quate fundsbeing available in the MPEAA member companies' bank accounts in Motion Picture Export Colombo) because the NFC had not as yet recommended such remittance to the Association of America Exchange Controller.
Non payment of dues by the NFC re I The companies affiliated to the MPEAA tation of the films, as would be the case sulted in MPEAA members, in the first" comprise the world's largest film produc when films are purchased outright with instance, stopping further shipments and ers/distributors and account for over 80% valuable funds being tied up. release of their product on contracts al of the most successful English language ready approved. As no payments were i films distributed worldwide. The MPEAA MPEAA deals with exhibitors on the made even thereafter, MPEAA members member companies include Buena Vista basis of rental, with the supplier accept finally withdrew the exhibition rights given International (Disney), Carolco Pictures ing a percentage of the actual box office to NFC and informed the Corporation Incorporation, Columbia Pictures Inter takings. This way, the supplier's share is accordingly. But the NFC, though it has national (Tri Star), MGM/UA Communi governed only by how well a film fares at loudly proclaimed its ability to source all cations Company, Orion Pictures Inter the box office here and not by the selling its requirements of English language films national Corporation, Paramount Pictures price of the film itself. In Sri Lanka, the through independent suppliers or 'third Corporation, Twentieth Century Fox Inter market size for English language films parties' in the absence of MPEAA films, national Corporation, Universal Interna automatically commends rental as the still continues to this day to distribute tional Films and Warner Brothers Inter obviously viable choice. MPEAA films in blatant violation of con national. Appendix IV of this review lists tractual obligations. box office hits for 1988 and 1989, from The Kinematograph Renters Society which it will be observed that MPEAA (KRS) is one of many regional offices of The NFC, if it is to continue its good products virtually sweep the board. MPEAA members, and both the MPEAA working relationship with members of the and KRS member companies have their MPEAA, should respond positively to The policy of the MPEAA precludes it registered offices in the United States of wards removing the factors which led to from operating in territories where mem America. Regional offices have been the directive by MPEAA for withdrawal of ber companies are prevented from nego established in many parts of the world their product from circulation, by: tiating direct with Exhibitors of its choice. depending on the market size. The films contracted for are despatched direct from * recommending the remittance of earn As a result of this when in 1974 the NFC America, Europe or the Far East, a few of ings from April 1988 to date. exercised a monopoly status on the import them being merely transhipped (un of films in keeping with the then Govern opened and unused) via Bombay to take * arranging for the settlement of dues to ment's policy of restricting imports, films advantage of the reduced freight costs on .MPEAA member companies on out distributed by the Companies affiliated to bulk shipment, particularly when several station screenings within a specific time the MPEAA were not exhibited in Sri other copies of the same films are also frame which will result in the quantum . Lanka. In 1978 the position was reviewed consigned to India. It is accepted busi due declining and not increasing. by the Govenment and a mutually satis ness practice world wide for business to factory arrangement reached (within the be negotiated via foreign firm's local of * arranging for the settlement of out provisions of the NFC Act) enabling the fice or, in the absence of one, via the standing instalments on long term loans exhibition of MPEAA sourced films in Sri closest regional office. It need hardly be and ensuring that balance instalments Lanka in terms of the Government's open stressed that the volume and value of are settled in accordance with loan agree economy policy. business generated in Sri Lanka can ments. neither prompt nor justify setting up of an In 1979 the member companies of the MPEAA office here to service Sri Lanka * discussing and agreeing on a basis of MPEAA resumed the, supply of films, with alone. sharing the special levy referred to in ; 75 quality English language films repre- section 9 of this review. •' senting a cross section of the best films The total annual earnings of the MPEAA , ircluding Academy Award Winners. Each member companies for 1988 in respect The NFC clearly refuses :o learn from ; MPEAA member was allowed to deal of Colombo and outstation screenings experience; its dealings so far with "third with an exhibitor of their choice. was only just over Rs. 6M and the total party" suppliers have resulted more often due to them from the NFC (and yet out than not in the NFC being saddled with [ The 75 films shipped to Sri Lanka were standing) is in the region of Rs. 12M. The not only third rate but also badly dam • on the basis of freight paid by the foreign MPEAA member companies have not aged prints of films for some of which, it : supplier, who also absorbed the cost of only expressed concern with regard to now appears the "third parties" involved publicity. The major advantage, finan the outstandings from the NFC but also were merely pretending to hold copy cially, was that there was no foreign with regard to the non remittance of their right. The NFC, being a State-owned exchange payment at the time of impor- earnings since April 1988 (despite ade institution, has the respons bility to en- _ , i_
12 Economic Review May/June 1991