Bombay Times spoke to the producer after the Competition Commission of India ruled in favour of the multiplexes on the Virtual Print Fee (VPF) issue
Rachana Dubey (BOMBAY TIMES; July 26, 2019)

Back in March, producer Ronnie Screwvala had filed case with the government body Competition Commission of India, against four multiplex chains — PVR, Inox, Cinepolis and Carnival Cinemas — and the FICCI Multiplex Association of India, alleging undue imposition of Virtual Print Fee (VPF). In his petition, the filmmaker complained that the multiplexes make Indian film producers/distributors cough up Rs 20,000 for every film screened, per screen as VPF.

On Wednesday evening, the CCI ruled the matter favouring the multiplex chains and their association, citing that there wasn’t enough reason or material for them to initiate a probe in the matter as Ronnie had demanded in his petition. The Commission observed that the general allegations made in the case, including lack of transparency in exhibition of trailers and promotions, do not fall within the ambit of the provisions of the Competition Act, 2002. The Commission was of the opinion that there exists no prima facie case warranting investigation into the matter.

Talking to BT about this, Ronnie said, “I have read the ruling from the CCI on the cartelization by the multiplexes and they have dismissed the petition on the grounds that it lacked documented proof of such misuse of collective power. My complaint was not an anonymous one which is normally how it starts. It was based on asking the CCI to launch a formal probe and investigation and they would have got all the documentation and proof they needed. But they have ruled on it and I respect and abide by their final view. I am disappointed, though not surprised, at the complete lack of support from all colleagues, producers, distributors and the creative community who in private commended the action. But not one individual, company or association supported my complaint as that would have gone a long way to endorse with the CCI the apparent practices that is common knowledge to all. I am a firm believer that there is a circle of life and in the end, truth always catches up with reality. So, I am sure that at an appropriate time there will be justice to this. Meanwhile, it’s business as usual for the multiplexes while fair play takes a back seat.”

Talking about the ruling, Kamal Gianchandani, the head honcho of PVR Cinemas, told BT, “I think the CCI’s decision validates what we have believed and said from the time this one particular matter came to the fore. I am thankful to them for viewing it objectively.”

To jog your memory, as a result of Ronnie’s petition, Inox Leisure had boycotted the film Mard Ko Dard Nahi Hota and refused to screen it (which was produced by Ronnie’s company). Reportedly, he was asked to withdraw his complaint, if he wanted the multiplex chain to screen his film. The producer, it’s learnt, had paid VPF to other multiplexes, albeit under protest, for his film to be screened. His petition described VPF as a draconian, discriminatory charge that the multiplex chains are forcibly imposing.

In 2010, following a discussion among producers, distributors and exhibitors, the process of transformation from physical prints to digital had started. Back then, it was agreed upon that VPF will be levied to support the transition for five years, which ended in December 2015. According to Ronnie’s complaint, the period was extended twice, following a verbal agreement between producers and distributors with the sunset clause till December 2017.

What is Virtual Print Fee?
Earlier, when films were developed from negatives, the distributors and producers had to pay a Print Fee to develop the print of their films. And the exhibitors used to bear the projector costs. VPF was first introduced to help make multiplexes compliant with Digital Cinema Initiaties (DCI), a technology that helps reduce cost, curbs piracy and enhances the movie-viewing experience. Since the technology was costly, it was agreed that the multiplex chains will charge Rs 20,000 per screen for each movie for five years to recover that cost, beginning 2010.
---------------------------
Ronnie Screwvala reacts to the CCI’s order against his allegation of undue imposition of Virtual Print Fee by national multiplex chains; Kamal Gianchandani of PVR says it was not an industry issue
Himesh Mankad (MUMBAI MIRROR; July 26, 2019)

On March 19, Mirror had reported that Ronnie Screwvala had filed a case with the Competition Commission of India (CCI) against four multiplex chains—PVR, Inox, Cinepolis and Carnival Cinemas—and the FCCI Multiplex Association of India after the release of Sushant Singh Rajput’s dacoit-drama, Sonchiriya, for “anti-competitive collusion with respect to undue imposition of Virtual Print Fee (VPF)”. In his petition, the filmmaker had alleged that the multiplexes make Indian film producers/distributors pay Rs 20,000 for every film screened in their theatres as VPF. He described it as a “draconian discriminatory charge that the multiplex chains are forcibly imposing”.

We have now learnt that in its judgment passed on Wednesday, the CCI has given a clean chit to the multiplexes. “The informant (Ronnie) did not allege that VPF is anti-competitive per-se, rather, the allegation of informant pertains to its undue imposition after a certain period,” read the judgment. It observed that there is no formal/written agreement pertaining to imposition of VPF between producers and national multiplex chains, hence a ‘Sun-set clause’ doesn’t exist. The case was filed under section 3 of the Competition Act, 2002, which prohibits an association or enterprise from entering into anti-competitive agreement.

