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OTTs to benefit from the availability of price-discovery platform as cinemas reopen

Shorter OTT release windows and direct-to-digital, too, will stay say experts

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Mumbai: As many as 15 Bollywood movie release dates were announced within 24 hours of the news of cinema theatres reopening in Maharashtra on 22 October. These include the much-awaited titles such as ‘Sooryavanshi’, ‘Bunty aur Babli 2’, ‘Satyamev Jayate 2’, ‘83’, ‘Jersey’, ‘Tadap’, ‘Chandigarh Kare Aashiqui’, ‘Pushpa’, ‘No Means No’, and ‘Bhavai’ in 2021 and more for the next year.

The enthusiasm is palpable with many welcoming the decision as a ‘victory’ of sorts for Cinemas over OTT. Yet, just a week back, multiplex chains that refused to screen the Hindi version of ‘Thalaivii’ were staring at a similar struggle over the gap between theatrical and digital screening for new releases. Having been released on 10 September, the Hindi version of the Kangana Ranaut-starrer is now streaming on Netflix, challenging conventional windowing norms.

Cinema experience is unparalleled and in a film-crazy nation like India, it is expected that movie viewing will eventually return to the old normal. However, some things will definitely change, perhaps for the better. The direct-to-digital wave which saw digital rights revenues double during 2020 to Rs 35 billion (EY-FICCI March 2021 report on Media and Entertainment Sector), and continuing, was after all, not all ineffectual.

The Box-office Barometer

A study by Ormax Media published in July revealed that the 26 films which were originally conceived for a theatrical release but were released on streaming platforms due to the pandemic, fetched the producer a net gain of Rs. 350 cr, which more than offset the Rs 120 cr loss at the box office. However, it added that the “numbers look what they are, because of the absence of big Rs 150-200+ cr grossers (‘Sooryavanshi’ and ‘83’) at the top and the price premium streaming platforms paid in 2020 which can be seen as a marketing cost to acquire new subscribers.”

Based on the industry estimates, the total monetisation from streaming rights across the 26 films stood at a “staggering Rs 720cr” as against Rs 250 cr if the 26 films had been released theatrically, at pre-covid streaming acquisition prices, it said. According to the EY-FICCI March 2021 report on Media and Entertainment Sector, digital rights grew as much as 86 per cent in 2020 compensating producers (wholly or in part) for lost theatrical revenue. This approach is, however, not sustainable.

Mukta Arts MD Rahul Puri points out that it’s natural for a Rs 20-25 cr medium budget film to do good business on OTT platforms that are paying upwards of Rs 30-35cr for it. “Not only is the production cost being recovered, but when you go directly to OTT there’s no distribution and marketing cost to be incurred. It’s a sizeable profit, therefore. But the issue is going to be with the kind of legacy that the film earns. The brand value of a film that hasn’t been released in the theatres obviously goes down, and when it comes to a subsequent rights sale, its IPR value will diminish much faster; more so if the movie didn’t do well releasing directly on digital.”

Stressing on the importance of theatrical releases for movies, Mumbai Movie Studios CEO Naveen Chandra notes, “A film’s box office performance typically serves as a price discovery platform, in the absence of which everyone is grappling with various formulas. A lot of good and bad decisions have been taken in this process of experimentation.”

While in order to grow their subscription on the back of increased digital consumption OTT platforms may have agreed to acquire films for a premium, Chandra believes “there needs to be rationalisation in prices going ahead. By now the OTT platforms must also be having an idea of what their viewers are seeking, and should therefore tailor the content in terms of language, formats, and genres,” he adds.

As regards ‘Thalaivii’ both Puri and Chandra are of the opinion that the situation would have played out differently had the big markets which contribute 35-40 per cent to the box office been open. “It was mainly the large multiplex chains that boycotted ‘Thalaivii’; the single screens are unfortunately in no position financially to hold out, and so they allowed the film to go ahead. Realistically speaking, Tamil Nadu is a strong single-screen state. So, with Maharashtra being shut the producers didn’t have much to lose,” states Puri.

Direct-to-digital, shorter release windows stay

The digital medium has not only provided another platform for the audience to watch movies, but also to filmmakers and producers to tell more stories with diverse formats, characters, and narratives. The nuances of the medium are sure to provide it some sort of exclusivity in story-telling.

Shemaroo Entertainment, COO, Kranti Gada says, “OTT audiences have now got a taste of watching new movies at home, and this new reality is expected to continue providing a feasible release option for smaller, lower-budget films. Movies that can be enjoyed on smaller screens are more feasible for OTT platforms in the long run and therefore, they are expected to commission more original movie content going forward. Earlier, we used to see smaller movies that were unable to get a theatrical release go direct to video or television. This has now been replaced by direct-to-OTT.”

Sharing Shemaroo’s experience through the pandemic years, Gada states that the outlook of big production houses and producers about the digital medium has changed, and they are now more open to reaching a wider audience through digital platforms. “The balance between commercial feasibility and reach will decide the way forward. One thing is certain; the eight-week exclusive theatrical window will not be something that producers will be held to and the norm will be broken. From eight weeks to four weeks or even shorter, the OTT release window is bound to change,” she asserts.

Eros STX, chief executive officer, Pradeep Dwivedi also believes that windowing opportunities for theatricals will significantly reduce even after the situation eases. “In pre- pandemic days, a movie would take anywhere between two-to-six months to premiere on television after its theatrical release. Now I see this reducing to two weeks even after the pandemic is over. Post which, the movie will premiere on OTT followed by broadcast or, in some cases, the other way around.”

In an industry-first move, Eros International had opted for the same-day digital and satellite release for the Rana Daggubati and Pulkit Samrat starrer ‘Hathi Mere Saathi/ Kaadan/ Aranya’ on 18 September. The film’s release on ZEE Cinema was immediately followed by streaming on Eros Now, the OTT platform owned by Eros STX Global Corporation.

“With limited windowing opportunities for theatres, launching on OTTs is a natural choice for large studios like Eros Motion Pictures.  Since we also own Eros Now, we prefer the straight-to-OTT route till the pandemic situation improves and markets open up. In fact, going straight to OTTs allows large studios like Eros to produce more content with a wider diversity of talent from across India in addition to working with top stars,” observes Dwivedi.

Even though Mukta Arts’ Puri is convinced of a return to the (old) normal when the pandemic is over, he does agree that OTTs will continue to invest in the films they think will work on their platforms. “While small/medium budget movies will still look for theatrical releases, there are a number of producers who will go primarily to OTT without even having a conversation about cinema. Big, commercial movies that are going to make 250-300 cr at the box office have no reason to do so. OTTs will pay a substantial amount for these films because of their brand value.”

Chandra hopes that among and between the 30-second ad films, 100 hrs TV shows, 15-20 hrs web series, and two-hour films, the experimentative and edgy medium of OTT will find its place even as movie lovers return to the theatres.

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