Why is the Tamil and Telugu film industry going on a strike on March 1? Here’re all the details

The Tamil and Telugu film industry is set to go on strike from March 1, and the producers headed by Suresh Babu have decided that they will not be releasing any new films till the Virtual Print Fee is brought down.

An industry wide strike looms large ahead of Tamil and Telugu film industry as talks between a delegation of the south Indian filmmakers, led by producer Suresh Babu of Suresh Productions, and the Digital Service Providers (DSP) such as Qube and UFO held on Friday in Bengaluru failed. The meeting was held to bring the Virtual Print Fee (VPF) levied by the service providers down. Initially, the south Indian film industry had planned to organise a strike, however, it now looks like the Kannada and Malayalam film industry want to resolve this issue amicably. Hence, March 2 will see new Kannada and Malayalam releases. The Tamil film industry reconfirmed the shutdown on Wednesday and there will not be any new Telugu releases on March 2.

The Tamil and Telugu film industries will be going on a strike from March 1.

So, what role do DSPs play in your movie watching experience and why you, as audience, should be concerned.

Digital service providers came into play when the projection of films shifted from analog to digital. They signed up a contract with the theatres, which allowed them to install equipment to project films using satellites and levy charge for this service directly from the producers. The cost of the equipment was to be jointly borne by the producers and theatre owners -- in form of ad revenue. The understanding was that the rate charged would be high the first five years and would be lowered after that. However, 12 years after the contract was signed, the prices are yet to be decreased.

The actual problem

The service providers have increased the price citing different screen formats. In south India, there are a total of 4000 screens out of which 40% screens are 1k (E cinema) and 60% are 2k (D Cinema), explains producer Dhananjayan Govind.

Senthil Kumar, co-founder of Qube, which is one of the popular DSPs had stated in an interview to WHO IS HE Sreedhar Pillai that at Rs 325 for a show, they charge the lowest rates in the world. “Apart from the flat rate of Rs 22,000, we have multiple options as low as Rs 325 per show. Like mobile phone plans, producers and distributors choose what’s best for each of their release in theatres, thus bringing their effective cost down to just half the flat rate,” he had said.

The difference between E cinema and D Cinema

Producer Dhananjayan is not satisfied with Kumar’s explanation. He said, “The DSPs are stating that they charge only Rs 325, but in actuality this price is valid only for E cinema and not D Cinema. For this, they charge Rs 500. If I were to release a film for seven days and request four shows a day, that is Rs 14,500 in one screen. This is expected to be paid in advance. The release of the film will be held if this payment is not made on Thursday night.” He also added how this doesn’t make a difference to the theatre that screens the film or the audience who watch. “Whether it is 1k or 2k, the tickets price brackets remain the same for the audience and this doesn’t make a difference to the theater owners either. It is only the producers who have to cough up more money,” he added.

Producer SR Prabhu, the man who bankrolled the critically acclaimed film Aruvi, claimed that he had to pay Rs 50 lakh for his film to be screened that was made on a budget of Rs 2 crore. “It is technically supposed to cost me Rs 10 to 15 lakhs, but I paid Rs 35 lakh extra to get my film screened.” He had also tweeted how Dream Warrior Pictures had paid Rs 2.2 crore as VPF in 2017. “Out of Rs 2.2 crore VPF we paid for 4 films in 2017, someone ate (meaning pocketed) around Rs 1.5 crore. We could have made one more film with that saving!”

Disparity in charges for Hollywood films vs regional films

It has also emerged that DSPs charge a one-time fee for Hollywood films, which amounts to Rs 10,000 for its lifetime run as compared to Rs 50 lakh for a regional film such as Aruvi. “This disparity in charges for regional films vs Hollywood films is not acceptable. The producers are all united and we turned down the offer that was made to us today, especially in the face of this,” SR Prabhu explained.

The ownership of equipment installed in theaters

While, the VPF in itself is an issue, there is a secondary problem here as well. Technically by now, the ownership should either lie in the hands of the producers or the theatres, but now it has emerged that the DSPs will own the equipment whose cost has already been borne by the producers and theatre owners.

In the past 12 years, producers have paid the DSPs for releasing their films while theatres have lost revenue from advertisements. The strike is to bring an end to the monopolizing of DSPs when it comes to screening films in south India.

How will the strike help the producers

According to Dhananjayan, the producers will not be facing too much trouble by postponing their releases as VPF getting removed will more than balance out their losses. “If what cost Rs 50 lakh now becomes Rs 25 lakh or less, why would the producers mind waiting four weeks? It is the theatres that will face a huge loss as audiences don’t show up due to no new releases. DSPs earn in crores on a daily basis and if new film does not release, they are not going to receive payments and this will hit them hard,” he explained.

The side of DSPs

While the producers are hell bent on bringing about a change in DSPs monopolizing the movie screening experience, founders of DSPs feel they have done enough by offering a fair reduction in price by bringing it down from Rs 22,500 to Rs 14,000 at the Bengaluru meeting. Producers refused the offer.

Jayendra, co founder of Qube, tweeted in reply to SR Prabhu’s allegations and wrote, “Sir here are the facts from our books: Aruvi - QUBE India relase :Total VPF paid for QUBE is 2424725/ ( GST) . Total number of unique screens: 230 . simple division will give the cost per screen !” There are also speculations that industry’s bigwigs are keen on beginning their own DSPs and are hence trying to shut down the ones that are currently functioning.

The side of theaters:

In Telangana and Andhra Pradesh, it looks like theaters will be a part of the strike to be conducted from March 1. However, trade analyst Sreedhar Pillai confirmed that the theaters in Tamil Nadu will run the older releases. “Telugu states are currently the strongest as the theaters are also expected to shut down,” he said.

Author tweets @Priyanka_S_MCC
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