Private sector film industry cries foul over NFC distribution move

By Charumini de Silva

Disgruntled private sector film industry stakeholders yesterday claimed that the recent decision to take over the distribution of films to the National Film Corporation (NFC) was unfair, insisting it was contrary to the market liberalisation policy of the Government.

It was pointed that the decision was taken without considering the recommendations of the committee appointed by the President to uplift the local cinema industry.

“We are very disappointed with the decision taken by the Government. In the Presidential report, it was recommended to further liberalise the distributions, but somebody has given incorrect information to President and they have been instructed to take it back to the Corporation. Therefore, we are planning to meet President Sirisena and explain the plight of the industry,” Ceylon Entertainments Ltd. Managing Director Imthiaz J. Cader told the Daily FT.

According to Cader, the subject Minister has had two discussions with industry stakeholders, and at the end of the second meeting, a decision was taken without paying much heed to the industry stakeholders’ concerns.  

Cader said the Lanka United Films Exhibitors, Producers and Distributors Association will soon meet with the President to iron out matters in this growing industry, where stakeholders have heavily invested. 

“The film distributors, exhibitors, importers and producers are now planning to meet the President, without anybody else. I think Sri Lanka is the only country where the State interferes in the film industry. We need a regulator, not a competitor,” he added.

He also pointed that even the previous Government did not interfere with the operational system as it is today, and in fact they encouraged the local cinema industry with many tax incentives to refurbish, build new cinema halls with the latest technology, where the industry was allowed to import digital equipment and sound systems duty-free. 

Cader stressed that ad-hoc policy decisions of this nature would hamper the growth of industry, employment generation, and adaption of new technology.  

Noting that there are five circuits for film distribution, which includes State-run Rithma Circuit, Cader queried the rationale behind empowering the NFC to distribute films for the entire industry, creating a ‘monopoly’. 

Cader asserted that the NFC controlled film distribution from 1971 to 1977, but because the Corporation was not efficient, it was given over to the private sector.

In terms of the commissions charged by private distributors, he said that they followed the circular issued by the NFC. “Before the private distributors took over, the NFC was taking 10% right along. Even if a picture was re-run, they were charging 10%. We followed what the Cooperation did,” he pointed out.

He vehemently denied the fact that the distributors haven’t given sufficient airtime for locally produced films over foreign films. “There is not enough good local production of films to show in theatres. Around two to three films are produced locally per year. We are also producers of films, but we have invested heavily in new cinemas, and we can’t run them at a loss. When there are good films, anybody will screen them, there is no discrimination for locally and foreign produced,” he explained.

Cader also said that for all foreign films, they have to pay a levy of Rs. 3.10 from every single ticket sold to the NFC.

While admitting there were several cinemas that closed down in recent times, he claimed the causes were unrelated. “It is true that some of the cinema halls were closed down, but what caused it? It is important to consider the total number of seats in a cinema hall, with a reasonable occupancy in a period of time, to run a profitable business. If a theatre doesn’t have at least 35% to 40% occupancy, they must pull the film out. The NFC is dictating terms of which film is to be screened where, and for how long, without considering patrons’ occupancy in the cinemas. Thus, it was natural that some were closed down.”

In addition, he pointed that the industry stakeholders have to face severe competition from local television channels, internet streaming, the pirated video industry, as well as with paid TV.