By Visakh Ranjith, Student of National Law University Bangalore and Intern at Centre for Public Policy Research
The Malayalam film industry is smaller than its Tamil and Telugu counterparts. However, the industry is unique in the sense that Malayalam films are based on more artistic values. Not all films are made for commercial value; aesthetic and cultural values are also given due importance. This can be seen from the fact that Malayalam films have won numerous national awards. The industry has also contributed excellent technicians to the Hindi film industry and some of its directors are highly reputed for their skills. On an average, the Malayalam film industry produces around 70 -90 films per year. However, similar to Tamil and Telugu segments, many films are not released in the theatrical market owing to lack of market interest and a large percentage of films released fail to perform. The number of Malayalam films released from 2004 to 2008 has been declined from 69 in 2004 to 63 in 2008. The time taken to make a film depends on several factors – the budget of the film and its production values, the theme of the film, the availability of actors, the quantum of computer graphics usage, etc. In comparison to the Tamil and Telugu segments, the Malayalam industry is largely disciplined and completes films in a shorter time period with smaller budgets. The time taken to make a film varies from 90 days to 150 days, while the period of shooting is typically 45 to 50 days. The total revenue of the Malayalam film industry segment is estimated to be around INR 1.4 billion (Financial Year 2009), in terms of total revenue generated by films. This revenue is shared between the key players in the industry, namely the producers, distributors and exhibitors.
Last year, though, saw a marked change in trend. Superstar films failed to attract crowds and movies with new themes and small budgets reaped success. 95 films released including 6 movies dubbed from other languages. Total collections was just 120 crore and the loss to the industry is around 300 crore. This 120 crore is not just from net collections but mainly from the satellite rights which is the major source of revenue. Most of it came from around 15 to 20 movies while the rest did not manage to make a mark. Salt n Pepper and Seniors were super hits and Traffic, Makeup man, Rathinirvedam, Christian brothers and China town were hits. Seniors distribution share was 4.2 crores. Salt n Pepper got 3.5 crore and its production cost including press and publicity was 2.5 crores. Traffic earned more than 4 crore from theatre collection and satellite rights. Its production cost was 2.75 crores. Rathinirvedam became one of the biggest earners of the year by earning a distributor’s share of 2.5 crore and satellite rights of 1.75 crore. The movie was made at a relatively low budget of 1.4 crore.
The change that the industry has undergone is not restricted to the quality and quantity of movies. The structure of the industry has also been changing for the past few years with associations and unions coming into play. Now, every stakeholder in the industry has an association/union to represent them. Associations/unions like Kerala Film Producers' Association, Kerala Film Distributors Association, Kerala Cine Exhibitors Federation, Kerala Film Exhibitors Association, Kerala Film Chamber of Commerce, Film Employees Federation of Kerala (FEFKA), Malayalam Cine Technicians Association (MACTA) and Association of Malayalam Movie Artistes (AMMA) have attained prime importance in the Malayalam film industry to the extent that being a member in these associations/unions has become necessary to be involved in any process of film-making in the industry. To understand the influence of these associations/unions better, it is necessary to look at how they were formed and what their duties and functions are.
The evolution of the association culture
The association/union movement in the film industry started at the national level with the formation of AIFEC which represented all the film workers in the country. From there, each language industry started forming unions/associations for themselves. These unions/associations started gaining power with time but the Malayalam industry still was not involved in this revolution. But the Film Chamber of Commerce was formed comprising of the producers, distributors and exhibitors as a trade body which was the first association in Malayalam. There was a parallel movement to make a fraternity of sorts and hence was formed the Malayala Chalachitra Parishad which was a group for everyone involved in the industry. Another association which was formed later on was MALCA which was not functional for long. 
The real union movement in Malayalam started with the formation of MACTA as a cultural welfare forum for the technicians in the industry. The successful functioning of the Film Chamber had inspired technicians to form an association for themselves and hence MACTA was formed. It started out as a welfare organisation with a strong foundation of brotherhood for the betterment of members, to conduct workshops and to STOP strikes and initiate negotiations. AMMA was also formed with the same ideals and aims around the same time.