Ronnie, in his petition, had stated that following a discussion between producers, distributors and exhibitors in 2010, the transition from physical prints to digital started and a fee was agreed upon to support the evolution for five years till December 2015. It was extended twice, following a verbal agreement with producers/ distributors till December 2017. “But they have continued collecting VPF directly from distributors of Hindi and regional films,” he groused. Apart from VPF, Ronnie also raised concern over delay in release of payment by the multiplexes, lack of transparency over screening advertisements and inserting interval in films which don’t call for a break. These grouses didn’t fall within ambit of the Competition Act, 2002. The concluding lines of the CCI’s order read, “The commission does not find alleged contravention of the provision of Section 3 of the Act against opposite parties being made out.”

Kamal Gianchandani, CEO, PVR, reacted to the CCI’s order, saying, “It is a validation of the position we had taken all along.” He added that partners often have disagreements and he’s looking forward to the future because content producers and suppliers are integral to the business. “We are committed to working in a constructive fashion. I’m glad that the debate at the CCI forum is out of the way, this wasn’t an industry issue, but rather a disagreement with one producer,” he insisted.

Ronnie is disappointed that colleagues from Bollywood didn’t come forward to support him. He believes that CCI’s verdict would have been different had the film industry shown some unity. “Have read the ruling from the CCI on the cartelization by the ’plexes and they have dismissed the petition on the grounds that it lacked documented proof of such misuse of collective power. My complaint was not an anonymous one which is normally how it starts and was based on asking the CCI to launch a formal probe and investigation to all the practices and they would have got all the documentation and proof they needed. But they have ruled on it and I respect and abide by their final view. Am disappointed though not surprised at the lack of support from colleagues, producers, distributors and creative community who, in private, commended the action but not one individual, company or association supported my complaint as that would have gone a long way to endorse with the CCI the apparent practices that is common knowledge to all.”

He ended saying, “But I am a firm believer that there is a Circle of Life and in the end truth always catches up with reality so am sure at an appropriate time there will be justice. In the meantime, it’s business as usual for the ’plexes while fair play takes a back seat.”

Himesh Mankad (MUMBAI MIRROR; April 24, 2019)

Mirror has learnt that multiplex owners across the country have received permission for round-the-clock screening of Avengers: Endgame, which opens this Friday. With shows starting as early as 1 am, the film will play every hour. “As of now, we have 1.30 am shows at our theatre in Chinchwad and Pune and a 3.20 am show at the IMAX Screen in Wadala. We plan to add more shows” says Rahul Kadbet, Vice President, Programming, Carnival Cinemas.

According to a source, other multiplex chains including PVR, Cinepolis and INOX are also reworking their programming schedule to accommodate more shows. “It is for the first time that cinema staff will work in multiple shifts as the demand is high for the film. The first show may start as early as midnight,” adds the source.

Meanwhile, B-Town hasn’t taken kindly to the discrimination between Hindi films and their Hollywood counterparts. “They don’t have to pay VPF (Virtual Print Fee), are given a free hand in surge-pricing and now rules are being restructured so they can make more money. This is unfair,” grouses a filmmaker on the condition of anonymity.

Producer Tanuj Garg echoed the fraternity’s stance on VPF, saying, “It is unjust and discriminatory when a Hollywood film is not charged the fee and Bollywood is. As an industry we need to look at this aggressively. Ronnie (Screwvala, filmmaker) has made the first move in the direction and I am sure everyone else will unite for the cause.”

Manoj Desai, owner of Maratha Mandir and G-7 multiplex, popularly known as Gaiety-Galaxy, revealed that Disney (distributor for the film) had asked him to bump up ticket prices to Rs 250. “How could I do that when the price for a Hindi film here doesn’t exceed Rs 110? I was adamant to not screen the film, but they agreed to my terms,” he adds.

Avengers row aside, trade analyst Taran Adarsh stated that ticket rates, irrespective of a film’s scale, should be nominal. “Audience will watch a big film anyway. Reasonable pricing will bring more footfalls to the theatres, and that’s where the magic lies,” he asserts.

Producer Bhushan Kumar, whose Eid release Bharat will hit the marquee on June 5, sees this as a positive development. “With this, we got to know that such a thing is possible but at the end of the day, it’s all about demand.” When asked if he would propose a similar move for his Salman Khan-starrer, he said, “Why not? That said, even big Hindi films run for almost entire days with a five-hour break.”

After Ronnie Screwvala poured his heart out to BT about his fight against the Virtual Print Fee (VPF) charged by multiplexes for screening films, producers and distributors have begun to echo his sentiments. Here’s what some of them had to say...
Rachana Dubey (BOMBAY TIMES; March 27, 2019)

A few days ago, Ronnie Screwvala filed a case with the Competition Commission of India against four multiplex chains — PVR, Inox, Cinepolis and Carnival Cinemas — and the FICCI Multiplex Association of India, alleging undue imposition of Virtual Print Fee (VPF). In his petition, the filmmaker complained that the multiplexes make Indian film producers/distributors cough up Rs 20,000 for every film screened per screen as VPF.

