Just as sections of the Tamil film industry prepared themselves for some form of normalcy with the news of the Government thinking of reopening theatres with new norms in place, we’re back to a type of normalcy no one asked for. Keeping up with true Tamil film industry tradition, we’re witnessing yet another stalemate between two very powerful sections of the business — producers and exhibitors. On September 15, veteran director Bharathiraja, president of the newly formed Tamil Film Active Producers Association (TFAPA), stated that theatre owners “cannot dictate terms as to whom I should sell my product to”, making it clear that the dispute is far from over.
This issue began with Suriya’s production Pon Magal Vandhal going straight to OTT platform Amazon Prime Video, and the new producers’ association has now put forth six demands to exhibitors, with the main points being a share in the advertisement revenue and their decision to not pay for the VPF (Virtual Print Fee) to service providers such as Qube and UFO. With theatres struggling to make ends meet at such a time, we talk to three theatre owners from three different generations and places to listen to their side of the story. Will theatres survive this phase or will OTTs kill them?
Rakesh Gowthaman, Owner, Vettri Theatres, Chromepet
In an emotional response to Bharathiraja’s statement, theatre owner Rakesh Gowthaman tweeted out, “So the faint vision of OTT is the future. Let it be. End of theatres, let it be…” As a younger generation theatre owner, such a response doesn’t bode well for the future of the business. Explaining his stand, Gowthaman writes…
So the faint vision of OTT is the future, LET IT BE.
End of theatres, LET IT BE.
A single theatre in TN is a huge property considering the real estate value. This big asset has immense potential to turn into any commercial business format.
End of all, WE GOT NOTHING TO LOSE !
— Rakesh Gowthaman (@VettriTheatres) September 15, 2020
“Our intention is not to close the theatre down and it’s not that we have lost hope. We have read about what happened to Tenet in the US, and the money it lost, but even that hasn’t diminished our hopes. In the US, the occupancy in theatres was low even before the pandemic. As Tamilians, our love for cinema is very different, especially the love our audiences have for stars such as Ajith and Vijay. People will do anything for them, and they have decades to go.
On Twitter, I see many people tweeting to me saying things like, “Your theatre business in over. Your time has come.” But these are the kind of people who probably even watched Avatar on a mobile phone. I too have friends who watch pirated movies on their phones and laptops without caring about visuals or sound quality but that’s only one section. So, for that section and even a section among producers, OTT might be the only option and I accept that.
But, at this juncture, such a decision will be like placing curbs on the industry. In Tamil Nadu, we have 400 theatres, each with about 30 employees, and we will soon see all these people lose their jobs. This is not just us as theatre owners. Even the entire post-production side of filmmaking stands to lose big. Why will producers making films straight for OTT spend money to render their films in 4K or go in for professional colour correction and sound mixing? They will not even try to get the sound right. Even professional sound engineers are worried about their future. If you’re making a film for Netflix or Amazon, a regular 5.1 mix is enough. Even otherwise, a lot of people are watching these films on their phones, which means that even stereo sound will do. So, most films will be like a TV serial, quality wise.
What this also means is that budgets will come down and everyone, including the stars, stands to make much lesser money. That’s how it’s going to be. So if theatres have to shut down in the process, so be it. As a theatre owner, I don’t lose anything here. Of course, it is a field I am very passionate about and my emotional attachment to a family business will be difficult to let go of, but as a business, I wouldn’t lose anything. If I rent out my premises at Rs. 80 per square foot, I can easily make 30 to 40 per cent more than what we’re currently making. So there’s no need for producers to threaten us. If you go with OTTs, you’re going out of theatres. All we’re fighting for is the option to be the primary release option. If they want to release it on OTT first, then they cannot release the same film in theatres, simultaneously or otherwise.
As far as their demands are concerned, the VPF is a service charge collected by service providers like Qube or UFO. There are two ways their business model operates. In most cases, theatres have leased the projectors from these companies and that means that these companies take a share from the ad revenue these because they’ve entered into 10-year contracts with them. Only theatres that own their own projectors can take their own ad revenue. But the way it’s being highlighted is that all theatre owners are taking all the money generated through on-screen ads. You cannot get out of this system either because it would amount to breach of contract and cases will be filed.
Secondly, the producers’ association has asked us to relook the convenience fee charged for online booking. Big chains such as PVR or INOX have deep pockets and can invest in their own website. But with just one theatre, people like me cannot afford our own website and an IT dept to maintain it. So, we need third party companies like Ticketnew Or Bookmyshow to get us bookings. They are spending their money to get us bookings, so it is fair that they charge a convenience fee for these tickets for the service they provide. How can we change this model? Can we go back and only insist on counter bookings to keep a theatre running? No one takes a chance like that anymore.
