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S.R. Prabhu writes about Film Industry Vs Digital Service Providers Battle

PUBLISHED DATE : 21/Feb/2018

S.R. Prabhu writes about Film Industry Vs Digital Service Providers Battle

Earlier this month, MovieCrow brought to you a detailed report on the battle that is about to ensue between the Film industry producers of the South and Digital Service Providers like QUBE and its sister concern UFO Moviez. This battle which will ensure that there are no movie releases starting March 1, 2018, seems to be lacking support from film distributors, theatre owners and even a section producers themselves. Addressing this plight and detailing about what the producers' guild fight is all about, Dream Warrior Pictures' S.R. Prabhu who has successfully produced films like the National-award winning Joker, cinematic gem Aruvi and the commercially entertaining Theeran Adhigaaram Ondru writes as follows (translated from Tamil) :

[Disclaimer : The views and opinions expressed in this article are those of the author and do not necessarily reflect the policy or position of MovieCrow]

My lengthy personal feedback on movie release stoppage and VPF, for those with patience / interest :

Theatres

Right from the time theatres were operational, the basic theatre facilities included Film Projectors just like toilet, valet and other facilities. There were no confusions till films were aired using these projectors. For a movie theatre, income was generated from a specific share from the price of the ticket, theatre ads, parking and canteen.


Analog Format
When a distributor bought a film from the producer, he bought print-copies in accordance with the number of theatre screens in his distribution area. The costs were nearly Rs. 40, 000 in addition to the delivery license. The cost was taken up either by the producer or the distributor or by both with mutual understanding. Once the movie gets finalised for a theatre, print-copies would be sent. The theatre operation will then run the print-copy in the theatre-owned projector.   

Film-based costs

When this business was doing okay, to increase the rate of a film, the cost of a print-copy was raised to Rs. 50,000. Due to this, to release a film in upto 100 theatres it costed upto Rs. 50 lakh. An additional Rs. 50 lakh was costed for film rolls and negative development. Making a film turned into a business with high investment.
 
Introducing digital format

At this stage the digital projection method was introduced. Initially, the films taken by the film camera rolls were scanned and converted to digital. After the digital cameras evolved, film cost / development cost were reduced and everyone started to like the digital method. It only costed upto Rs. 25000 for a print. Products and distributors happily loved the digital era. Everything stated to become completely digital. The cost of making a film reduced, leading to a lot of producers cropping up.

Stop!

It (Digitalization) costs lesser than what was spent by producers / distributors in the past, right?
Aren't a lot of films are produced and released using digital technology?
Then why is this protest?

Read the following with patience. I'll show you the full pumpkin that has been hidden in this rice!

The ignorance of Producers, Distributors and theatre owners has been utilised by used by some companies that came forward with the pretext of providing Digital Services and in the last 10 years, despite investing around Rs. 1500 crore, 90 % theatres are devoid of their own projectors and any ad earnings. I see this as the biggest corruption in recent times in the film industry.

VPF - Visual Projection Fee

Since Digital is the future technology, in foreign countries, when international production and launch companies like Sony asked the theatres to change to digital system, it costed between Rs. 20 lakh and Rs. 60 lakh to install the server with a digital projector and its player. Because of this, the theatre owners refused to spend so much only to reduce costs for the producer and distributor. To solve this fix, a solution was obtained by Digital service companies and film industry people. That is when the Visual Projection Fee (VPF) was formed. 

The universal solution meant that the projector and server responsibility were accepted by digital service providers in exchange for Rs. 20000 per film for upto 5 years from the person who is projecting the movie, that post the recovery of the equipments + process cost, the projector will belong to the theatre and that post recovery digital service providers will only charge for the services provided. 

According to this concept, there will be no VPF post 2018 is something everyone knows. This is the reason that any theatre older than 5 years does not pay VPF for any English movie. Only service charges are charged. Even in this, Indians have been fooled as usual.

How the Indian film industry was fooled

At the time of the digital evolution, a few theatres bought their own digital projectors. When theatres showed hesitation in buying projectors, DSP companies said they themselves would give the projector for free. Moreover, when the expenditure was half of what was spent on print and the question remained as to what should the theatre owners be doing, the DSP companies asked for signatures on bond papers and said that they would be taking the revenue from theatre ads. It was also said that once the projector money was recouped, the ad revenue would be shared. Since the ad revenue did not amount to a major chunk those days, theatre owners did not see it as an issue. Despite the projector investment being recovered from VPF and Ad revenue of 10 years, the current VPF is higher than ever. 

When the question that the projector should have been owned by now was raised by Producers / distributors, a great shick was awaiting everyone. It was brought to light that theatre owners have signed in agreements that had asphyxiating clauses like  - these agreements were with respect to service and that the projectors do not belong to you, If you want you can buy your own but it should be with a notice of 6 months to 1 and a half years and in case of breach of agreement a fine of Rs. 10 lakh (The cost of an E-CINEMA projector is only Rs. 6 lakh). When a lot of these agreements had become void, theatre owners were lured with free bulbs, old/new projectors, sound systems and the like and they have signed in completely one-sided new agreements.
 
This is the reason why the producers and distributors were shamed, everytime they tried to talk about VPF and the issues related to it. When some of the theatre owners raised questions about this fraudulence, they were shut with an extra chunk of revenue from the VPF obtained from producers and distributors or theatre ads or free hitech quipments. Added to this, due to the gruge from previous losses incurred by some producers and distributors, some prominent theatre owners have maintained silence on this whole DSP topic. Apart from these, there are many theatre owners who are confused not knowing whose side to take.

The investment made producers / distributors by for a technical overhaul is turning the film industry into slaves for a technical company. For seeing a film of 2 hours, people are subject to advertisements for 20 minutes. Not only this but the producers have been pushed to an extreme level of paying for ads for their own films and only if the Digital service companies allow. The distributors association seem to be under the impression that this is an issue between producers and theatre-owners or so suggests their neutral stance. 

At a time when, the producers who have been fooled time and again cannot be fooled anymore, everyone should stand united. In a year, 70% to 80% of film producers are new, 90% of whom loose their whole investment and are ousted from the industry. To the producer who looses his whole, this VPF amounts to a hardly visible 3%. An yearly loss for producers in VPF amounts to Rs. 40 crore. A producer who struggles to even invest in another movie would not be able to look after this on his own. Therefore the responsibility of this entire protest is being shouldered by the Producers' Association. But the devil may care attitude coupled with the intention of releasing their own film with by hook or by crook, of even one producer could result in financial losses for everyone. Despite the Tamil industry functioning on a single digit percentile success for the last 20 years, it is still surviving because of the pure love for cinema. It is doubtful if the industry will survive if it only thrives on selfishness.

Let our only duty be to fight... let time answer!

 

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