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BUDGET AND THE FILM INDUSTRY
Enkayaar, Bollywood Trade News Network
One of the major problems that the industry has been plagued with is the piracy menace, which is eating into the virtual foundation of the film industry. The day the film is released the pirated version of the film are found on the streets selling at pea-nuts of the cist price of a single and the CD sellers make a kill during the first two-three days. Therefore, the industry, through the forum of FICCI had demanded from the government that it be given the tax holidays for a definite period to promote digital transmission of films through out the country.
The government has partially agreed to the demand of the industry and it has been ordained in the financial document of the GOI that the film industry would be exempted from payment of service tax for those films which are delivered in a digitized format all across the country.
There is however a catch embedded in the provisions laid down by the government as it has clearly made it distinct that only those films which are delivered in the digitized format through the satellite links would be eligible for deductions but in those cases where the film is delivered in a storage optical device the incentive of waiver of Service tax would not be applicable. These provisions come into effect from 01 March 2007.
This however could turn out to be a blessing in disguise as the industry has prepared itself for adoption of this technology and about 2000 cinema halls all across the country have incorporated technology to switch over to receive the signals in a digitized format. In economic terms, if the producer and the distributor are able to save on the costing of raw stock of 2000 prints, they could channelise this saving and facilitate other cinema halls to switch over to receiving the films in a digitized format on the day the film is released in the major centres.
This conversion of technology either in a wireless or wired mode for the betterment of deliverance of the product would also be a definite step forward for the industry to be in sync with the demands of the times. Presently the industry suffers a revenue loss of around Rs. 2000 crore on an annual basis and if it is able to recoup even fifty percent of the same through adoption of technology, this could also mean increase in revenue for the government as well. While the menace of piracy cannot be eliminated by this step, it can be cut down to an extent, as the loss of the product during transmission would be cut down. May be then a day could come, when the digitized format on a mobile camera could not copy the film from the screen and then it would be a monumental day for the entertainment industry.
For the industry, this step on the part of the government is a refreshing change, and the industry should take it seriously and use this as a stepping-stone to incorporate more doses of change to protect the product. But for that to happen the DVD copying syndrome that the industry is getting plagued with also has to be dispensed with and fresh ideas would never be starved of audience, piracy or no piracy.