On Wednesday, February 28 the Tamil Film Producers Council said that starting from Thursday, March 1, it would participate in an indefinite strike protesting against the Virtual Print Fee charged by digital distribution companies, such as Qube Cinemas Technologies or UFO Moviez. Qube Cinemas Technologies controls around 1,800 screens in south India.
Hence, there won’t be any new releases from any south Indian industry until an agreement is reached between the companies and the TFPC. However, English and Hindi movies will continue to be released as per schedule.
Producers and distributors have to pay the VPF so that companies such as Qube can purchase and install digital cinema projection equipment in movie theatres during release. Speaking about the strike, TFPC treasurer S.R. Prabhu told The Hindu, “The companies are offering a consolation reduction in charges. We want the VPF to go. We have paid it for 10 years and can’t do so anymore.”
“Going forward, we will find theatres and service providers who will not demand VPF. We are paying seven times the handling charges as VPF. It is unfair. Theatres cannot outsource the upgradation of their equipment to producers,” he added.
Producers and distributors usually prefer to avoid releasing big banner films in March due to school examinations. As a result, space opens up for smaller budget movies. However, now they will have to wait for a release owing to the strike.
However, Senthil Kumar, co-founder of Qube Cinemas Technologies Pvt Ltd, said it was unfair for producers to demand an end to VPF charges without considering existing contracts and agreements with theatres. “In Hollywood, producers or studios have been paying $850 as VPF, which is slightly less than the $1,100 that they pay for a film print. If Indian producers had also paid the same amount for 10 years, it would have been possible to recoup the investment costs,” Mr. Kumar was quoted by The Hindu.
“It is not right for them to cherry-pick things from the U.S. model to choose their narrative. We have been offering services for 1/3rd the price. If they choose a date sometime in future, we can work with that. But this is untenable for us as a company,” he added.
The issue has been brewing for quite some time now. “What have we done wrong for the film industry? We invested a huge amount of money with a huge risk. If the theatres buy their own equipment, like Sathyam Cinemas [now S2 Cinemas], Inox or PVR Cinemas do, there is no need to pay us a fee. There are operational and maintenance costs. The spares too cost money. Somebody has to pay for the equipment for digital distribution, which has brought down per-print costs considerably,” Senthil Kumar was quoted as saying by The Hindu.
Reportedly, the producers have claimed that the implementation of GST (Goods and Service Tax) is affecting the collections. However, industry veterans said that it was almost impossible for producers to change the system overnight. Producer G. Dhananjayan said, “Compromise is not the solution. Producers cannot be asked to subsidise equipment in theatres anymore. It doesn’t make sense. The Tamil film industry should work with other south Indian film industries.”
Distributor and theatre owners hope that the issue would be sorted out in a couple of weeks.