Advertisement

Entertainment

Updated on: Saturday, December 07, 2019, 09:05 PM IST

OTT platforms films: Boon or bane?

SANDEEP HATTANGADI explores the trend of films releasing directly on OTT platforms
Advertisement

When Bollywood superstar Salman Khan’s production house struck a five-year, multi-crore deal with Amazon Prime for exclusive rights to stream his films on their platform post theatrical release, the message was loud and clear — film consumption habits of the Indian consumer were witnessing a shift.

Underlining this trend the 11th edition of KPMG Media & Entertainment report ‘India’s Digital Future: Mass of Niches’, states that a key ongoing change in the film industry “has been the growing contribution of digital rights, which has grown by 30 percent in FY19 in line with the previous year driven by heavy demand by OTT platforms who consider new films as a key differentiator. Additionally, with a growing emphasis on regional audiences, OTT platforms are also investing in building regional libraries.”

The past few years have seen the number of OTT platforms multiply, from 9 in 2012 to over 30 in 2019 and that number backed by affordable data has seen an explosion of video consumption by consumers. Films are a large part of this video consumption that is now available on OTT platforms shortly after their theatrical release, much to the consumer’s delight.

Explains Aparna Acharekar, Programming Head, ZEE5 India, “Films are huge viewer/ subscriber acquisition drivers for both TV and OTT. The current trends show that there’s an exponential rise in digital consumers consuming content online. India is a country driven by family viewing and this reflects in the increased number of TV households. And digital video streaming players only compliment it. Since we are a broadcaster-led OTT, we bring in network strength to film acquisitions in terms of value and reach.”

Advertisement

To get an understanding of how serious the OTT industry is about its investments for both Bollywood and regional cinema, the report further explains how OTT platforms are investing heavily in acquiring film libraries. Amazon Prime acquired the digital rights for 12 films out of the highest 30 grossing Hindi films this year, followed by Netflix which acquired nine, ZEE5 acquired eight, Hotstar three and others two.

Explains Vishal Chinchankar, Chief Digital Officer, Madison World, “The consumer viewing habits have changed and digital service providers — from Netflix to Hotstar — are bombarding users with films, original videos-on-demand which is led to premium pricing for the production houses. Traditionally, satellite and digital rights were sold to a single channel at combined pricing, however, post-Amazon Prime and Netflix entering India, the digital rights are sold at a premium.”

Advertisement

Experts agree that as the OTT industry grows in strength and numbers, digital pricing will see an upswing, the benefit of which will be shared by both the production houses and OTT players. Says film trade analyst Girish Johar, “First of all, it benefits a lot of producers as well as production houses, because now you have an ample opportunity to produce great content and there is a larger revenue share. Digital rights or OTT platform rights is also giving them substantial revenue. More people are logging on to them, they are also seeing an increase that is why it’s a complete demand and supply match.”

Hence, for many small and low-budget films, which grow through word-of-mouth promotions, it is becoming more viable to release them directly on the OTT platforms.

For instance, Ronnie Screwvala’s Lust Stories and Love Per Square Foot and Karan Johar’s Lust Stories, Yoodlee Films’ (Saregama India) Brij Mohan Amar Rahe are some of the films which were directly released on Netflix. Even for a small budget film with a cost of production of under Rs 10 crore, the marketing, promotions and distribution costs have gone up to almost another Rs 15-20 crore. If the film is released in multiplexes, the box office revenue constitutes almost 55-60% of a film’s total earnings, but a producer’s share is only around 45% of the net box office revenues. Thus, even to break even, a typical small film has to recover over Rs 50 crore at the box office.

Now if the filmmaker can get the cost of production and some premium over and above for exclusive rights from an OTT service, it will make sense for him to have a direct to OTT release, which may also give wider audience reach.

No wonder that Screwvala (RSVP) has another six films lined up, out of which four will be released on Netflix, while Johar’s digital content studio Dharmatic Entertainment has signed exclusive output deal with Netflix for all its films and series. Yoodlee’s entire business model is based on OTT. Screwvala feels OTT will “disrupt” both the economics as well as audience consumption patterns forever. “The rhetoric that audiences will always look at going to the theatres to be a family outing will not make sense,” he said giving the example of restaurants, where delivery services like Swiggy and Zomato have disrupted the business models.

“Many restaurants have had to shut down and most make of their money only on home delivery. The same ‘Uberisation’ of content will also happen,” he opined. And it looks like a boon all around!

Advertisement

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Published on: Sunday, December 08, 2019, 06:45 AM IST
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement