Tollywood and Southern Industries, have announced a strike against Digital Service Providers like UFO, Qube and others, who have become the major players in the digital projection system that Telugu Film Industry adopted, over the last decade.
Well, like Film Industries, all over the world, Telugu Film Industry, too started shifting away from Analog to Digital Projection. Earlier, it used to be Analog prints that were processed at the labs that were sent to theatres as reels in the boxes and they used to be loaded by the theatre management after paying the minimum amounts to distributor and exhibitor.
Post that, they used to deduct theatre rent and entertainer tax from the ticket amount and the remaining is reported to be the share that a movie has earned that would go to exhibitors and distributors, according to the agreements made by them. After te distributors and exhibitors have made their share of profits, producers used to get the money from remaining. If the producers have sold the movie rights outright to a buyer, then the buyer would get all the additional profits according to the agreements with distributor.
With Digital Projection, a service provider like UFO or Qube, will give a chart of rents and theatres available to a producer. The producers, to 'hold' a theatre or lock it for the release date, they pay an advance amount to Digital Service Provider(s), who have set up their equipment at the theatres, so that, they will load the content provided by the producer to play on their projection system at the theatres. They release a key to the hard drives and loaded content, to be accessed at the theatres, once they receive full payment for one week for each theatre that the producer wishes to book.
Even if a distribuitor has bought the rights of the movie to distribute in the particular area, producers are expected to pay the Virtual Print Fee, VPF, to the Digital Service Providers and only, when they give clearance for loading the content, the movie will play in the theatres.
Exhibitors and theatre owners from a particular centre, will normally be in an agreement with a certain service provider and the VPF, has to be paid to ghat particular service provider, if producer wants his film to be played in that particular centre and another service provider owns or in an agreement with another theatre in near by centre, so producer has to pay, VPF, for the other service provider too, for a release in that centre.
For Example, if in Kukatpally area in Hyderabad, Viswanath theatre in KPHB is using projection of UFO and Bhramarambha theatre in Hydernagar uses, Qube, then producer has to pay for UFO and Qube, DSPs, to have his movie played in KPHB and Hydernagar, that come under Kukatpally area of exhibition in Hyderabad.
This has been the major concern of Small and Medium budget producers. They will have to pay Rs. 12,000 as VPF, per week per theatre, for a Digital Service Provider to load the content in the theatre that supports their equipment. It could cost more than one lakhs to secure a good release and unfortunately many small and medium budget films fail to bring in audience to theatres and they end up not even collecting the VPF charges back.
This has become a major issue for producers and they have been asking for reduction or complete zero VPF, from past 4 years, and as the DSPs, decided to increase the VPF, even big players came into the picture, to address the issue and hence, the strike has been 'called for'.
Is this the only reason? Is distribution system and exhibition is the major issue? Well, business wise, Yes.
The Producers, who desire to make a film that they wish to be made in certain style, desire it to be played in certain number of centres, to recover the costs. Theatre owners used pay some advance for the prints to major exhibitors and they used to pay to distributors, which used to go to producers as pre-release advance.
Now, Digital Service Providers, decide on which movie will play in which centre, as they have to load the content in that particular theatre, if the producers and distributors want to play their film. If and only if, they give clearance that they have received the VPF, amount then that theatre will play the movie.
This has become a huge deal for a producer as the cost of production is already high and if he or she, wants to push for a second week run, they cannot. Because, even big hero films are failing to bring in even 50% of audience on weekdays, if they fail to get a good word-of-mouth.
The entire fiasco has many more business complicating issues but is the business model only driving producers and film business into a hole? Why aren't producers assured of a certain amount in collections? Why are they looking for Share Guarantees, outright buyers and satellite, digital right deals before release to make money back? Why there is no 'guarantee' post release?
Content is the key factor here. Any business like Film and TV, are run by content but not by business system. It is a technical aspect for who make more money but for a business to thrive, there should be money, first. For a film business, money comes from a viewer.
When a viewer walks into a theatre to watch the movie, then only they are assured of making money. Why that assurance is dying? Why people are preferring only few films and not all?
Content with variety makes people to watch it on screen. If you make the same film that a big producer makes on small budget with a new 'hero', will that film need an audience attention?
A film like Baahubali with all these problematic systems in place, did command huge shares and even improved market for Telugu movies. What made the movie collect so much? Why it is such a popular film with audience?
Well, they were compelled to watch as it looked spectacularly interesting and well-executed. Even Awe, made some money back being such a different and a weird film, for Telugu taste! So, what is the 'real' reason here? Whom are we blaming?
A system that helps everyone is required for sure, but the USP of it, the content, should not be ignored. Hope, producers wake up from deep slumber and address the 'real' content issue as well, that will compel audience to walk into theatres and then, a better system is making all the parties money!
