Digital cinema service providers like Qube are looking at a significant revenue loss with no new movie slated for release starting March 1 in the South owing to a stand-off over Virtual Print Fee (VPF).
Movie producers and distributors are going on strike over the VPF. This means in Tamil Nadu new movies will not be released from March 1; in Kerala, they are going on a one-day strike on March 2; in Karnataka new movies will not be screened starting March 9. In Andhra Pradesh and Telangana, cinemas will be closed from March 2.
Sivaraman M, Regional Marketing Manager, Qube Cinema Technologies, said the indefinite strike is likely to slow down their new rollouts in addition to the revenue loss. Digital service provider (DSP) gets a VPF of ₹40 crore per year.
“But, the actual impact will be known only after three months,” he said. The company has a presence in over 2,000 screens in India. UFO Moviez and Qube together operate in over 7,000 screens in the country.
DSPs charge ₹15,000 as VPF per screen per movie. The fee includes conversion to digital package, licensing, delivery and editing the movie into different versions. It costs ₹6-8 lakh per movie overseas and in India, the producers only pay a fraction of that, he added.
Huge maintenance cost
The digital projectors cost ₹30-40 lakh and come with a huge maintenance cost that many exhibitors cannot afford. So, the DSPs install the projectors and gets their revenue from the in-house advertising and VPF from producers.
According to a press release from the Tamil Nadu Film Producers’ Council, the producers have decided to stop paying VPF and will decide the way forward after discussion with the exhibitors.
The tiff between DSPs and producers started a month back when the latter sought reduction in the cost. The service provider decided to reduce the fee by 23 per cent.
That is from ₹325 per show per screen per day, the price was brought down to ₹250 and the VPF was capped at ₹20,000 even when the movie is successful and runs for months.
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