Digital cinema service providers announced that they will not charge VPF for November
Producers, exhibitors and digital cinema service providers have agreed to a temporary truce after digital cinema service providers, UFO Moviez and Qube Cinema, on Tuesday announced that they will not charge Virtual Print Fee (VPF) — a fee paid by producers to digital cinema service providers to screen films — for the month of November.
Despite the companies slashing the VPF by almost 50% to facilitate the release of new films a few weeks ago, producers were adamant that they will not budge from their demand for the VPF to be abolished. With many theatres reopening with old films, companies have offered a full waiver to the producers and distributors for this month.
“Qube is of the understanding that providing this full discount on VPF would enable producers and distributors to release films during the festive Deepavali season, help kick-start cinema operations and finally get the film industry back on its feet again. Only charges for logistics of content delivery and key management, both for DCI and E-Cinema content, will be applicable,” said Qube Cinema in a statement. UFO Moviez’s statement was also similar.
Following this announcement, the Tamil Film Active Producers Association (TFAPA) released a statement that producers would release new films in November and hoped for a quick resolution.
In a statement, TFAPA president P. Bharathirajaa said it was not their intention to affect the business of theatres and producers. “Though digital cinema service providers are trying to divide us [producers and theatre owners] by waiving VPF for two weeks, we welcome their decision and consider it a small win, and will agree to screen films for two weeks,” he said. He added that they are firm in their demand to not pay VPF anymore.
The deadlock between producers, exhibitors and digital cinema service providers has its roots in an arrangement between the three stakeholders as the film industry transitioned from analog ‘film prints’ to digital cinema.
Almost two decades ago, digital cinema service providers invested significant amounts of money to create the required infrastructure in theatres across Tamil Nadu to aid in the transition to digital cinema.
An embrace of digital cinema enabled producers to distribute their films to a huge number of screens at a significantly lesser cost, since a ‘film print’ would cost ₹50,0000 to ₹60,000 per print compared to an average cost of ₹10,000 per theatre. This increased revenue as a result.
While the Tamil producers argue that they have paid the VPF for years and the investment made must have been “recouped”, the digital cinema service providers, in response, contend that producers in India, unlike in the West, never paid high VPF rates but paid some of the lowest rates for services.