said, “The age-old value chain has been a win-win for all — producers as well as exhibitors. If producers decide to go in for simultaneous or earlier launch of their films on OTT or television, instead of keeping the current gap from a theatrical release, we will not show the movies on our screens as it does not make business sense. And most
Domestic theatricals constituted 58.51% of total filmed entertainment revenue of Rs 17,450 crore in 2018
OTT and digital rights constituted 7.73% of total filmed entertainment revenue. In 2019, the figure is expected to go up to 8.75 % and in 2021 to 10.1 %
Of the 1,776 films released in 2018, 238 were Hindi
30.72% of the total of 9,601 movie screens were owned by multiplexes in 2018. Their share is increasing every year
India had over 15 million smart TVs in 2018, which may go up to 20 million by 2020. Jio’s offer of bundling a free TV with annual subscriptions could drive the number higher
1200 hours of original content was made for OTT in 2018
Sources: Ficci-EY report, industry
The multiplex owners are a force to reckon with as, according to a Ficci- EY report on India’s media and entertainment sector, they constitute over 55 per cent of the domestic box office collections. Domestic box office, which has the largest share of revenue of a film, hit Rs 100 billion in 2018. Of this, Rs 32 billion was contributed by the top 50 Hindi films.
According to industry sources, 50-60 per cent of the total box office collections of a movie comes in the first week. Producers get over 50 per cent share of the total net box office collections, and the rest is for the exhibitors. From the second week onwards, the percentage earned by producers goes down week on week.
“If a movie is shown on OTT simultaneously for which they get only a fixed fee (the price at which the rights are sold), producers and exhibitors will substantially lose money from their share of box office collections, which is the highest in the first week. And if the movie is a blockbuster, the producer will not get any upside the way it happens in theatricals. It is a loss for all stakeholders,” said a multiplex owner.
Currently, the average gap between a theatrical and other modes of releases like OTT or TV is between one and two months. Production houses say that Reliance Jio’s disruptive strategy has two problems. First, most big filmmakers want to see their movies in the theatres
first. Even in the US, director Stephen Spielberg has been pushing for reasonable theatrical runs for movies for them to be nominated for the Oscars. In fact, this forced Netflix to have a limited theatrical launch for Roma so that it could be an Oscar contender. (Roma went on to win three Oscars this year.)
Second, a production house chief says that even if OTTs were to use their financial muscle to buy big movies, they would be at least three to four times more expensive as the price would have to compensate for a fall in the box office collections.
Still, a change is discernible. The Ficci-EY report says that in 2018 small budget Indian filmmakers were releasing their productions on digital platforms like Netflix and Amazon rather than wait for theatrical releases. These included productions like Love per Square Feet or Lust Stories. They argue that earlier, factors like the inability to get adequate screens, budget constraints, content overload would have led these movies to go unnoticed. But now with 70-80 per cent of their collections coming from digital, such movies are less dependent on a theatrical release.
Besides, Reliance, which has bought stakes in Balaji Telefilms and Eros International, and has also set up its own production house called Jio
Studios, could leverage their strengths to make films exclusively for their customers — the way Netflix and Amazon has been doing. It could also work with over 6,600 single theatre
owners who, unlike multiplex players, might be more willing to screen movies simultaneously.