No new South Indian films will hit screens from March 1, as the five States protest against digital service providers and their monopolistic ways

The four South Indian film industries — Tamil, Telugu, Kannada and Malayalam — are almost certainly going in for a shutdown from March 1, in protest against Digital Services Providers (DSPs) and their monopolistic ways.

This will be the third time in less than a year that we will witness the Tamil film industry shutting down.

DSPs, who deliver content straight to theatres via satellite for digital projection, are in the eye of the storm, as all four industries are demanding that these companies lower the rate at which they provide their service. The official announcements will be made once the final meeting between south Indian producers and the DSPs takes place in Bengaluru this Friday (February 23).

The producers believe that DSPs such as Qube and UFO are charging too much for the Virtual Print Fee (VPF). For a regional film, the DSP charges around ₹22,500 per screen to the producer. This includes the cost of hiring and delivery of content via digital distribution in theatres.

Producers’ demands

The DSPs and theatres make their money by sharing advertisement revenue from the screens, but that amount is not shared with the producers. But now, producers want the VPF amount of ₹22,500 to be more than halved. Their other demands include that on-screen advertising be confined to eight minutes and for two film trailers to be screened along with the main film.

Producers argue that Hollywood studios are getting their films screened at roughly ₹10,000 per film for its entire lifetime, while regional films are being forced to cough up larger amounts.

Producer G Dhananjayan says, “The strike is imminent if DSPs are not willing to reduce their existing prices. I feel the strike is necessary for the long-term benefit of producers who are the pivot around which the industry revolves. My film Mr Chandramouli, which was originally slated for April 27, got postponed after Kaala announced its release date. Now I will be able to zero in on a new release date only after the proposed strike is over.”

No mood to give up

The producers are in no mood to relent, ever since DSPs further increased their price for theatres migrating from 1K to 2K projection recently. TFPC chief Vishal, in an earlier interview, said: “It is almost 12 years since theatre projection moved from print to digital. The DSPs had, at that time, said that 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. For a film, we end up paying almost ₹27 lakh per month for 100 centres. We want a level playing field with minimal charges.”

The producers in all the five southern states are united under the leadership of Suresh Babu of Suresh Productions, one of the leading production houses in India.

A spokesman of the South Indian Chamber of Commerce said: “The Joint Action Committee of the Southern Indian Film Industry and Digital Service Providers have decided to meet again on February 23 and try to resolve the issue. There is no change in the decision of stopping the screening of films in all theatres of South India from March 1, 2018 and stands as it is, until further notice.”

They believe that shutting down for a few weeks during the lean period (March is considered the examination season across the South) is the ideal time to fight the DSPs.

Senthil Kumar, co-founder of Qube Cinema, offers a contrasting view. “Our VPF rates are the lowest in the world and the most flexible. Apart from the flat rate of ₹22,000, we have multiple options as low as ₹325/show. Like mobile phone plans, producers and distributors choose what’s best for each of their release theatres, thus bringing their effective cost down to just half the flat rate. What’s more, we offer digital cinema mastering services, content delivery, digital rights management and long-term archival... all for free. These are all considerable costs in the rest of the world. Finally, the digital cinema release costs here are between 0.3% to 1.7% of a movie’s total costs, so to suggest that these are draining the industry’s profits is preposterous.”

A no-show for theatres

Meanwhile, powerful theatre organisations have refused to tow the line and will keep away from the strike. A spokesperson for the Exhibitors Association says, “None of the theatres will be closed; we have enough English and older content lined up to feed our screens. It is for the first time that producers are fighting a private company and I feel there is a hidden agenda at play. They want to shut down the existing DSPs and start their own companies. How long will they stop new releases? Vishal himself has announced the release of his Irumbu Thirai on March 29.”

The proposed strike will slow down production and alter release date schedules. In the first two months of 2018, 33 Tamil films have released (up to February 23). Another 50 are in the pipeline in the next three months. Footfalls across theatres have been going down and shows during weekdays are getting cancelled due to lack of audiences. With streaming services disrupting how films are being consumed, there are going to be stormy days ahead.