This system was set up with certain aims and goals to discuss not just rights but responsibilities too. But with time and change in leadership, problems started. Banning people from working led to negative feelings creeping in. Technicians started facing problems representing their interests to the film chamber. Also, people who work in both Malayalam and other industries had to take multiple memberships as MACTA was not affiliated to other unions/associations because it was not technically a trade union. And so, to increase the negotiating power of technicians, a decision was taken to form a trade union and hence, FEFKA was formed. The advent of a trade union was dreaded by producers and other players and they took an antagonistic stance. In this process, a lot of hatred and negativity came in among different stakeholders. In place of the feeling of fraternity that led to the formation of these associations/unions, antagonism came to define the new face of unionism. It needs to be seen whether these association/unions formed for the betterment of the industry have actually helped the industry or led to make the situation worse.
Kerala Film Chamber of Commerce
The Kerala Film Chamber of Commerce is a society comprising of the Producers, Distributors and Exhibitors in the Malayalam Film Industry. The main role of the Chamber is to lobby with the government for laws/rules favourable to the industry are enacted. Laws regarding taxes are the main concern. Their major achievement in this area is that they brought down the entertainment tax which was as high as 48% to 25% in the past years. The Chamber’s governing council consists of 43 members. The Chamber comes into play in the movie-making process for title registration and for getting three certificates that are necessary to obtain the Censor Board certification. The three certificates are: Title registration certificate, Publicity clearance certificate and Membership certificate. It is to be noted that membership of the Chamber is necessary for the Producer to obtain these certificates and hence, to obtain the Censor Board certification. For a producer to get membership in the Film Chamber, he has to produce letters from all the main technicians and artistes of the movie he plans to make stating that they have made an agreement with this producer to participate in the making of the said movie. These letters have to be produced before the Executive Committee of the Chamber with the recommendation letters from two Executive Committee members following which, the application for membership will be kept pending till the producer produces the Censor certificate for the film. When this is produced, the membership is granted. This is to make sure that only people who are genuinely interested in making movies will come forward and apply for a membership. The Film Chamber deals with only the Business aspect of the industry and is separate from the artistes’ unions and associations. Multiplexes have not taken membership in the Chamber.
MACTA or Malayalam Cine Technicians Association is a welfare association of technicians working in the Malayalam film industry. It was formed under the Literary and Scientific Societies Act. Its functions included settling disputes regarding remuneration, issuing work permit etc.. But now these functions are carried out by FEFKA. MACTA is now just a welfare association which conducts short-term scriptwriting workshops/courses the talented students of which are given opportunities in movies that members make, provides help to members who are in need of it etc.
MACTA has around 1500 members. MACTA and FEFKA have different functions and exist as separate entities. There are common members. Membership is of three types. Life Membership which is Honorary, Active membership which is for the people who are active in the field now and has a small per annum membership fee and Associate Membership which is for the people who work as assistants and associates under the main technicians.
FEFKA or Film Employees Federation of Kerala is a union of film technicians formed under the Trade Unions Act. It is a self-regulatory body which has 16 separate unions for different technicians under it. In the directors’ union alone, there are around 600 members (including assistant directors). FEFKA was formed in 2008 when there was consensus that a trade union needed to be formed. In 2011, FEFKA got affiliated to AIFEC (All India Film Employees Confederation).
Membership in FEFKA is necessary to work as a technician in the Malayalam film industry. For a newcomer director, first, a work permit has to be applied for from FEFKA. This work permit lets him start production. But only after he completes two movies, he is given complete membership. The newcomer Director also has to donate a certain amount to FEFKA for his membership. This amount is lowered depending on the needs of the director and is decided by the executive committee. An interview process is also in place to determine the person’s capability and credentials. FEFKA is also involved in settling disputes between technicians and other people in the industry. It also gives financial help to members who are in need of it.
AMMA was formed with to find out the issues concerning the Artistes, to analyse them and to find out possible remedies. Besides protecting the financial status of the members, AMMA also promotes and develops better relations between its members and other associations. Promotion and development of healthy relationships with associations of the similar spirit, is also feature among the objectives of AMMA. Helping the weaker section of the public, by introducing scholarships for educational purposes, housing schemes etc. also tops the list of priorities of the association by extending financial assistance at the time of natural calamities.
