Tag: foreign exchange

NEW DELHI: Digitalization of cinema is vital in controlling the distribution and exhibition of cinema in digital format and safeguarding intellectual property since the Indian film industry faces almost 40 per cent revenue pilferage due to piracy, according to a Planning Commission study.

The sub-group on ‘Going Digital’ set up by the Planning Commission and headed by Rajeeva Ratna Shah, member secretary in the Planning Commission and a former CEO of Prasar Bharati,, said in its report that going digital would be incomplete if the entertainment (film) sector is not covered. Furthermore, safeguarding the intellectual property rights of the industry would encourage filmmaker to a great extent. The digital cinema system is already a reality in the country and would revolutionize the exhibition of films all over India.

Issues of piracy plague software industry the world over. In terms of money, the industry loses approximately Rs 20 billion on account of piracy directly, on which the government neither earns Entertainment Tax nor Income Tax. digital cinema would help curb piracy in a proactive manner as it will make the pirates business unviable by providing an early and widespread release of films across the country and thus nipping piracy in the bud. Furthermore, as there is no physical movement of the film, creation of pirated copies/versions of the film is ruled out.

The sub-group said the early availability of films combined with high quality images and scheduling flexibility ensure increased box office collections. Early migrants to the digital cinema system have witnessed around 100 per cent increase in revenue collections by way of increased box office collections and thus increased collection of Entertainment Tax and Income Tax.

It said film prints are made from film stock imported from companies like Kodak, Agfa etc. Going by an average of 800 films, 200 prints each at a cost of Rs.50,000 per print entails an expense of Rs 8 billion. As the prints cannot be recycled, it is a waste of money once it completes its life. However, digital cinema does not use any prints, hence minimizing wastage and at the same time saving the country precious foreign exchange.

With the advent of Digital Cinema, niche cinema and regional language films will be able to generate revenues, thus making the local film industry in the states more commercially viable. This will provide employment to local artistes and technicians and other film industry related infrastructural suppliers.

Analogue prints are made from polyester and are destroyed by burning which is a huge biohazard. Digital prints are digital files and can be simply erased from the server’s memory. The Power consumption of a digital projection system is far more economical as compared to the power consumption of an optical projection system. The annual power savings if digital cinema is implemented in around 200 theatres across the country works out to 87,48,000 KVA.

The print quality does not deteriorate with repeated use irrespective of the number of screenings. Small town cinemas plagued by piracy and failure of films coupled with availability of only old films have become economically unviable. However digital cinema will bring the small town cinemas at par to the cinema halls in the big cities as the films can be simultaneously released across the country. The advent of digital cinema has seen proliferation of new and compact cinema houses in small towns and cities.

But the Sub-group said the government should provide incentives for production as well as exhibition of films in the digital format in its own interest as the loss of revenue due to piracy is considerable. Production of cinema in digital format could be on lower tax regime and theatres that have installed digital cinema exhibition facilities can be subjected to lower entertainment tax.

Furthermore, there is need to amend the Cinematograph Act 1952 to incorporate digital cinema. digital rights management/IPR protection is of paramount importance in view of piracy. Many content owners would be apprehensive in sharing their content as piracy is a major issue. Hence, adequate laws to protect the rights of the content owners need to be put in place so that they feel safe to share their content over digital platforms.

As small and medium players would find it difficult to digitize their respective libraries in the light of huge conversion cost, content aggregators could be encouraged and a suitable regulatory/policy regime worked out to make this happen in a hassle free manner.