Early this month, Mollywood was hit by a sudden shock when multiplex giant PVR-INOX pulled out Malayalam films from screens across the country. Though a temporary truce has been reached, the issue may crop up again. TNIE Explainer looks at the stand-off in detail.
What is the issue?
A dispute over the virtual print fee (VPF) between the leading cinema chain PVR-INOX and the Kerala Film Producers Association over the high VPF hit the headlines when PVR suddenly decided to stop the screening of Malayalam films across the country on Vishu.
The abrupt move from PVR not to screen Malayalam films came when Prithviraj-starring 'Aadujeevitham' and survival thriller 'Manjummel Boys' were successfully running in theatres and Fahad Fazil's 'Aavesham', Unni Mukundan-starring 'Jai Ganesh', and Pranav-Dhyan combo's 'Varshangalkku Shesham' were set for release. Sure enough, the Malayalam film industry's revenue was badly hit by the decision.
Was there anything further?
Yes. This development was followed by the demand to screen Malayalam films at the newly launched nine screens of PVR at Forum Mall Kochi through the content provider Producer's Digital Cinema (PDC), launched by the Film Producers' Association.
What is PDC?
PDC is a content mastering unit launched as an alternative to content providers like Qube, UFO, PXD, and TSR. PDC is an affordable option for the producers and the distributors as the fee to screen a film is only Rs 5,000 to Rs 6,000.
What was PVR's response?
PVR CEO Kamal Gianchandani came up with a post on X (previously Twitter) explaining the move. "Our newly inaugurated 9-screen cinema, PVR Forum Kochi has been advised by the association to source Malayalam movie content exclusively through one channel, that is through the content mastering and distribution network run by the Association. Such an action of forcing an exhibitor to procure content from only one source is anti-competitive in nature and prohibited under the law. As a law-abiding member of the Indian Film Industry, we are unable to comply with this advice," he said in the post.
What is the virtual print fee?
Virtual print fee is a subsidy that producers/distributors pay to enable exhibitors to cover the cost of converting their analog projectors into digital ones. The producers in Kerala mostly pay around Rs 20,000 to Rs 25,000 per week during the initial days of release to screen their movies, and the amount gradually decreases. There have been allegations that the VPF charged by the theatres are high.
What does the Competition Commission say on the issue?
Competition Commission of India (CCI) in a market study on the film distribution chain in India in 2022 has found that VPF may lead to several anti-competitive outcomes, namely, limiting the supply of movies, instances of refusals to deals, and creating barriers to entry. "Moreover, it is unreasonable to expect producers to bear the cost of equipment for cinemas in perpetuity, in addition to paying for all promotion and production costs for a movie. Additionally, it is unclear to what extent VPF gives smaller theatres a lifeline, as most of the VPF collected in relation to such theatres is taken by the DCE provider," the study said.
Is this a new issue?
No. In the South Indian film industry, VPF has been a discussion point since 2018. The Telugu Film Chamber of Commerce protested against the VPF charged by Digital Service Providers (DSPs) by shutting down theatres in Andhra and Telangana in March 2018. Later, the Tamil Film Producer's Council also announced a protest that lasted more than 40 days, and there were no new releases in Tamil Nadu in March 2020, just after the reopening of theatres after lockdown. The dispute was resolved after several discussions when the content providers agreed to offer a discount of 18 to 23 per cent on VPF.
Has the issue been solved?
In Kerala, the dispute was temporarily solved after MA Yusuff Ali, the managing director of Lulu Mall, intervened. Lulu Mall in Kochi has 5 PVR screens. The PVR started screening Malayalam films again after two days of the dispute. The screening was stopped on April 11 and after reconciliation, it was resumed on April 14.
What could be the final solution?
The CCI study has said that VPF paid to multiplexes may be phased out first. "VPF for single screens is phased out more gradually, given their dependence on a VPF-driven lease model for digital cinema equipment. Till the VPF sunset is decided and implemented, the DCE providers and the producer may come together and negotiate mutually acceptable VPF charges to ensure that there are no limitations or disruptions in the exhibition of films, in the larger interest of all stakeholders including consumers of cinema," said CCI.