Well, like Film Industries, all over the world, Telugu Film Industry, too started shifting away from Analog to Digital Projection. Earlier, it used to be Analog prints that were processed at the labs that were sent to theatres as reels in the boxes and they used to be loaded by the theatre management after paying the minimum amounts to distributor and exhibitor.
Post that, they used to deduct theatre rent and entertainer tax from the ticket amount and the remaining is reported to be the share that a movie has earned that would go to exhibitors and distributors, according to the agreements made by them. After te distributors and exhibitors have made their share of profits, producers used to get the money from remaining. If the producers have sold the movie rights outright to a buyer, then the buyer would get all the additional profits according to the agreements with distributor.
With Digital Projection, a service provider like UFO or Qube, will give a chart of rents and theatres available to a producer. The producers, to 'hold' a theatre or lock it for the release date, they pay an advance amount to Digital Service Provider(s), who have set up their equipment at the theatres, so that, they will load the content provided by the producer to play on their projection system at the theatres. They release a key to the hard drives and loaded content, to be accessed at the theatres, once they receive full payment for one week for each theatre that the producer wishes to book.
Even if a distribuitor has bought the rights of the movie to distribute in the particular area, producers are expected to pay the Virtual Print Fee, VPF, to the Digital Service Providers and only, when they give clearance for loading the content, the movie will play in the theatres.
Exhibitors and theatre owners from a particular centre, will normally be in an agreement with a certain service provider and the VPF, has to be paid to ghat particular service provider, if producer wants his film to be played in that particular centre and another service provider owns or in an agreement with another theatre in near by centre, so producer has to pay, VPF, for the other service provider too, for a release in that centre.
For Example, if in Kukatpally area in Hyderabad, Viswanath theatre in KPHB is using projection of UFO and Bhramarambha theatre in Hydernagar uses, Qube, then producer has to pay for UFO and Qube, DSPs, to have his movie played in KPHB and Hydernagar, that come under Kukatpally area of exhibition in Hyderabad.
This has been the major concern of Small and Medium budget producers. They will have to pay Rs. 12,000 as VPF, per week per theatre, for a Digital Service Provider to load the content in the theatre that supports their equipment. It could cost more than one lakhs to secure a good release and unfortunately many small and medium budget films fail to bring in audience to theatres and they end up not even collecting the VPF charges back.
This has become a major issue for producers and they have been asking for reduction or complete zero VPF, from past 4 years, and as the DSPs, decided to increase the VPF, even big players came into the picture, to address the issue and hence, the strike has been 'called for'.
Is this the only reason? Is distribution system and exhibition is the major issue? Well, business wise, Yes.
The Producers, who desire to make a film that they wish to be made in certain style, desire it to be played in certain number of centres, to recover the costs. Theatre owners used pay some advance for the prints to major exhibitors and they used to pay to distributors, which used to go to producers as pre-release advance.
Now, Digital Service Providers, decide on which movie will play in which centre, as they have to load the content in that particular theatre, if the producers and distributors want to play their film. If and only if, they give clearance that they have received the VPF, amount then that theatre will play the movie.
This has become a huge deal for a producer as the cost of production is already high and if he or she, wants to push for a second week run, they cannot. Because, even big hero films are failing to bring in even 50% of audience on weekdays, if they fail to get a good word-of-mouth.
The entire fiasco has many more business complicating issues but is the business model only driving producers and film business into a hole? Why aren't producers assured of a certain amount in collections? Why are they looking for Share Guarantees, outright buyers and satellite, digital right deals before release to make money back? Why there is no 'guarantee' post release?
Content is the key factor here. Any business like Film and TV, are run by content but not by business system. It is a technical aspect for who make more money but for a business to thrive, there should be money, first. For a film business, money comes from a viewer.
When a viewer walks into a theatre to watch the movie, then only they are assured of making money. Why that assurance is dying? Why people are preferring only few films and not all?
Content with variety makes people to watch it on screen. If you make the same film that a big producer makes on small budget with a new 'hero', will that film need an audience attention?
A film like Baahubali with all these problematic systems in place, did command huge shares and even improved market for Telugu movies. What made the movie collect so much? Why it is such a popular film with audience?
Well, they were compelled to watch as it looked spectacularly interesting and well-executed. Even Awe, made some money back being such a different and a weird film, for Telugu taste! So, what is the 'real' reason here? Whom are we blaming?
A system that helps everyone is required for sure, but the USP of it, the content, should not be ignored. Hope, producers wake up from deep slumber and address the 'real' content issue as well, that will compel audience to walk into theatres and then, a better system is making all the parties money!