Tamil film industry may take a hit due to ongoing movie-makers' strike

With the peak season for the film industry in Tamil Nadu just around the corner, various stakeholders fear that the ongoing crisis stemmed from the strike announced by film producers and exhibitors may hit the industry badly. Industry experts feel that the strike would deliver a body blow to the Rs 300 million in daily gross turnover that the industry generates from cinema halls in Tamil Nadu. 

The Tamil Nadu Film Producers' Council (TFPC) has stopped releasing new movies from March 1, as it seeks to get Digital Service Providers (DSPs) to bring down rates of the Virtual Print Fee (VPF) that they charge for the release and casting of movies on screens across the country. DSPs provide an end-to-end platform for satellite delivery of movies to exhibitors across India. The exhibitors run the movies using the digital cinema equipment provided by the DSPs. 

March 16 onwards, a section of film exhibitors in the State also announced a strike seeking abolition of local entertainment tax, which the State government had promised following the rollout of Goods and Services Tax (GST).

"If the strike continues, it will hurt the Tamil Film industry in a big way, especially since the summer season is the peak season," said L Suresh, president of the South Indian Film Chamber of Commerce (SIFCC). 

Three meetings between the producers and the DSPs over the issue have already failed, and no more meetings have been scheduled between the stakeholders, industry sources say. The protest and strike calls from the other South Indian film industries such as Telugu and Malayalam had been called off earlier after the talks.

"While the intentions of the producers' council may be good, you can't correct everything at the stroke of a pen. We have to do it one by one," said a Tamil film industry expert.

The continuing strike would only affect various stakeholders badly, experts say. The Tamil film segment has already shown a 5 per cent de-growth in net domestic collections, which declined from Rs 9.96 billion in 2016 to Rs 9.46 billion in 2017. Footfalls also dropped from 140 million in 2016 to 126 million in 2017, according to a lattest report by Ficci and EY.

SIFCC is ready to mediate on the issue if the stakeholders are ready to talk. "As a Chamber, we have told all stakeholders that we are ready to mediate to solve the problem. We are awaiting their feedback. We have appealed to them that they should come around and negotiate and finish the matter. The other three languages are screening new movies now," said Suresh.

Film producers are asking the DSPs to reduce the VPF by 25 per cent across the board. At present, the DSPs charge about Rs 22,500 per theatre and Qube Cinema, one of the largest players, has different packages including Rs 9,000 for the first week and Rs 7,500 for the second week and a lower fee for the third week under a weekly payment model. It also has a Rs 325-per-show package.

Senthil Kumar, co-founder, Qube Cinema, earlier said that the industry was ready to bring down the rate from Rs 22,500 to Rs 14,000 per film, but the demand for 25 per cent across packages would not be viable. They had offered to pare charges by up to nine per cent, which the producers weren't happy with.

"We are offering mastering, delivery to the theatres, archiving and other value-added services, which would worth another Rs 1.2-1.4 million to each movie, for free of cost. No where in the world are the services cheaper than this," he said. 

Almost all the screens in the region are now operated digitally, with the equipment provided by the DSPs to film exhibitors under various finance models, and this has helped more movies to get released, as against the cost of releasing a movie in film, which would be of Rs 60,000 instead of Rs 22,500. The number of Tamil movies released has gone up from 50 in 2005 to around 300 a year.