Since cinemas all across the country are shut, so some producers have decided to take the OTT route, which has upset multiplex chains.
'Gulabo Sitabo', starring Amitabh Bachchan and Ayushmann Khurrana, and directed by Shoojit Sircar, and 'Shakuntala Devi', starring Vidya Balan and Jisshu Sengupta, will release on streaming platform Amazon Prime. This is the first time that not one, but two films with big names will be available on digital before their theatrical release. The government has just announced that the ongoing lockdown will be extended till May 31, 2020. Cinemas all across the country are shut, and various stakeholders feel they will continue to remain shut for at least the next three months. So, some producers have decided to take the OTT route, which has upset multiplex chains.
In a statement, Inox says, "We would like to express extreme displeasure and disappointment on an announcement made by a production house to release its movie directly on an OTT platform by skipping the theatrical window run. The decision of the production house to deviate from the globally prevalent content windowing practice is alarming and disconcerting." Kamal Gianchandani, CEO, PVR Pictures, adds, "We are disappointed with some of our producers deciding to go straight to the streaming platform/s. We were hoping that the producers would accede to our request to hold back their film’s release till cinemas reopen."
According to EY, in 2019, the Indian film industry was worth Rs 19,110 crore, out of which, Rs 11,520 crore was contributed by domestic theatrical and Rs 2,700 crore by overseas theatrical. The third-largest contributor was satellite or television broadcast rights (Rs 2,200 crore) and digital stood fourth, at Rs 1,900 crore. It is clear that digital or OTT is still a very small part of the business, though it registered close to 50 per cent growth, from Rs 1,350 crore in 2018. EY estimates that close to 100 million Indians went to cinemas in 2019, while 500 million watched films on TV.
"Inox would like to reiterate that as the backbone of the cinematic value chain, this windowing pattern has done wonders in terms of revenues for the content creators and all other stakeholders. It offers them the opportunity to extract the best from all available mediums, which include cinemas, OTT platforms as well as satellite," reads the statement released by the chain.
The windowing pattern is a period during which the film will just be available in theatres, and only after the lock-in period is over will its rights be made available for television broadcast and digital stream. Globally, this window has been challenged many times. 'Beasts of No Nation' was released simultaneously on Netflix and theatres in 2015. Netflix had reportedly paid $12 million to get the distribution rights of the movie, which won many awards, despite bombing at the box office. Since then, many movies have been released on OTT platforms, and several have been made exclusively for subscribers of streaming services.
"Film, for any OTT platform, is the biggest acquisition driver," says Aparna Acharekar, programming head, ZEE5. "The day we do a digital premiere, we see a set of new subscribers joining the platform. Today, people have the internet and they are sitting at home willing to consume content, and, therefore, it makes sense for us to go the extra mile and offer them new films," she adds.
Amazon Prime acquired the digital rights for 12 of the 30 highest-grossing Hindi films of 2019, followed by Netflix (nine), ZEE5 (eight) and Hotstar (three). EY estimates, in 2020, digital's contribution to the film industry (Rs 2,380 crore) is expected to surpass that of TV (Rs 2,320 crore). "This is not the first time films are being premiered on a streaming platform/s. Cinema exhibition has regularly faced competition from new emerging distribution platforms over the last many years, and it has continued to enjoy cine-goers’ patronage and affinity," says PVR’s Gianchandani.
Then why are the multiplexes worried? Cinema business in India is heavily dependent on urban pockets, where families go out to enjoy the experience, and not just watch the film. An industry expert believes that due to fears surrounding Coronavirus now, the urban audience might just get habituated to OTT. "It is not only OTT, but Reliance Jio has also announced that for certain Gigafibre subscribers (fibre-to-home), it will offer first day, first show at 4K resolution, which families can watch on their smart TVs. During this period, when theatres are shut, the producers are in discussions with OTT platforms, and they can find a business model which benefits them in the long run. Remember, the producers aren't very happy with these chains, as they often prioritise big-budget, star-studded movies over smaller ones. Now, they have an alternative," says the expert, who works with a large consultancy.
In 2019, 74 screens had shut down in India. Most of them were based in the Hindi heartland. EY believes that because the films are now made keeping the urban audience in mind, people in the heartland have stopped relating to them. When screens are shutting in the heartland, if urban audience get habituated to OTT, the investments went on to setup gigantic multiplexes will be under stress.
Ajit Andhare, COO, Viacom18 Studios, feels it will be very difficult for a large film to contemplate only-digital release. "The films that expect a large theatrical revenue, which they can’t forego, will find it difficult to release on OTT, as it is unlikely any streaming platform would want to compensate that," opines Andhare. "It will all depend on how long you can hold a film as there is a cost of holding, too. So, for any medium or small budget film, OTT can be an option," he adds.
What if a film releases on OTT and then comes back to the big screen when cinemas open? "The pirated version will circulate all over the country. People will share telegram links to each other," says Mahendra Soni, co-founder and director of SVF Entertainment, which owns and operates OTT platform Hoichoi. "Moreover, the cost of release will remain the same, so, it won't make business sense as only hardcore theatre fans will then watch the film, which has already been released on OTT," adds Andhare.
SVF Entertainment produces, distributes films, and also commissions them for Hoichoi. "Just because two producers decided to release their film on OTT, I don't believe it will become a new norm. We have seen 'Drive' (Hindi film) launching on Netflix, but that did not change the business of cinema," says Soni. He feels this pandemic will give birth to many new relationships between producers and OTT platforms. "It won't be fair to isolate and judge the producers who have decided to release their films on OTT. We are in a pandemic and nobody in their wildest dreams imagined a situation like this. People will take the steps they need to stay afloat," adds Soni.
Film trade analyst Girish Johar feels it is still too early for OTT platforms to get films a release as wide as theatrical. "Most premium OTT platforms get their subscribers from the top 8-10 cities, a very upmarket audience. It can’t provide films the exposure it gets from a theatrical release," opines Johar. He believes that the current releases on OTT are nothing but “distress selling.” "See, bigger producers with deeper pockets won't get affected much. But, for smaller ones, who need the cash to flow in, will have to release movies so that they can manage human resource, clear debts," explains Johar.
"Say, a studio has 10 movies ready to release. Instead of holding all of them, it can let a few release on OTT. There is a cost involved in theatrical releases which the producer can save and, thus, by releasing it on OTT, he can cover some of the investments that went on to create the film. However, I feel it is a temporary phenomenon," says Johar.
Temporary, or long-term, remains to be seen. But experts do feel that while big-budget movies will continue to release in theatres, the smaller ones might gradually start moving towards OTT. If that happens, then multiplexes will find it difficult to sustain, as films starring the Khans, the Kumars and other top 10 actors release only once in a while.
"There is no hiding the fact that smaller films are never asked about when there is a big-budget film. When around a popular release, it often happens that a smaller film is put on a Friday and removed the next day, or given morning slots during the weekend. With OTT around, the multiplexes will have to balance it better because out of the 52 weeks, you will only have big films releasing on 20. For the remaining 32 weeks, you will have to depend on the smaller ones. If they do not balance it right, they will lose gems like 'Paan Singh Tomar', 'Khosla Ka Ghosla', 'A Wednesday' to OTTs," Johar concludes.