Film producers,distributors formed nexus: CCI

Producers and distributors will be required to submit their response to the notices. After hearing them,the Competition Commission will decide the further course of action. When contacted,CCI chairman Dhanendra Kumar refused to comment.

The case of multiplexes versus producers-distributors was the first to be referred to the competition watchdog after the two sections were notified mid-May this year. The Multiplexes Association of India had moved the Competition Commission alleging that United Producers and Distributors Forum,Association of Motion Pictures and TV Program Producers and the Film and TV Producers Guild of India had formed a nexus and restricted the supply of content (films). They were dictating prices and not allowing multiplexes to sell tickets below a price set by them,the multiplex association had alleged.

The association had contended that blocking new releases had impacted business and ultimately the consumers,which was anti-competitive and cartel-like behaviour. There are over 850 multiplexes in India and generate about 60 per cent of the total revenues. The producers were pushing for a 50:50 revenue sharing model irrespective of the stars,budget and box office collections,against the 55:45 model in multiplexes’ favour then. Since multiplexes did not yield,producer-distributors stopped supplying content or films to them. This,sources in the industry said,resulted in losses to the tune of Rs 100 crore a month to both the sides.

According to the DG’s report,the sources said,producers and distributors have been found guilty of acting in “concert and collusion which affected the consumers at large as they could not watch movies due to this stand-off”. The stand-off also impacted the business as no new film was released in multiplexes across the country.

After hectic parleys,producers,distributors and multiplexes reached an agreement in June and announced that producers will get 50 per cent of the revenue in week one,45 per cent in week two,40 per cent in the third week and 30 per cent fourth week onwards. Distributors will also earn an additional 2 per cent if the film did well on box office.