came to an end a few days ago. The industry missed the Tamil New Year releases for the first time in its history.

The trigger was the stand-off between digital cinema service providers (DSPs) and the South Indian film producers over Virtual Print Fee (VPF). DSPs were charging Rs 15,000 as VPF per screen per movie. The fee includes conversion to digital package, licensing, delivery and editing the movie into different versions. Qube, the largest DSP and market leader, claimed that Rs 6-8 lakh per movie was being charged overseas, but in India producers pay only a fraction of that amount. The four South Indian industries—Tamil, Telugu, Kannada and Malayalam—went in for a shutdown in March in protest against DSPs and their monopolistic ways. Barring Tamil, other languages resumed work within a brief period of time.

DSPs and theatres share advertisement revenue from the screens, which is quite lucrative. This amount is not shared with producers, who wanted the VPF amount of Rs 22,500 to be more than halved. They wanted on-screen advertising be confined to eight minutes and for two film trailers to screened along with the main film. Producers turned rebellious ever since DSPs further increased their price for theatres migrating from 1K to 2K projection recently. The Tamil Film Producers Council (TFPC) chief Vishal had said in an interview, “It is almost 12 years since theatre projection moved from print to digital. DSPs had, at that time, said prices would drop once everybody switches to digital.

Today, it is almost 100% digital, and companies are yet to reduce their rates. They’re functioning like cartels.” DSPs say digital projectors cost Rs 30-40 lakh and come with a huge maintenance expenditure that many exhibitors cannot afford. So, DSPs install the projectors and get their revenues from in-house advertising and VPF from producers. The TFPC wanted to shut down new Tamil film screening for a few weeks during the lean period. Vishal says this was not a strike, but a revamp and a correction to rectify the industry. March is considered the examination season across the South and was seen as the ideal time to fight DSPs. Theatre organisations did not fall in line; they had English and other content to feed their screens.

The TFPC, together with distributors, has been fighting for computerised ticketing, no VPF charges, flexible ticketing and reduction in online booking charges, among other things. Theatres in B&C centres—a classification within the Tamil film industry—are notorious for not declaring total ticket sales and playing around with rates. They have been resistant to computerisation and e-ticket sales. Tamil film industry is not known for transparency.

On an average, there has been a loss of Rs 5-8 crore for the Tamil film industry every day, and thousands of daily wagers were rendered jobless. Only 146 screens in Chennai city and suburbs, and two multiplexes in Coimbatore, screened films, that too mostly in other languages and with limited show times. Nearly 950 screens outside of Chennai have temporarily closed down as they are demanding that the government scraps the local body entertainment tax. They also do not have content as more than 80% of screens in Tamil Nadu survive on Tamil films.

The TFPC has managed to bring in three new DSPs who are willing to provide equipment and operational cost at 50% of the current operators’ charges. The powerful theatres in Tamil Nadu are opposed to the idea of sharing revenue from ancillary sources (parking, food and beverages) and switching to TFPC projectors. They say their operational costs have shot up and they depend upon incomes from concessions and online booking fee for survival.

Tirupur Subramaniam, who operates the largest number of screens in Tamil Nadu, said in an interview, “To bring down their costs, shouldn’t producers start by first reducing the unreasonable salaries they pay stars and star directors? And as far as switching to TFPC-recognised operators is concerned, my question is: Will you allow somebody else to decide what brand of fan or electrical fittings you choose for your home or office?”

Vishal has insisted on a sunset clause; it means DSPs should stop charging VPF for e-cinemas over one year. E-cinemas use electronic projection equipment considered of a lower quality than DCI-approved digital cinema, or D-cinema. But trends are shifting. (DCI is short for Digital Cinema Initiatives, a JV of major motion picture studios, formed to establish a standard architecture for digital cinema systems.)

With so much intransigency on all sides, the Tamil Nadu government had to mediate to bring the strike to an end. According to Vishal, most of the producers’ demands have been agreed to, including computerised ticketing and box office transparency, flexible ticket pricing, and significant reduction in online booking charges. He said the TFPC would start its own portal for online booking. Breakthroughs include reduction of DSP charges for e-cinema, from over Rs 10,000 to Rs 5,000, while the one-time VPF charged for a film’s lifetime run will come down to Rs 10,000. “In six months, we have been asked by the government to come up with a permanent solution for VPF.”

There have been compromises. Theatres are happy that the strike has been called off without them having to share VPF charges, canteen sales or advertising revenue. What the strike achieved will become clear in how things pan out in the next six months. It is also necessary to mention that there was no major outcry from the general public demanding new releases. The Tamil industry has to learn to cope up with fast-changing technologies.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

[“Source-financialexpress”]