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Informist, Wednesday, Oct. 1, 2025

 

NEW DELHI – The Competition Commission of India has ordered its director general to probe PVR INOX Ltd. for its anti-competitive conduct in charging virtual print fees from Indian film producers. A virtual print fee is a charge paid by film producers or distributors to multiplexes to offset the costs of digital cinema technology, which replaces the expensive physical process of producing and shipping film prints.

 

The commission was hearing the Film and Television Producers' Guild of India Ltd. which had alleged violation of the competition law by PVR INOX for continuing to charge virtual print fees from Indian producers even after the same had been discontinued for Hollywood producers in India for English films. PVR INOX has discriminated against Indian producers by agreeing to sign sunset clauses with only Yash Raj Films Pvt. Ltd. and Viacom18 Media Pvt. Ltd. while refusing to enter such clauses with other producers, the guild said. These sunset clauses were signed to put an end to virtual print fees. The commission has ordered a probe into all these allegations.

 

The antitrust watchdog noted that PVR INOX charged a virtual print fee for 30% of all the movies released by Hollywood producers and the remaining 70% Hollywood producers were not charged. "Accordingly, the Commission is of the view that the alleged discriminatory conduct of OP-3 (PVR INOX) is prima facie in violation of the provisions of Section 4(2)(a) of the (Competition) Act and needs to be investigated by the director general," said the watchdog.

 

Further, the Film and Television Producers' Guild has alleged anti-competitive conduct by PVR INOX by limiting and restricting the ability of small and medium size producers in producing and exhibiting films as widely as possible due to the continued charging of virtual print fees. The director general is directed to investigate, based on more detailed and granular information with respect to exhibition of movies in multiplex cinema halls of PVR INOX, the regulator said.

 

Earlier, once a film was shot, the physical prints had to be transported to different cinema halls. For distributors, the cost of physically transporting a print from one location to another was significant. During the 2000s, there was a global shift to digital and digitisation of the Indian cinema halls started in 2005. By the end of 2014, 100% of the Indian cinema screens were digitised.

 

Initially, there were concerns by the cinema hall owners and exhibitors regarding the necessity of transitioning from celluloid to a digital medium, the latter being capital-intensive compared to analogue projectors. The cost of digital cinema equipment ranges between INR 3 million to INR 5 million, which proved to be a substantial economic burden on cinema halls.

 

To mitigate the cost of digital cinema equipment, the virtual print fee originated in the US in 2005. Around 2007, producers and digital cinema equipment providers in India started to follow the same model as the US and charge virtual print fees to incentivise the adoption of digital projectors. Virtual print fee was charged by digital cinema equipment providers to be paid by producers at the rate of INR 500-INR 600 per film per screen and per show, capped at INR 20,000-INR 27,500 per film per screen for multiple/unlimited number of shows. Virtual print fee was understood to be transitory and not permanent in nature, but it continued to be charged in India by PVR INOX, said the guild.

 

At 1120 IST, shares of PVR INOX were at INR 1,085.60 on the National Stock Exchange, up 1% from the previous close.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Nishant Maher

 

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