Tamil film industry in crisis due to strike
Chennai: The escalation of a strike that began on 1 March is now threatening to pose a financial crisis for the film industry in Tamil Nadu.
The Tamil Nadu Film Producers Council (TFPC) and Digital Service Providers (DSP) are at loggerheads over pricing of the Virtual Print Fee (VPF). No new movies have been released since the beginning of this month. While Kannada and Malayalam film industries observed a one-day token strike, the Telugu film industry withdrew its strike last week.
DSPs supply equipment to project films in theatres, using satellites and they levy a charge (VPF) for this service, which is borne by producers and theatre owners.
In addition to the ongoing protest by the TFPC, the Tamil Nadu Film Exhibitors Association (TNFEA) which has been urging the state government to remove the 8% Local Body Entertainment Tax which is levied along with the goods and services tax (GST) since last year, has also decided to shut down theatres from Friday.
However, multiplexes and theatres in Chennai will function as usual. As there are no new releases due to the strike, theatres have been running only old films and other language movies from 1 March.
In July last year, after the state government intervened and agreed to discuss the issue, over the local body tax the protests by the film industry were called off and ticket prices were raised.
Tamil Nadu charges 8% local body tax from theatre owners in addition to GST.
Meanwhile, the strike by the TFPC has been to protest against the monopoly of DSPs like the UFO Moviez and QUBE Cinemas Technologies that allegedly levy exorbitant VPF.
When the theatres moved to digital from analog, “producers/distributers paid VPF thinking that after certain period, the projectors will be handed over to theatres. But now DSPs say, they own the equipment,” producer S.R. Prabhu had earlier stated.
As per an earlier agreement between the producers and DSPs there would be no VPF from 2018, when the equipment costs would be fully recovered. The installed projectors would be owned by the theatres and DSPs would only claim the service charges. But service providers have now increased the price that is charged from the producers owing to the difference in screen formats across theatres in South India.
Since last month, in a series of meetings, producers have demanded exemption from VPF, a share in advertisement revenue and a fixed eight-minute time limit to screen commercial advertisements in theatres.
Recently, a Times of India article stated that the Tamil tinsel town would have faced a loss of around Rs40 crore due to the strike.
For the Tamil film industry that has been affected since the latter half of 2016, the present shut down would mean a loss of around Rs.6 crore per day, according to some of the Tamil film trade analysts
According to a KPMG India – FICCI media and entertainment (M&E) report, “Various factors which affected the box office collections (in Tamil) were demonetization, demise of former chief minister J. Jayalalithaa and cyclone Vardah.”