Kollywood strike enters day 40: As industry losses mount to Rs 130 crore, all you need to know about the impasse

As of 4 April 2018, it has been precisely 40 days since the last lot of Tamil films hit the screens; since 23 February onwards, the industry has come to a grinding halt. The current Kollywood strike — stirred by disagreements between theater owners, producers, and digital service providers — has reached its zenith, making this the longest-ever deadlock in the history of the Tamil film industry. As the strike enters its second month, here’s a comprehensive look at the timeline of events, the demands of the concerned parties, the main releases that are affected and the way ahead: South Indian Film Industries announce shutdown from 1 March 2018 The Telugu Film Chamber of Commerce was the first official trade body to initiate this now-historic strike by announcing the shutdown of theaters in Andhra Pradesh and Telangana from 1 March 2018 to express their strong disapproval against the Virtual Print Fee (VPF) charged by Digital Service Providers (DSPs) like Qube, UFO to name a few. Telugu film producers placed a series of demands before DSPs — including the abolition of VPF or a significant reduction in the charges to ease the burden on the makers, and a share of the advertising pie earned from theaters, including positioning their teasers/trailers during the interval for free of cost. Later, other film industries including Tamil, Telugu, and Malayalam, joined forces in unison to put into action their long-standing displeasure against the DSPs. A joint action committee was formed comprising members of all film industries, and a series of meetings were held in Bengaluru, Hyderabad, and Chennai through February where producers vigorously negotiated their demands with DSPs. You may like — Kollywood 2018 Quarter 1 box office report: Padmaavat, Black Panther save day as Tamil films flounder After DSPs offered a new fee structure with a considerable reduction in VPF, other film industries, except Kollywood, approached the issue pragmatically, accepted the recent offer and quietly resumed operations. While Malayalam and Kannada film industries expressed their solidarity by observing a one-day token strike and didn’t miss any release date, Tollywood lost out on film releases in the first week of March before they accepted the final offer of DSPs. [caption id=“attachment_4418381” align=“alignnone” width=“825”] As of 4 April 2018, it has been precisely 40 days since the last lot of Tamil films hit the screens; since 23 February onwards, Kollywood has come to a grinding halt. PTI Photo[/caption] Tamil Film Producers’ Council  — Steadfast demands and unrelenting pressure The strike in Kollywood, spearheaded by Vishal, president of Tamil Film Producers’ Council (TFPC) and secretary of South Indian Artistes Association (SIAA), escalated as demands from the producers increased. Their steadfast demands for DSPs and unrelenting pressure on theatre owners exponentially grew by the hour, without any solution in sight. At least, not yet. Vishal constantly reiterated that TFPC is revamping the industry for the betterment of all stakeholders involved. The no-new release rule was implemented from 1 March 2018, and it’s been more than a month since a new Tamil film saw the light of the day in Tamil Nadu, further slowing the already dwindling footfalls across theatres in the state. The main demands of TFPC to DSPs include the complete abolition of VPF and a share in the advertising revenue. Simultaneously, they also fired a salvo by urging theater owners to computerise tickets in all theaters to bring more transparency (when senior distributor Tiruppur Subramaniam released an audio message lambasting producers for turning a blind eye to the skyrocketing salaries of A-list actors). The elimination of the online ticketing fee consumers are charged is also one of the demands placed by TFPC to theater owners. Firstpost exclusive — TFPC president Vishal on the ongoing Kollywood strike: ‘We will withdraw once our demands are met’ In an interview with Firstpost, Vishal simplified the TFPC’s final stand about bringing a sunset clause on VPF and their ultimate demands: “We have given them (DSPs) time up to April 2019 for E-Cinemas and until April 2020 for D-Cinemas. Till then the theatres will share VPF amount with the producers on 50:50 basis. All theatres in Tamil Nadu should be computerised, which they have agreed to do by 1 June this year. These are the two main demands, and if implemented new releases can finally resume.” Conjecture now is that Vishal, in a final attempt, has set out to meet individual theater owners to win over their trust and coerce them to collaborate with a new DSP (reportedly the Mumbai-based K Sera Sera). However, industry observers point out it’s going to be a herculean task since a majority of theater owners stand united in their decision not to pay VPF from their pockets. Last week, TFPC announced their decision to carry out a procession towards