Will the VPF issue bring the curtain down on theatres once again?

NARAYANAN V Chennai | Updated on October 22, 2020

Even as theatres in many parts of the country struggle to resume full operations, the Indian film industry is bracing up for another showdown between producers and movie exhibitors over the contentious Virtual Print Fee (VPF).

The VPF issue, which brought the entire Tamil film industry to a standstill for more than 45 days in 2018, is back to the fore again.

The Tamil Film Active Producers’ Association (TFAPA) recently wrote a letter with a set of six demands to the president of Tamil Nadu Theatre Owners Association to allow new movie releases. Primary among the demands is the abolishment of VPF charges, which the producers say they have borne on behalf of theatre owners for the last 10 years and can no longer do it.

What is VPF?

VPF is a charge paid by producers to digital service providers (DSPs) such as Qube Cinema and UFO Moviez. Earlier, when films were developed from negatives, producers and distributors used to bear the print cost to develop those films while exhibitors bore the projector cost. However, in 2010, cinemas were upgraded to digital projectors. Since the technology was costly, it was agreed that theatres will levy VPF on producers and distributors for a period of five years to recover the cost. VPF charges range between ₹12,000-25,000 per screen depending on the scale of film and single screen/multiplex.

“VPF consists of two components. One is towards the cost of a projector installed at the theatre and the other is for the content that we deliver which are serviced at the theatres,” Producer and Distributor, G Dhananjayan said, adding, “Projector is the fundamental equipment requirement of a theatre and why should a producer pay the lease charge for it under the name of VPF.”

However, film exhibitors seem to downplay the threat. “Since theatres are expected to re-open after 8-months, I believe the producers are also willing to release their movies and VPF will not be a big issue,” said Tiruppur Subramaniam, President, Tamil Nadu Theatre and Multiplex Owners’ Association.

But TFAPA tweeted on Wednesday that, “We as producers are clear that no new film release is scheduled by our members till the solution to VPF issue is achieved with theatre owners.”

Kollywood is not the only industry to be affected by the VPF issue. Various box office websites have also mentioned that leading Bollywood producers are debating on the need for VPF.

In 2019, Bollywood Producer Ronnie Screwvala unsuccessfully sought Competition Commission of India’s intervention calling the VPF charge as ‘selective, draconian, discriminatory and exploitative’. In his petition against the four multiplex chains — PVR, INOX, Cinepolis and Carnival cinemas — Screwvala alleged that an Indian producer has to pay ₹2-3 crore to multiplexes as VPF if they want their films to be released in 1,000-1,500 screens.

Uncertainty looms

Within three days of theatre opening in Karnataka earlier this month over 60 Kannada films have been stalled due to a disagreement between Film Producers Association & DSPs over this issue. The situation is no different in neighbouring Andhra Pradesh. The Telugu Film Producers Council last week wrote a letter to The Telugu Film Chamber of Commerce stating that, “The third parties hired the Digital equipment to the Theatres are looting the industry and therefore Chamber has to take immediate action to save the industry from third parties.”

With theatres already running short of fresh content and losing some of the major titles to OTT platforms in the last few months, the VPF issue may once again bring the curtains down on theatres.

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Published on October 22, 2020
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