VPF is a fee that service providers, who supply equipment to project films in theatres using satellites, levy on film producers and theatre owners.
According to South Indian Film Producers Council chairman D Suresh, the decision was taken after several rounds of talks between producers and the service providers failed.
"The strike call was given by the film industry to protest against the exorbitant VPF levied by service providers. The international norm is that eventually the VPF should become zero. Here, on the contrary, it is being increased which is not acceptable," he told PTI.
"Theatres in Tamil Nadu were partially closed today as well as 750 in Kerala. Exhibitors from Karnataka have said that they will close their theatres from March 9 if the issue is not resolved," he said.
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Suresh added that they planned to resolve the deadlock in the next "two to three days".
A joint action committee of distributors and producers from the five southern states had been formed, he said.
He said that service providers like UFO Moviez and QUBE Cinema Technologies control about 90 per cent of the market.