AMMA also trains and develop the arts of action, dance, music, drama or other arts in the cine field or any other art by establishing colleges or institutes and to pay scholarships, prizes, merit certificates and honouring the scholars. AMMA publishes journals and magazines for developing Art, Culture and General Knowledge and thus contribute to the overall development of the artistes. AMMA consider it their privilege and professional obligation to the growing cine industry of Malayalam to conduct dramas, star-nights, dance and music performances and group discussions to boost up the artistic spirit and aspirations of the artists participating in it. To protect the members from unemployment and to help the qualified and needy members with financial help come under AMMA’s objectives.
The organizational hierarchy of AMMA makes a clear cut division of duties and responsibilities- President, Vice-Presidents, Secretary, General Secretary, Treasurer, Executive Committee. AMMA also maintains a library and conduct study circles, workshops, etc. and arrange lectures for the benefit of the members. To act as arbitrators in all disputes that may be submitted to them for arbitration by the members and others in film field industry gives AMMA a unique status as a body with much dignity and powers. It also collects and furnishes statistics regarding the various phases of the Malayalam film industry.
The role of the state
The oppressive taxation and indifferent attitude of the government indicates that it sees the film industry as a source of financial benefits. They have failed to recognize that the industry is in trouble and that theatre houses are disappearing. The huge amounts of loss suffered by different players, means that government involvement in the form of some sort of concession is required to keep the industry alive. The governments in other states have been taking steps towards this.
A major issue in which the state has been inconsiderate is in the case of the cine workers welfare fund. This fund has not yet been separated from the beedi workers welfare fund for which a G.O. is required. According to the Cine Workers Welfare Cess Act, 1981 and the Cine Workers Welfare Fund Act 1981, an amount has to be deposited to this fund from each movie’s budget and so, a large amount of money has been deposited till now. But since there is no awareness regarding the existence of such a fund and how to make use of it, most of the fund goes unused. The head office for the fund in Kerala is in Kannur because of the large number of beedi workers in Kannur. This shows that the state has failed to recognize the needs of the film industry. There have been continuous requests from various associations for the separation of the two funds and to set up a head office in either Trivandrum or Kochi. Yet there has been no step taken towards this. The provisions of the fund, if used could alleviate a lot of the problems faced by cine workers now. The fund provides for many facilities like medicine, education etc. All this is largely unused by Malayalam cine workers.
The Malayalam film industry is suffering. But to suggest that there is no hope or that there is no solution to this suffering would be wrong. Profitability is still low for Malayalam films only because the resources that are available are not being exploited. What we have seen around the world in the case of the film business is that as the industry expands, revenue sources shift to those other than theatre collections. Be it home video, satellite or even internet, the avenues are many. Malayalam cinema is at that point in time where this diversification needs to happen. Producers are finding it hard to be committed to a business that involves such risk that it is possible that they might not even recover half the cost. The dependence on theatre revenue is reducing with satellite revenue becoming more important but there are many sources left to be explored. Tamil and Telugu film industries have developed a marketing strategy which makes their products appealing to the people of other states. According to a study, 25% of the revenue for Tamil and Telugu movies comes from other states. Exploitation of the international theatrical is another area where Tamil and Telugu movies have done well. Malayalam cinema needs to venture into these arenas, if it hopes to move forward.
In Hollywood, the practice of releasing low budget movies straight to DVD, known as Direct-to-video, is followed. This has led to the growth of independent films and also provides for large revenues for the production houses. Films which after production are shelved due to different reasons like unavailability of distributors and willing exhibitors, certification issues or other such problems, can be released direct-to-video and some amount of the costs can be recovered this way. This will also provide incentive for more new talent to come in as the restrictions on their entry are reduced and there is more creative freedom. Right now the system in Hollywood sees direct-to-video as a fall-back but in China, the same concept has gained wide acceptance as a niche product. “Original Video”, as it is known in China, is not associated with low production values and poor storylines that the DTV movies of Hollywood are and has gained respect from the public for the content and from the film-makers for the creative freedom that it allows.