As a result, Inox Leisure boycotted Mard Ko Dard Nahi Hota and refused to screen it in their properties. Prior to that, the scale of Sonchiriya’s release was impacted and looking at the cost involved, the filmmaker was forced to release Love Per Square Foot digitally. In his interview to Bombay Times, Ronnie told us, “The five charges I have brought about are very serious and need a final solution, even if that means a face-off. The matter is now sub-judice and so, I cannot comment more on it. But it would be a cop-out to not take full accountability for what you think needs to change.”

We also reached out to several top bosses in Bollywood’s production and distribution stream. A few of them told us what they think:

HANSAL MEHTA, PRODUCER-DIRECTOR
The matter is sub judice, but Ronnie has taken a huge initiative. He brought this before the CCI. With them, you can even file your complaints anonymously, but Ronnie didn’t do that. Now, we have to wait and watch what happens.

DINESH VIJAN, PRODUCER
There is merit in Ronnie’s stand against the system. Our initial gesture was meant to support each other and grow better and stronger as a fraternity. We have continuously extended our support to the exhibitors, and paid our dues. However, our agreement was for a five-year term and since we have upheld our end of the deal, they should, too. We should stand together and support each other in creating a fair and ethical working environment.

JAYANTILAL GADA, PRODUCER
I thank Ronnie for taking a huge step ahead. VPF is an expense that hurts producers. It’s been waived off in so many progressive countries. It affects the success ratio of films in a big way, and has to be brought down considerably if it can’t be fully eliminated. At some point soon, it has to be eradicated for more films to reach theatres and increase the ratio of hits that we produce. In fact, if you look at the South industry, everything is controlled, including the VPF expense. The industry must support Ronnie’s move.

AMOD MEHRA, INDEPENDENT DISTRIBUTOR
Ronnie was brave enough to take these cinema chains head on. The VPF cost was meant to recover the cost of transition to digital projection; it’s not anyone’s right to collect that money from distributors and producers for eternity. That’s like highway robbery. It’s become a given that all the multiplex chains, including the new ones that are starting with digital projection, will charge that VPF to producers and distributors. They arm-twist us and make sure that no one raises the issue, let alone fight it. And we are helpless as an industry because we need these cinema chains to screen films.

RAJESH THADANI, INDEPENDENT DISTRIBUTOR
As an industry, we should feel inspired by the South. They stood firmly together against the imposition of a hefty VPF amount. There is not much unity here and Ronnie is the lone warrior. I hope more producers join forces with him, because it’s not his problem alone.

ANAND PANDIT, PRODUCER (His film PM Narendra Modi releases in two weeks)
Business thrives on business and the fundamentals of demand and supply. What was started to aid a change has now become a habit. While everyone has the right to run their business and make profits, it’s important for multiplexes to understand that a big number of smaller, and great contentbacked films will not be able to release or sustain if this fee is continued.”

RAMESH TAURANI, PRODUCER
Ronnie has made a huge point in his interview with BT. VPF was meant to ensure that we all evolve together but now, it’s really hurting the producers. It’s a massive cost, which also has to be recovered for a film to be called a hit in the book of accounts. It’s a lot of pressure. Also, I agree with Ronnie’s point of view about spending excessive amount of time in a theatre watching ads in the middle or the beginning of a film. A two-and-a-half hour film takes over three hours and fifteen minutes to get over. It’s fatiguing for the audience to go through this and this needs to be looked into, immediately.
-----------------------------------
INOX DENIES ACCUSATIONS

Here’s the statement issued by the multiplex chain:

According to certain media reports that have appeared in recent days, INOX Leisure Ltd (INOX), has reportedly been named in a complaint made to Competition Commission Of India (CCI). INOX would like to clarify that we do not possess any specific knowledge of the complaint, and this statement is based solely on what has been reported by the media.

INOX strongly denies and vehemently rejects the defamatory accusations of unfair and discriminatory practices, made in the media reports and the interviews by the said complainant. INOX emphatically denies the slanderous and malicious allegations regarding conduct which amounts to cartelization, and states that all these allegations are false, fabricated and madeup to negatively impact our image.

INOX will pursue its legal options as advised by its counsel from time to time, and will respond to all queries received from, or processes initiated by, any regulatory authority as and when asked to do so. Since the matter appears to be subjudice, as indicated by the aforesaid media reports, INOX refrains from making any specific comments at this stage, or answering any specific allegations. INOX would, however, like to reiterate that it has full faith in due legal process.

INOX is India’s second largest, and fastest growing multiplex chain. As a responsible corporate entity, it is driven by the highest standards of corporate governance and legal compliance. INOX respects and adheres to all regulatory guidelines, in letter and in spirit, in all its business practices.