CCI urges self regulation for film industry, wants end to bans and boycotts

Implementation of a box office monitoring system, sharing of promotion cost by multiplexes, phasing out the virtual print fee are among other suggestions made by antitrust watchdog

Implementation of a box office monitoring system, sharing of promotion cost by multiplexes, phasing out the virtual print fee are among suggestions made to film distribution chains by the Competition Commission of India in its latest market study.

On December 6, CCI had commissioned a market study on the film distribution chain in India to identify issues related to competition that can be resolved through self-corrective measures.

The antitrust watchdog has recommended adoption of box office monitoring systems to generate, record, and maintain ticketing logs and reports. The data collected by such a system should not be alterable by any stakeholder, CCI has said.

Raising the issue of lack of transparency in box office revenue collections, CCI said, “ Introduction of a standardised box office collection monitoring system would go a long way towards mitigating information asymmetries and possibly translating these into fair and reasonable terms for revenue sharing arrangements and mitigate disputes.”

Producers have been suggested to empanel independent auditors to check such monitoring systems and ensure that they are working properly and not being tampered with.

CCI found that multiplexes enjoy considerable bargaining power against film producers and distributors. “Respondents have indicated that deal terms are non-negotiable, and the lack of flexibility can make recoupment of investment in films untenable in certain instances,” the market study said.

CCI has also said that the virtual print fee (VPF) paid to multiplexes should be phased out. “Till the VPF sunset is decided and implemented, Digital Cinema Equipment providers and producers should negotiate on mutually acceptable VPF charges and ensure that there are no disruptions in the exhibition of films on account of VPF.”

VPF is a subsidy that producers and distributors pay to enable exhibitors to cover the cost of converting their analog projectors into digital ones.

The fair trade regulator said, “Associations must refrain from engaging in bans and boycotts and prohibiting industry from working with non-members.” It also said that associations must consider how alternate dispute resolution mechanisms, such as mediation can be institutionalised, to address any disagreement between stakeholders.

Eleven Bollywood producers and their associations, fourteen producers from the Tamil, Telugu, and Malayalam film industries, eleven OTT platforms, and six broadcasters and their associations took part in the study.