A film-maker who wants to make a film in Malayalam presently has two options – to go through the system which involves getting memberships in the appropriate unions/associations and going by their rules or to challenge these establishments and take the rough road. The associations and unions have set certain rules and regulations so that the industry has some sort of self-regulatory system. In some cases, we have seen that this system becomes too restrictive in nature and enforces their interests on the traders, artistes and technicians. In such a situation, since the system in place has a presence at every stage of the movie-making process, it becomes incredibly difficult to go against it. A producer, who decides he will not become a member of any association, might find it difficult to find a Distributor or Exhibitor. A person who chooses to challenge the system, in most cases, hence finds it extremely hard to fulfil his purpose. To brave the resistance of an entire industry is not an easy task. But to say that it is impossible to do that would be wrong as we recently saw Director Vinayan pull it off. But it is to be understood that the quality of the film will suffer when you do not have access to the great pool of talent of this industry. This means it is almost impossible to make the movie that you want to make without being part of the system. When such a restrictive system exists, the entry of new talent is blocked and the industry suffers a loss as this new talent will move on to find other avenues to express their ideas. This can be seen in the recent tendency of artistes and technicians to migrate to other language film industries in search of either higher pay or more creative freedom. So it must be understood by these associations and unions that if they muscle new talent out, it will come back to bite them as their success is not permanent in an ever-changing industry because at some point in the future, the audience will reject anything that is unoriginal.
To blame the associations and unions for this situation is not entirely correct. The system is not the cause of the problem, the misuse of it is. A feeling of insecurity among the leadership of these associations and unions seems to be at the core of this. This has to change for the industry to become more open. These associations and unions were formed with the aim of promoting Malayalam cinema. Today all those ideas have been lost and a new sense of authority has taken over at the helm of affairs. It has reached a point where they are concerned about only their rights and not their duties. For this to change, a joint effort from all sections of the industry must take place. The old ideals of fraternity and brotherhood must be reintegrated into the objectives of these associations and unions and understanding the needs of the industry, a system that works must be arrived at.
Whether a system is needed at all is a debate that needs to be looked at from all angles. On one side, there is the argument that creative expression should not be restricted or regulated. Arguments for the system would say that the people involved in a trade which involves such financial risk need protection. Dispute resolution is another area where the involvement of associations and unions has been justified. With a considerable section of the industry especially at the lower levels of employment benefitting from the protection that this system provides but the creative freedom of others being curtailed, it is hard to weigh one against the other. To do that would be to choose between cinema as a livelihood and cinema as a medium for artistic expression. To pick one would not be fair to the other and so, this debate will go on.
International film studios are producing and distributing regional movies. Of the top six international movie studios, four are involved in distributing or producing Indian movies. A number of Indian film studios and media and entertainment companies are acquiring international theater chains and production studios. Small-budget niche films with high-quality scripts have recently gained acceptability among mainstream audiences. Strong content and word-of-mouth marketing have helped studios to generate high returns from these films. Indian studios are realizing the importance of direct-to-consumer engagement through social media to generate positive word of mouth during the release of a film. Some are charging customers to participate in exclusive online chats between lead actors and audiences prior to a release. The way cinema is perceived is changing rapidly and in this wave of change, the Malayalam industry must not stay behind. By adopting techniques that are feasible for the industry’s dynamics, it should look to move on to new methods and ideas. There is no doubt that change is necessary. But it is essential that the change be a step forward.
 Supra note 14.
 Data released by Producers Association.
 Personal interview with Mr John Paul.
 Supra note 24.
 Personal interview with Kerala Film Chamber of Commerce staff.
 Supra note 27.
 Supra note 27.
 Personal interview with MACTA staff.
 Supra note 31.
 Personal interview with FEFKA staff.
 “Collective forum for the common good”, http://malayalamcinema.com/amma-history.htm, last visited on 29th February, 2012.
 Supra note 36.
 Supra note 24.
 Cine Workers Welfare Cess Act, 1981 and the Cine Workers Welfare Fund Act 1981.
 Supra note 24.