The Producers Guild of India joins the fight against VPF

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As per reports, the Film and Television Producer’s Guild of India encourages cinemas to move to 2K technology for better projection quality and also to protect content from leakages.

With the introduction of Digital Cinema Initiatives –the Producers Guild of India in association with digital equipment company Krian Media aims to increase the footprint of Hollywood releases in India, benefit all producers over non-payment of VPF, benefit exhibitors by increasing advertisement revenues, and bring down the VPF payout under the sunset ambit as offered by digital integrators worldwide. In digital cinema, resolutions are represented by the horizontal pixel count, usually 2K or 4K.

A Virtual Print Fee (VPF) is a subsidy paid by a film producer towards the purchase of digital cinema projection equipment for use by a film exhibitor. Reportedly, there are about 12,500 operational screens in India. Out of these, almost 8,000 screens do not satisfy the International standard (Digital Cinema Initiatives) of digital film projection. They outsource equipment from Digital Service Providers thus continuously increasing cost of distribution which is significantly impacting revenues for the film producers.

VPF model in India seems to be flawed as it does not have a sunset cap. Hollywood has successfully followed the VPF model with a Sunset Cap i.e. once the capital cost of projector and server is recovered by exhibitors/integrators by way of VPF as well as advertising revenues, the charges be capped to a small fee only for providing services.

In March 2018, movie producers and distributors in the South had gone on a film strike over the VPF. They wanted a complete abolition of VPF. No new movies were released during the strike period. The strike which lasted for more than a month was then called off following the tripartite talks held between the Tamil Film Producers Council, the theatre owners and the digital service providers.  As part of the agreement reached, it was decided that VPF for e-cinema projectors would be slashed by 50 per cent. It was also decided that the producers and the digital service producers would negotiate a reduction in VPF for D-Cinema projectors over the next six months.

In our guest interview with Mr. Kulmeet Makkar-CEO of the Guild, Mr. Makkar had stated “VPF is a grave issue for us and needs to be addressed on priority. The continuously increasing cost of distribution is significantly impacting revenues for the film producers. Technically speaking, the VPF model in India is flawed. One cannot keep paying VPF without a Sun Set clause. Hollywood has successfully followed the VPF model with a Sunset Cap which is also implemented in India whereas the VPF on Indian content as of date has no closure date which is unfair. Once the capital cost of projector and server is recovered by exhibitors/integrators by way of VPF as well as advertising revenues, the charges should therefore be capped to a small fee only for providing services.”

Image source: here