Swiss cinemas have accused retailers of eating into box-office takings by selling imported DVDs of films before they end their run on the big screen.
The film industry, which argues that the practice is illegal, says it will not hesitate to take offenders to court.
According to ProCinema, the umbrella organisation of Swiss cinema operators and film distributors, ticket sales fell by SFr22 million ($17 million) last year to SFr240 million.
Roger Chevallaz, a lawyer representing the interests of the film industry, said DVD rental and retail stores were partly to blame for the decline in box-office revenue.
“The amount of imported DVDs has increased dramatically over the past two or three years,” Chevallaz told swissinfo.
He added that the problem was most acute in French-speaking Switzerland, where shops stand accused of renting or selling DVDs imported from Canada with dual French and English soundtracks.
Chevallaz said anonymous checks had revealed that a number of retailers were routinely selling DVDs of films still on at the cinema.
“We think that up to 20 per cent of revenue [at the box office] has been lost because of these DVD imports,” he said.
Under the terms of a revised law which came into force on April 1, imported DVDs of films slated to open in Switzerland cannot be sold or rented prior to or during their run on the big screen.
But Pascal Junod, a Geneva-based lawyer and president of an association of DVD and video retailers in western Switzerland, said the law was open to interpretation and did not specifically ban the sale of films before they have ended their run at the cinema.
“The law is quite clear that films which are destined to be shown in the cinema cannot be rented or sold before they go on release,” said Junod.
“But it is more ambiguous about what the rules are once films open, and we believe that after this time there is nothing to stop us [from renting or selling them].”
Cinema owners and film distributors insist, however, that the law is on their side and have vowed to launch a legal test case if shops continue to sell films before they are taken off cinema screens.
“Anyone who flouts the law faces a fine of up to SFr100,000 or a maximum prison sentence of three years,” said Chevallaz.
The 2002 Swiss cinema law obliges cinema owners to show a “culturally and linguistically diverse” range of films.
Chevallaz maintains that this diversity cannot be guaranteed if cinemas lose the right to screen blockbusters before they are made available elsewhere.
"Cinemas make their money by showing the big Hollywood movies," he said, "so if they lose this income, they will no longer be in a position to show smaller films which do not generate profits."
But Junod does not believe the cinema industry is acting in the interests of consumers and points out that there is little to be gained from forcing retailers not to sell imported DVDs.
“The big film distributors want to control the market," he said.
"But consumers are not going to wait for a film to come out in the cinema. They can easily go to an online retailer like amazon.com and import a film they want to see from the United States, long before it goes on release in Switzerland.”
swissinfo, Ramsey Zarifeh
Number of cinema tickets sold (2003): 16.5 million
Number of cinema tickets sold (2002): 19 million
Box office receipts (2003): SFr240 million
Box office receipts (2002): SFr262 million