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The standoff between producers and digital service providers continues- Cinema express

The standoff between producers and digital service providers continues

The South film industry is now bracing for an impending strike from March 1

Published: 08th February 2018

With the South film industry bracing for an impending strike from March 1 that will stop new films from being released, a meeting that included representatives of the Malayalam, Kannada, Telugu and Tamil film industries along with the various Digital Service Providers, was held yesterday. It all began when the Telugu film industry threatened to go on a strike from March 1 in protest against the charges imposed by digital service providers like QUBE, and the Tamil Nadu Film Producer's Council followed by announcing that it will be joining in. It is known that the following conditions were stipulated by a union of those representing the various film industries:

1. Virtual Print Fee (Rs. 22,500/screen/film) for regional films will not be paid
2. Advertisements to be confined to 8 minutes
3. Two trailers to be telecast along with the film for free

The Telugu Film Chamber of Commerce President P Kiran says that should the digital service providers not agree to these conditions, theatres will be closed and that no new films will be telecast from March 1. “However, shooting will go as planned,” he says. Similarly, the Kerala Film Producers Association president G Suresh Kumar has said that the producers will be forced to join the shutdown called by the Telugu Film Chamber of Commerce if digital service providers like Qube and UFO do not slash their charges. "The major chunk of our profit goes to them. We have attended the meeting and informed them of our stance. Though we haven't yet decided to join the protests, we will be forced to do so if we don’t get a favourable response," he said.

Suresh says that he expects a consensus in a follow-up meeting scheduled on February 16. "They had originally promised us that the prices would be slashed after five years. But 12 years have passed, and the rates are so high that we are forced to pay over Rs 27 lakh for a film/month to get it released in 100 centres," he adds. A representative from QUBE, Satish, says, "We can’t take decisions on the matter yet, and hope to have a response by the time the next meeting happens. Right now, we will be having a conversation with the theatre owners on whether they will be able to bear the fee and only after that can we make the decision. Let us hope for an amicable solution come February 16."

So what if no solution is arrived at? S R Prabhu, Treasurer, Tamil Nadu Film Producers’ Council, says, “We are prepared for the eventuality. We have some aces up our sleeve and we are prepared to meet the challenge head on."

Nikilesh Surya, owner of Rohini Silver Screen in Chennai, doesn’t think that all the conditions are reasonable. He says, “While we have no problems showing trailers, I don’t think they have any right to ask us to limit advertisement run-time to 8 mins. Also, we won't be able to bear the VPF and it has to be borne by the distributors only. Perhaps we can all eventually arrive at an amount we are all happy with."

Meanwhile, the President of the Karnataka Film Chamber of Commerce, Sa Ra Govindu, had informed us before yesterday’s meeting that the Kannada film industry will show solidarity too by joining the strike on March 1, but that films will be allowed to release from March 2 in Karnataka.

"There is a long time between now and March 1. Things change even in a day; so, lets see," says S R Prabhu.

(with inputs from Meera Suresh, A Sharadhaa & Murali Krishna CH)


On May 10, 2015, the Tamil film industry held a day-long fast in Chennai to condemn the prices imposed by digital service providers, QUBE and UFO. Three years since, the issue has still not been resolved, and has ballooned now into a much bigger problem. At the heart of the issue is the Virtual Print Fee (Rs. 22,500/screen/film) that digital service providers charge the producers for screening the films. Senthilkumar, founder of QUBE, believes the fee to be justified. "Given that many producers couldn't pay it in one shot, we even came up with weekly (9000 for 1st week and 7500 for 2nd week) and daily (325 plus tax for a minimum of 7 shows) slabs. The Southern rates are the lowest rates in the whole world actually. In the Western market, it is 850$ for a full run and there are no differential rates like what we have introduced here," says Senthilkumar, founder of QUBE. He adds that more charges would, in fact, have been justified, but that they have desisted. “In Bombay, the mastering costs Rs. 2 lakh and in the US, it is Rs. 3 lakh. Even some reputed projection theatres like Prasad Labs charge anywhere between 18k to 20k; if it were to be delivered in the form of a hard drive, it would costs Rs. 2,500. We haven't charged a single paisa till now."

SR Prabhu, Treasurer, Tamil Nadu Film Producer's Council, is miffed because he believes this to be a case of unkept promises."When they first came in, they promised to bear the costs of the projectors they will be installing in the theatres, and that only for the first five years, we would be paying VPF. It has been 13 years and the fee is still prevalent and their excuse is that they are constantly upgrading technology. Now it is 2k; tomorrow, it will be 4k, and then 6k, and we will still be paying the VPF."

Senthilkumar says that to stay relevant, one needs to evolve, and points out that maintenance of the projector cameras are a huge part of the recurring cost. "There are two projectors, VCinema (10-15 lakhs) and DCI (20-30kakhs), which have only a lifetime of 5 years and 10 years respectively. We have to ensure that the services provided by us stay top notch and the nominal VPF helps with the cost of the projector and its maintenance. Even multiplexes are charging the same fee. Why don’t they have a problem with that?"

SR Prabhu disagrees. "We don't want VPF in any theatre. Every theatre is VPF-free worldwide. Why are we still stuck with archaic practices? Theatre owners and DSPs would easily earn close to 6 lakh per year from the VPF and the associated advertising revenue. In three years, they can recover the cost. In the 10+ years they have been operational, a simple calculation shows that they have earned at least 1,000 crores as a company with this money."

Senthilkumar says that QUBE’s arrival has resulted in an increase in the number of films per year, but SR Prabhu rubbishes it saying that the arrival of digital equipment resulted in the revolution; not the presence of digital projection.

It is believed that the proposed ban on releases will not affect English films. SR Prabhu comments, “The DSPs are clever in how they add the maintenance cost to the VPF, and the poor producers think that it is only the projection fee they are footing. We may all have been paying for the screening of English films too, if you think about it.” Senthil refutes this by simply saying: “Distributors of English films pay the fee too.”

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