Fort St. George to meet Chief Minister Edappadi Palaniswami and the Minister for Information and Publicity Kadambur Raju and place their demands on 4 April 2018. The state government refused to provide permission for the procession, and the plan was eventually dropped. However, the state agreed to TFPC’s demand to commission a dedicated film development board to look after the industry. Digital Service Providers — Considerable final offer and the waiting game Digital Service Providers, mainly Qube Technologies, have made their final offer with a reduction in the VPF tariff for E-Cinemas and D-Cinemas. In an extensive two-part interview with Firstpost, Qube co-founder Senthil Kumar reasoned the arguments and accusations of Tamil film producers, enlightening readers about their working model and how they are charging far lower VPF than the rest of the world. Read on Firstpost: TFPC didn’t inform us before the strike; their demands are unreasonable, says Qube co-founder Senthil Kumar Also read: TFPC is making the whole industry suffer because of an unknown advantage, says Qube co-founder Senthil Kumar About their final offer, Senthil told Firstpost: “By mid-February, in our Chennai meeting, they sought a reduction of 25 percent in VPF. We agreed to provide 18-23 percent reduction, and this variation is due to the different shelf-life of films. So, we offered a discount of 80-90 percent from what they demanded. Their demand for the abolition of VPF is completely unreasonable and is also 100 percent something that we cannot sustain as a company. We have invested nearly Rs 450 crores in this business. We have not taken a single rupee as dividend out of this company. Anybody can go the Registrar of Companies and take the balance sheet of our company for the last ten years and see what we have made.” Now, the fact that TFPC — which had earlier sought to get rid of VPF entirely — has agreed to share VPF with theater owners on a 50:50 basis shows that DSPs’ final proposition to the producers was worth taking into account. As the stalemate between theater owners and producers, who are at loggerheads, continues to grow, DSPs are now playing the waiting game, having presented their last proposal. Theater Owners Association — ‘We will never share the VPF with producers’ While the theater owners association has concurred with TFPC on computerised tickets and promised to implement it from 1 June this year, they have vehemently opposed sharing the VPF with producers. Rohini Panneerselvam, president of Tamil Film Exhibitors’ Association (TNFEA), has said that they will never share the VPF with producers. On 16 March, TNFEA announced an indefinite strike urging the state government to completely remove the eight percent local body entertainment tax (LBET) levied on tickets. They also sought the revision of theater maintenance charges from Rs 1 to Rs 5 per ticket and license renewal period from three years to one year. After the state government assured that they would fulfill the demands, Abirami Ramanathan, the president of the Tamil Nadu Theatre Owners and Distributors Association, announced the withdrawal of strike on 23 March. Theater owners maintain that the cost of maintenance and servicing of digital equipment have increased manifold and the advent of digital technology brought in more privileges to the producers — and not exhibitors. Now, they are hell-bent on not sharing the VPF with producers, and a majority of them are against the entry of a new digital player. Sources say K Sera Sera is planning to offer a drastic reduction in VPF and are ready to roll out E-cinema projectors to theater owners who are willing to take the risk. “At a time when we are ready to provide DCI projector at the cost of E-cinema from next year, whoever comes in today with the intention of providing E-cinema projectors will only burn their fingers,” Qube co-founder Senthil Kumar had told Firstpost. More than 40 films stalled in various stages of production TFPC’s embargo on film shootings, press meets, audio and trailer launches from 16 March has stalled work on more than 40 films currently in various stages of production. The release of Rajinikanth’s Kaala, which was supposed to hit screens on 27 April, will be postponed along with a slew of other low-budget to mid-level projects which were targeting a March or April release. With the release pipeline clogged, the entire schedule of films will now have to undergo a significant change. Trade pundits peg the combined losses on theatrical ticket sales, food and parking charges at approximately Rs 120-130 crore for the past one month. It’s been reliably learnt that TFPC has reached an agreement with producers that the films will be released only based on the censor certification date. The movies which were certified first would be given release priority. Arulnithi’s Iravukku Aayiram Kangal, GV Prakash’s Sema, and Sai Pallavi’s Karu are reportedly among the first set of films that will see the light of day once the strike is called off.