Dispute between PVR-INOX and Malayalam film industry over virtual print fee

What is PDC?

PDC is a content mastering unit launched as an alternative to content providers like Qube, UFO, PXD, and TSR. PDC is an affordable option for the producers and the distributors as the fee to screen a film is only Rs 5,000 to Rs 6,000.

What was PVR’s response?

PVR CEO Kamal Gianchandani came up with a post on X (previously Twitter) explaining the move. “Our newly inaugurated 9-screen cinema, PVR Forum Kochi has been advised by the association to source Malayalam movie content exclusively through one channel, that is through the content mastering and distribution network run by the Association. Such an action of forcing an exhibitor to procure content from only one source is anti-competitive in nature and prohibited under the law. As a law-abiding member of the Indian Film Industry, we are unable to comply with this advice,” he said in the post.

What is the virtual print fee?

Virtual print fee is a subsidy that producers/distributors pay to enable exhibitors to cover the cost of converting their analog projectors into digital ones. The producers in Kerala mostly pay around Rs 20,000 to Rs 25,000 per week during the initial days of release to screen their movies, and the amount gradually decreases. There have been allegations that the VPF charged by the theatres are high.

What does the Competition Commission say on the issue?

Competition Commission of India (CCI) in a market study on the film distribution chain in India in 2022 has found that VPF may lead to several anti-competitive outcomes, namely, limiting the supply of movies, instances of refusals to deals, and creating barriers to entry. “Moreover, it is unreasonable to expect producers to bear the cost of equipment for cinemas in perpetuity, in addition to paying for all promotion and production costs for a movie. Additionally, it is unclear to what extent VPF gives smaller theatres a lifeline, as most of the VPF collected in relation to such theatres is taken by the DCE provider,” the study said.