Kollywood’s 48-day-long strike has finally ended. So for the first time in over a month-and-a-half, Tamil films will release on Friday, ending what has been the longest period without a Tamil release.

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But even as film buffs get set to catch Prabhu Deva starrer, Mercury, the question remains: Has Kollywood really emerged out of the woods?

On March 1, the Tamil Film Producers’ Council (TFPC) decided to shut shop as a means of protest against digital cinema distributors charging Virtual Print Fees (VPF) of Rs 27,500 per film, per screen for a full run.

Later that month, the latter agreed to cut this fee to Rs 21,500, which did not placate the council. On Tuesday (April 17), the TFPC announced that VPF been reduced to just Rs 10,000 for E-Cinema screens.

A tweet from TPFC member and film producer Dhananjayan Govind announced that henceforth producers would oversee mastering of films, themselves.

While this might seem to have brought curtains down on what has been a 50-day-long drought in a film-crazy state, industry observers say the slashing of virtual print fees may not actually hurt digital film distributors.

The lowered prices, after all, only apply to E-Cinema screens and most cinema exhibitors have already begun making the move to 2K formats which don't fall under the purview of the agreement.

"They've kept their golden goose going - 2K and D-cinema - which have not been touched,” said trade analyst Sreedhar Pillai to CNBCTV18.com, “That will keep them (digital film distributors) going, because more cinema screens across India are converting to 2K and Atmos, than ever before."

As on date, Tamil Nadu has 1,100 screens, 440 of which are 2K screens. Analysts say that number could hit 550 by the end of 2018. “With such a rapid pace of conversion, slashing VPF rates for only E-Cinema screens and not 2K screens will not hurt digital distributors,” said Pillai.

So that begs the question: Why make such a bargain? Sources close to the development have told CNBCTV18.com that one big reason for both parties to end the stalemate was to avoid big-budget films like Rajinikanth's Kaala and Kamal Haasan's Viswaroopam 2 being put on hold.

Another reason could be to provide relief to Rs 440 crore riding on 11 Tamil films stuck in the logjam, awaiting release. Kaala and Viswaroopam 2 alone analysts say, account for Rs 300 crore of these budgets.

Then there’s the scourge of theatre occupancy rates plummeting. "Occupancy had dropped to 20% in some small towns, when the strike was at its worst,” said Abirami Ramanathan, President, Tamil Nadu Theatre Owners’ Association. Ramanathan also points out that an estimated Rs 200 crore has been lost during the 48-day logjam.

But the bone of contention may have only been swept under the rug for now. In a statement to CNBCTV18.com, Senthil Kumar, Co-Founder of digital cinema distributor Qube (which controls 80% of Tamil Nadu's screens) has clarified that the new arrangement is merely ad-hoc.

"We have agreed to their (producers) demand for VPF at Rs 10,000 for a full run as well as Rs 250 for a show,” the statement says, “This pricing structure will be tried for six months, and before that time ends, we will either make this permanent or tell them that it does not work and revise charges.”

First Published:Apr 19, 2018 7:47 PM IST