India’s leading multiplex chain, PVR INOX, is under scrutiny from the Competition Commission of India (CCI) for allegedly abusing its dominant market position by continuing to levy Virtual Print Fees (VPF) on film producers, even after the industry fully transitioned to digital projection years ago. The CCI’s September 30, 2025, order directs its Director General (DG) to investigate the matter and submit a report within 90 days, following a complaint by the Film and Television Producers’ Guild of India Ltd. This development comes amid recent controversies, including the temporary halt of advance bookings for the film Jolly LLB 3 due to VFX-related disputes with PVR INOX.
For filmmakers, cinema exhibitors, and investors in India’s $2,500 crore multiplex industry—where PVR INOX commands nearly 30% market share—this probe highlights ongoing tensions between producers and exhibitors over fee structures and revenue sharing. The guild alleges discriminatory practices that disproportionately burden smaller filmmakers, potentially violating Sections 3 and 4 of the Competition Act. As the investigation unfolds, it could reshape pricing norms and impact box office dynamics. Let’s break down the allegations, CCI’s rationale, and potential outcomes.
The Allegations: Unfair VPF Charges Post-Digital Era
The Virtual Print Fee (VPF) was introduced in the early 2000s to subsidize the costly shift from analog film reels to digital cinema equipment, with exhibitors like PVR INOX collecting fees from producers and sharing with digital cinema service providers (DCSPs) such as UFO Moviez and Qube Cinema. However, the guild contends that with the digital transition complete since around 2015-2017, these fees—now amounting to significant sums—have outlived their purpose and constitute an unfair trade practice.
Key complaints:
- Discriminatory Application: Nearly 70% of Hollywood releases are exempt from VPF, while Indian producers, especially independents, bear the full brunt, leading to unequal bargaining power.
- Abuse of Dominance: PVR INOX, with over 1,700 screens and 30% of national box office revenue, imposes these fees without commensurate services, violating Section 4(2)(a) of the Competition Act (unfair conditions).
- Anti-Competitive Agreements: Alleged collusion with DCSPs like UFO and Qube, though CCI closed this angle citing a 2020 order.
The guild’s 33-page petition argues that VPF burdens smaller filmmakers, stifling creativity and market entry, and calls for immediate cessation.
CCI’s Order: Prima Facie Case, 90-Day Probe
In a detailed order, CCI found a “prima facie case of contravention” under Section 4, directing the DG to probe PVR INOX’s practices, including the role of responsible officers under Section 48. The commission noted PVR INOX’s “dominant position” in the multiplex exhibition market but clarified its observations are not final findings.
Investigation scope:
- Timeline: DG report due within 90 days (by December 29, 2025).
- Focus Areas: Fee justification post-digital shift, discriminatory exemptions, and impact on producers.
- Closed Aspects: UFO and Qube cleared under Section 26(2A), as prior issues were resolved in 2020.
This echoes CCI’s 2020 scrutiny of the PVR-INOX merger, which was approved but flagged competition concerns.
Industry Context: Multiplex Revenue Models Under Fire
India’s multiplex sector, valued at ₹2,500 crore in FY25, relies on a revenue-sharing model: Producers pay VPF (₹1-2 lakh per screen for blockbusters), exhibitors take 50% of box office (50:50 for Hindi films). With 90% occupancy for hits like Jolly LLB 3, fees add up—₹10-20 crore per release for PVR INOX.
Broader tensions:
- Producer-Exhibitor Divide: Guild demands VPF abolition; exhibitors cite infrastructure costs.
- Market Dynamics: PVR INOX’s Q1 FY26 loss narrowed to ₹54 crore (from ₹1,790 crore YoY), but FY25 PAT was ₹128 crore amid 17% revenue growth to ₹1,949 crore.
- Regulatory Precedents: CCI’s 2020 order fined Google ₹936 crore for anti-competitive practices; similar scrutiny here could lead to penalties.
Implications: Potential Reforms and Market Shifts
For producers, a favorable probe could eliminate VPF, saving ₹500-1,000 crore annually and leveling the field for indies. Exhibitors like PVR INOX face revenue risks (VPF contributes 5-10%), potentially hiking ticket prices. Investors watch closely—PVR INOX’s stock dipped 2% post-order, but long-term growth (20% CAGR) remains intact.
Broader effects:
- Sector Growth: Could spur digital investments, boosting efficiency in a ₹10,000 crore flexible workspace-adjacent market.
- Legal Ramifications: DG findings may lead to fines (up to 10% turnover) or structural remedies.
- Timeline: Report by December 2025; final order in Q1 2026.
As the probe progresses, it could catalyze fairer revenue models in Bollywood’s exhibition ecosystem.
Conclusion: CCI’s PVR INOX Probe – A Spotlight on Fair Play
The CCI’s investigation into PVR INOX for fair trade breach via VPF addresses long-standing producer grievances, with a 90-day DG report to scrutinize dominance and discrimination. In a sector blending hits and hitsches, this could end outdated fees, fostering equity for filmmakers big and small. As Jolly LLB 3 controversies simmer, the outcome will shape multiplex economics. ET