Even otherwise, when producers fail to release their films on time, especially on Fridays, because of some last-minute disputes, it is these companies that make it easier for us to return the ticket money to those who have already booked. There is a gateway charge involved in every transaction, but the producers don’t even have to bother about such a thing when a film gets delayed at the last minute because of their fault. This is the same with food and beverage as well. If a show gets cancelled or a movie doesn’t release on time, everything we’ve ordered becomes a waste. In Chennai, you buy a dosa at Adyar Ananda Bhavan for Rs 60 or you can buy it in a five star restaurant for Rs 500, but it’s the customer’s choice to buy it. Sathyam’s popcorn is the best and it is also expensive but are customers complaining? They are buying it, right? So, I don’t understand how producers can make such demands from theatre owners, even when the Government doesn’t.
Like I said, my intention is to not shut down my theatre. We will bounce back, and if films like Master, Valimai, Annathe and RRR succeed, we will be back to normal. But we need a vaccine before that because social distancing is not practical in our country. People come to theatres for a celebration with friends and fellow fans. Social distancing is more practical in places where there is only 10 to 15 per cent occupancy. We should work together to make things better, not fight. But if things go on like this, I too will be forced to close our doors for good.
Silver Screens Murali, Owner of Balamurugan Theatre in Karur
Murali’s issues are very different. After closing down his theatre with the aim of renovating it to regain full glory, things have come to a point where nothing more can be done. Like Rakesh, he too has considered many options, but to run it as a theatre again is not one among them. He says…
“My plan was to renovate it and turn it into a multiplex to future-proof it. We shut it down for a couple of years and planned to slowly rebuild it. Somewhere along the way, we realised how difficult it would be to keep it running. Firstly, companies like UFO and Qube should reduce rates for smaller movies. When the outright purchase model stopped, even distributors started taking away a huge share from us. For the film of a big star, they decided the rates, most of which would be too expensive for us. Even distributors have suffered huge losses during these times, because of the costs involved. So, things were difficult anyway but even more so after COVID-19.
Now, even if they suggest social distancing, it will become even more impractical for small theatres to function. Our costs are anyway high and ticket prices are capped. So, if occupancy is only 40 per cent, there is no point in keeping it open. For a small theatre in a C centre, this won’t even recover the AC charges for a show. And why will a lot of people watch a movie in a theatre paying full price if the AC is not on?
My theatre is on a land area of 60 cents and many companies have approached me asking for the space, but I didn’t give it because I always dreamt of reopening it. It’s our family theatre and we have a lot of memories and emotions associated with it. It’s not easy for us to just break it down and build something else there.
Natarajan, Owner of Agastya Theatre, Chennai
One day, Chennai residents woke up to news of the permanent closure of Tondiarpet’s Agastya Theatre, another vintage that perished under the might of the pandemic. It’s owner Natarajan says the end was anyway coming, but Covid sped the process.
“We have been incurring losses for three to four years. Because our theatre was 70MM, the height of the structure made it difficult for us to convert it into an AC hall. All other theatres near us opted for AC, and the audience wanted that. We used to play 35 MM films but they would look grander on our screen. But, we suffered because we did not have AC.
During the switch to digital, distributors wanted to screen the film in as many theatres for quick realisation, so a lot of older theatres got left behind. Even the kind of movies being made started changing, and we stopped getting family dramas that used to bring families into the theatre. Women stopped coming to our theatre since television serials took up prime time; they made an exception for the rare family drama. These are all reasons for the gradual erosion. Add GST, taxes and overall higher costs and it took a toll on our business.
We were thinking of shutting down, but kept it open for two to three years, because we had a permanent staff of around 15 people, who were aged and would not find jobs elsewhere. We kept it open so their salaries would get paid. We stopped night shows and brought it down to just matinee and evening shows. In March, we shut it down temporarily, but the staff used to come in to maintain the premises because they were still getting paid. We had to pay from our pocket, because there was zero income. But with no signs of improvement in the COVID situation, we decided that August 31 would be our last day. We told our staff two months in advance that we would have to let them go. This is a labour-oriented business with a lot of maintenance charges, so we couldn’t afford it anymore.
In the present climate, nobody in the business knows the future. In my experience, the cost of production will have to come down. Films will have to be of high quality to work in theatres and, overall, everyone should be mindful of expenses.
As for the land on which Agasthya stands, we will have to wait. The property is valuable and the Government had taken up some land in the front for Metro work. At the moment, the road in front is closed too because of this, and we can think of developing the land or selling it once the work is complete and prices go up.
But, I don’t see this happening with other theatres. A lot of them might have been operating on borrowed capital or may have mortgaged their land for renovation. If they have to repay their loans with no income, they will be in deep trouble. Even malls will face similar trouble, because online markets will take over retail shops. So it’s very risky for most businesses.
At first, it looked like things would get back to normal by Deepavali. But now, it could be Christmas or even Pongal by the time we have a proper movie release. Things will get better only when the disease is eradicated. Entertainment is secondary when there is so much fear in the minds of people.