PEMRA’s Policy Bias is Hurting Pakistani Cinemas

In a turn of events that has left the Pakistan entertainment industry reeling, Mandviwalla Entertainment announced that it will close Atrium Cinemas till further notice. As one of the top entertainment destinations, the closure comes roughly five years after the Ministry of Information & Broadcasting (MoIB) banned Indian movies from local cinemas. Representing over half of revenues, the ban hurt all plans to add more screens across the country. “In 2018 we did about 225 films in the whole year,” said Nadeem Mandviwala, CEO of Mandviwalla Entertainment. “100 were American, 100 were Indian and 20-25 were Pakistani films. In 2019, you banned 100 films suddenly, that’s 50% of your content, your raw material. It is like asking a factory: I’m banning your 50% raw material, but you [have to] survive. How will it survive? It cannot. There are only two ways to save Pakistani cinema: either make 100 films or import 100 films.” Cinemas owners were hurt once more due to the COVID-19 lockdowns, which forced all public spaces to close down for over 18 months. This impacted the shop-rent revenue and cinema revenues of large malls and entertainment hubs. Since reopening in 2022, cinemas have continued to struggle, due to the backlog created by COVID-19 impacting movie productions in Pakistan and foreign markets. “There were 23 Pakistani movies released in 2022, with the top ten movies earning around $20 million, of which 70% came for The Legend of Maula Jatt,” said Muhammad Ali Rehman, co-founder of Hefazat Technologies. “Of the 18 Pakistani movies released in 2023, the top four earned just over $2 million, with industry insiders sharing the cinemas relied on Hollywood movies to make up the difference. These included global hits such as Barbie, Oppenheimer, and productions from Marvel Cinematic Universe.” He added that in 2024, only 10 Pakistani movies are slated to be released, of which the top six have thus far earned under $2 million. The ban on Indian films, coupled with the gradual reduction of both the quality and quantity of Pakistani movies has created the current scenario, where not only are cinemas closing down, but there are no plans for more cinema screens. This means that Mano Studios’ debut animated film The Glassworker, with distribution backing from Mandviwalla Entertainment, will likely struggle in the Pakistan market. As the first hand-drawn animated film in South Asia, The Glassworker needs international and local distribution, on both cinema screens and on streaming apps. The local streaming market consists of MBC-backed Tapmad, Jazz-backed Tamasha, PTCL-backed Shoq, and Telenor-supported Vidly. According to a jointly filed petition by Mandviwala, all of these streaming apps – including internet services providers (ISPs) and cable companies – are allegedly in violation of the Motion Pictures Ordinance 1979. The petition challenges the exhibition of local and foreign films by TV channels on cable networks and the Internet. Under the Motion Pictures Ordinance 1979, all films broadcast on the distribution networks under regulations of the Pakistan Media Regulatory Authority (PEMRA) are required to be approved by the Central Board of Film Censors. While distributors and public exhibition cinema houses are subject to rigorous requirements of licensing and certifications, these standards appear inapplicable to cable licensees or internet-enabled platforms. Without enforcement of the Motion Pictures Ordinance 1979 by PEMRA against internet-enabled platforms, Pakistani movies like The Glassworker are at risk of being the victims of digital piracy from streaming apps that distribute content banned for cinema companies. “Jazz’s Tamasha also has Indian content,” said Mandviwalla. “The point is you don’t have one policy. You are only making policies for the cinema. All other platforms where Indian cinema can be accessed, are not stopping it. This is not from today, this bias has been there for a long time. It is because if you look back, there were no formats except cinemas so all the laws were made for cinemas only when new formats came after advancements, you never made a law for them.” This is worsened by ISPs providing access to digital piracy sites where new foreign movies and pirated software are illegally accessible. This means that the only way for cinema operators to survive is to launch their own over-the-top (OTT) streaming app which runs pirated Hollywood and Bollywood content, monetized with either an advertiser-funded or subscriber-funded model. Fortunately for the streaming companies that are openly committing digital piracy, the OTT framework from the Pakistan Telecom Authority (PTA) doesn’t even acknowledge the digital piracy epidemic perpetuated by ISPs and telecom companies. “Cinema owners on the other hand pay taxes, are local, and create job opportunities for people from different fields,” said Mandviwalla. “Cinemas are locally registered which also helps the revenue of the country as they pay taxes on all the revenue earned from their business. If the Bollywood ban is applied to cinemas, it should also be applied to OTT platforms, especially the ones that evade taxes and the ones that are pirating these movies.” With NBCUniversal and Sony Pictures both securing a local streaming distributor, it is time PEMRA introduce 21st century reforms and work with the PTA to crack down on digital piracy wherever it originates. Such reforms could stem the flow of revenue out of the country and create new revenue streams for the struggling government, ultimately supporting both the cinema industry and the broader economy.