Sri Lankan cinema has had a checkered history. It enjoyed its heyday in the 1970s under the multi-faceted film development initiatives of the State Film Corporation (SFC). Those measures led to record growth in annual cinema attendance, climbing from 30 million in 1972 to an astounding 74.4 million in 1979 – a quantum leap in audience attendance witnessed in a period of just seven years.

Such a box office achievement was considered unprecedented for the world film industry. Sri Lankans were flocking to cinemas in their millions and enjoying both art-house films and commercial money-spinners attracting capacity audiences.

A still from the first Sinhala film Kadawunu Poronduwa (Broken Promises) featuring Rukmani Devi and B.A.W. Jayamanna

In 1979, after Anton Wickremasinghe became the State Film Corporation’s chief executive officer, the collapse began. Under his management, the SFC permitted unrestricted production of films and unlimited credit to anyone who wanted to make films. The result was a glut of poor quality films. Over a period of five years, some 100 films were produced. Cinemas were under pressure to screen every SFC production. This steady stream of poor quality films naturally had a response from the public. Local audiences protested in the only way they could: they stopped going to the cinemas.

Embarrassed by the decline of the once prospering industry, and a fall in audience attendance from its peak of 74.4 million, J.R. Jayewardene, the then President and also Minister in Charge of Film, appointed a Presidential Committee of Inquiry in 1985. The committee concluded that the problem lay not with Anton Wickremasinghe but with television. That conclusion was flawed.

In 1979, the Independent Television Network (ITN) was broadcasting to homes within a mere 15 mile radius from ITN headquarters in Colombo. The total number of television sets in Colombo was 2,500.
The island-wide decline in film attendance that began that year had to do with the fact that the National Film Corporation (NFC), established in 1972, had no Tamil films to show for the period, resulting in a decline of 10 million in audience attendance, especially in Jaffna and the country’s East. By 1982, when Rupavahini began island-wide transmission, annual cinema audience attendance had dropped to 51.9 million.

At the time Mr. Wickremasinghe made his exit in 1989 as the State Film Corporation’s longest-serving CEO, he left a legacy reflected in the following statistics and facts: a decline of 45 million in annual audience attendance; a drop in the number of cinemas from 365 (in 1979) to 250, a bankrupt NFC, and Sri Lankan cinema fallen to its knees.

The devastation wrought was unstoppable. All those who had a hand in the NFC in the post-Anton Wickremasinghe years attempted to sustain, not resurrect, a wrecked and tottering institution. This sad state of affairs at the NFC was an archetypal case of political wheeling and dealing, meddling, gross incompetence, haplessness and irresponsible squandering of opportunity in a government enterprise.
By 2000, fed up with the mess made by the NFC, private sector film moguls entered the picture and started to take action. An enormous lobby was mounted, led by Ceylon Theatres, to privatise the import and distribution of films. There was much breast-beating about the “privatisation solution” as an answer to the NFC failure. President Chandrika Kumaratunga’s favourites were harnessed in the lobbying. In 2001, in a typical U-turn on the assurance she made in 1995, Ms. Kumaratunga gifted, via circulars, the import and distribution of films on a platter to a hastily assembled private sector film distribution foursome, thus finishing off the NFC monopoly.

No fees were charged; no business plans were called for; no competitive tenders were issued; the legality of the measure was never ascertained, and even now the measure taken is in doubt.
In effect, President Kumaratunga’s measure rendered the NFC a toothless, powerless hermaphrodite. Still, in another contradiction, while she held that the NFC was “useless”, she still kept a slice of film import and distribution in the hands of the NFC!

Decimating the hapless, inefficient, clueless NFC appears to have been the ultimate goal of the lobbyists who kowtowed to President Kumaratunga.

She, in turn, throttled the NFC, the “child” of her mother Sirimavo Bandaranaike, in the tradition of classic cinema tragedy. She had believed the assurances given to her by the film private sector lobby of a coming resurrection of Sri Lanka cinema, once the despised NFC was neutered.

The reverse was to be the case. Having climbed onto the saddle, the film private sector did almost nothing, except for one film distributor, EAP, who alone improved some 20 cinemas, renovating many of them. Beyond that lone attempt, there was no display of the vaunted private sector initiative: no better films; no superior marketing; no attempts to make the cinema give value for money; no attempts to reduce costs. In a curious display of private sector initiative, admission fees were increased at a time of declining demand! As filmgoers deserted cinemas in droves, cinema halls became cheap love-hotel havens for young lovers.

Although Ceylon Theatres trumpeted private sector capability in lobbying for privatisation, the distribution company it partnered with, CEL, could not turn around the decline in attendance. It watched haplessly and helplessly as its own share of yearly attendance dropped from 2.8 million in 2002 to a mere 1.2 million in 2007.

The promises to turn the film sector around vanished as the players turned their business attention to ceramics and supermarkets. They seemed to have had the last laugh at the expense of President Kumaratunga and her favourites who had assisted so enthusiastically in the delivery of the privatisation bequest.

Today, in a damning but classic case of the total failure of a vaunted private sector initiative, annual audience attendance has declined from 17 million in 2001, when the privatisation occurred, to a mere 7.6 million in 2007 – and this at a time when the population had grown to 22 million. The number of cinemas has dropped to 148, from 179 in 2001.

The Entertainment Tax was originally introduced in the 1930s to cover the cost of stationing a fireman in a cinema. These were times when the film used was flammable; today, with the use of safety-base film, flammability is no longer an issue. However, the local authorities continue to charge an “entertainment tax” for a service no longer rendered (on top of the municipal rates charged).

There is more to this tale: as Sri Lankan cinema lies on its deathbed, battered by increased electricity costs, escalating overheads and declining audiences, the local government authorities, ever searching to extract their pound of flesh, are reportedly seeking to increase the entertainment tax to 25 percent of the ticket price, in a move akin to extracting blood from a dying patient. That will surely finish off whatever is left of the Sri Lankan cinema, if nothing else will.