The standoff between the south Indian film industries and Digital Service Providers has thawed somewhat. The Kannada and Malayalam film industries showed their solidarity with a one-day strike but permitted new releases from then on.
However, the Telugu and Tamil film industries decided that no new release would hit the screens from March 1. On Thursday, the Telugu film industry came around and a resolution has been reached between the DSPs and the producers.
The Tamil film industry is nevertheless still holding out, a stand that's severely affecting the theatre owners in the state. Many of them believe that there is a hidden agenda behind the Tamil industry's decision.
Speaking to TNM, Venkatesh of Woodlands Theatre in Chennai, says that the Tamil film industry's stance is unreasonable.
"When digital cinema came in lieu of film print, the costs went down from Rs 60,000 to Rs 20,000 per print per theatre. The releases also went up manifold, from 100 screens to around 300 screens," he says.
However, Venkatesh alleges that the Tamil film industry, while ignoring 97% of the production cost, is focusing on the 3% spent on Virtual Print Fee (VPF) and wants to go back in time.
"They want us to go back to the days of elementary cinema technology which is obsolete and piracy-prone. The world has moved ahead and if we don't move with the times, we will become obsolete, too," he says.
Calling the situation a tragedy, Vekatesh says, "Revenue from a film is now only 40% from India, 60% is from the rest of the world. Foreign standards accept only 2K cinema and they're willing to pay the DSPs there. But in Tamil Nadu, they don't want to pay. If Tamil cinema is played in other states, they're saying DSPs can charge but not if they're played in Tamil Nadu - I don't know what's the logic here!" he exclaims.
Venkatesh points out that technology is constantly changing and instead of adapting, the Tamil film industry wants to use "primitive" tech.
"To compete with the world, we also have to be advanced. Otherwise, India will become digitally obsolete. People who don't understand technology or software, to save 3%, they are trying to stop advancement," he says.
Venkatesh believes that there are vested interests involved in the prolonged strike and says the idea is to break the control that DSPs like UFO and Qube currently enjoy, in order to introduce new players who don't have the required credentials.
"There are about 60 Tamil films waiting to be released. What's the point in this strike?" he asks.
Theatre owners worry that this could mean people will stop going to the theatres entirely. As it is, footfalls have come down thanks to online piracy and Internet platforms like Netflix and Amazon Prime.
Film prints, which used to cost around Rs 60,000 before digital technology, came down to Rs 20,000 and is currently at about Rs 15,000 on an average.
While traditional film projectors were low cost, low maintenance and lasted long, producers had to pay high costs for the print and also ensure security through armed guards.
When the digital technology came in, theatres had to invest in equipment with high maintenance costs and frequent expensive upgrades. Producers, on the other hand, enjoyed the benefit of low print costs and ensure a wider release for their films.
Since most theatres didn't have the capital, risk-taking ability or technical knowledge to switch to digital technology, the transformation wasn't immediate. The theatre owners were not quite taken by the idea of having to spend their money so producers could enjoy the benefits.
DSPs stepped in to resolve the problem. They financed the equipment for theatres and offered technical services to producers. They collected a Virtual Print Fee or VPF to cover costs. The DSPs also took care of the infrastructure needed to facilitate digital print technology. From ownership, theatres shifted to a service model.
DSPs argue that films now enjoy a much wider release (including overseas screens) at low costs, compared to earlier times when film prints were used.
Speaking to TNM, Senthil Kumar of Qube Cinema, a leading DSP, denied that any agreement signed between Qube and theatres had been violated.
Tracing the history of how theatres converted to digital technology, Senthil Kumar said, "We offered an alternative to film prints at a much lower cost. 1/4th the cost of a film print which has now become 1/5th of the film print. Producers chose to use these services when all the time they had film prints - it's not as if anybody deprived them of film prints. We set up a system where even though there were film prints and projectors required to play them in theatres, we offered a parallel path of digital projection and digital print. And they chose to use that all these years. Even today, film prints are available at around Rs 90,000 of Prasad Labs and Film Labs in Bombay. So there's no reason why you have to say this has become expensive because we've become cheaper over time. We've introduced more flexible structures but we've not increased prices by a rupee in 10 years."
With the three other south Indian film industries moving away from the strike, it remains to be seen for how long the Tamil industry will hold out. Given that films are made at huge financial expenditure which often comes at high interest rates, experts opine that this stance could end up hurting the industry very badly.