Will Bharathiraaja and his Boys bring relief to producers ?

 

The OTT effect has hit Tamil Nadu Theaters in a new way. They are now hit by an old issue that remained unsolved. The newly formed Producers body headed by Bharathiraaja has taken up  the issue of paying Visual Print Fee (VPF) by producers to service providers Qube and UFO MovieZ to screen films in theaters. They have asked for a share in the booking fee collected by online portals for tickets and from the advertisements that come with the digital prints. Coming on the heels of the news that Centre will allow theaters to open from October 1^st, Tamil Nadu theaters are in for a long fight. As OTT  emerged as an alternative, theaters are in a tight corner.

Service providers say that the fees charged is lowest in the World. The producers in Tamil Nadu say that the service providers have recovered their investments on eqipments over a span of ten years and continuing VPF makes no sense. Hollywood Studios movies that are not made in India do not pay any VPF and those that it produces in India are only paying this fee. The service providers have not drawn any agreement with theaters about spending on upgrading equipments in India. In Hollywood the studios paid for upgrading and so the equipment cost was paid up in 5 years. Hollywood also paid a small percentage for new systems in place.

Digital service providers say that it has to pay 30% import duty for equipments. It means more time to recover investment. As for South India,, it had reduced 18-20% fees after last strike. The cost of mastering, including last minute jobs, the cost of delivery and the cost of key management are all charged separately   elsewhere globally but not in India and this charges alone if borne by the producer would equal the VPF is the argument. After the South Filmdom strike, Qube agreed to reduce by 50% the fees for a 6 mth time and reverted back to 18-20% drop. Digital providers also agreed to follow the E Cinema pattern of charging per show.

In Hollywood, Cinedigm and DCIP VPF contracts are between studios that have a line of releases and AMC, Regal and Cinemark, the three largest exhibitors in the US. In India, there is no contract with the multiplex chains and there is not many studios that has a steady supply of movies. It is mostly one time producers and no deal can be arrived at. Only Scrabble Entertainment and Qube Cinema signed VPF contracts with the Hollywood Studios.

Theaters say that it is a matter between the Qube -UFO MovieZ  and producers .and they have no role to play. It means that the producers will have to sort it out with them. Now what remains is that the sharing of advt revenue and online ticket booking charges. If Qube / UFO refuses to scrap VPF  charges or reduce it, producers will have to move to PXD from the Prasad Group, KSS, TSR ProVA, One Source Media, Aerox and K Cinemas which are some of the other digital cinema integrators currently operating in India. However, only Scrabble Entertainment and Qube Cinema signed VPF contracts with the Hollywood Studios.

The new producers body is to ask Qube and UFO to sign a deal with them and treat them as they treat a Hollywood studio. Their members will keep a steady supply of movies. The VPF should be scrapped. If not the theaters should pick the bill. Multiplexes might not agree to join and if it means a further lockdown. The last strike was withdrawn after some exhibitors filed a complaint against the striking producers with the Competition Commission of India (CCI). After a preliminary examination, the CCI decided that the complaint indeed had merits and called for a full examination of the matter. This is an ongoing matter. Though the move is expected to bring relief to producers, small theaters might have to close down or sell out to multiplexes. The VPF has been a poll plank for groups contesting the Film Producer Council polls but nothing has come out of it. The new body is only joining of active producers and they will not issue any directive. Even if issues, CCI can at best say it does not hold good and it is for Tamil Film Producers Council, the officially body that has to take a call. The official body is at present filled with majority of those who are in sleep mode.

CCI has a complaint by Ronnie Screwala against multiplex chains that he says are colluding with Qube and UFO in VPF issue. He has Disney/Fox Star, Viacom 18, Jio Studios, T-Series, Zee Studios and , distributor Anil Thadani, producer Siddharth Roy Kapur (President of the Producers Guild Of India) and producer Mukesh Bhatt  joining his existing complaint with CCI. Ronnie has also found support from the Producers Guild of India & Indian Motion Pictures Producers Association.