A film producer, a critic, and analysts explain an existential threat to Indian movie makers

BCCL

• Digital release of the films might be another component of the ‘new normal’ that experts anticipate post-COVID-19.
  
• While big production houses may be able to afford to wait it out until the lockdown ends, medium and small budget film producers may not have an option but to release their films on OTT platforms.
  
• Business Insider spoke to media and entertainment experts about how sustainable is the option of releasing films directly onto the streaming services.
  
• Indian film producers are likely to make only half the profit through digital release.

With cinema halls closed, streaming platforms are chasing film producers premiere films on their platforms during the nationwide lockdown. These OTT platforms have been under pressure to provide new content frequently to sustain user growth. It’s not just OTT platforms but film producers too, who are trying to not lose money by opting for a web premier.

Some upcoming films like Lakshmi Bomb featuring Akshay Kumar are in talks with Disney+Hotstar for a release. Even Zee5 is considering premiering movies directly on its platform in the near future. On the other hand, some are holding out — like Kabir Khan’s 83, despite receiving a ₹143 crore offer.

Digital release of the films might be another component of the ‘new normal’ that experts anticipate post-COVID-19.

Business Insider spoke to media and entertainment experts about how sustainable is the option of releasing films directly onto the streaming services.

Will web premiers be the new normal?

While big production houses may be able to afford to wait it out until the lockdown ends, medium and small budget film producers may not have an option but to release their films on OTT platforms.

“With Box Office collections continuing to account for a lion’s share of a film’s overall revenues, some producers may choose to bide their time and wait for the situation to normalize, rather than settle for potentially lower revenues by releasing on an OTT platform” Girish Menon, Partner and Head, Media and Entertainment, KPMG in India told Business Insider.

Film critic and senior entertainment journalist Latha Srinivasan believes producers who are looking to make a profit on their films are aware that streaming services might not be able to match the returns of a theatrical release.

Producers in India first release the films in the theatres and bag an offer for streaming it online two to three months after the premier. However, once the film is released on OTT platforms audiences will no longer flock to the theatre to watch the same film, Srinivasan pointed out.

No gain no loss

(BCCL).
Even those producers who are considering a digital release aren’t going to make any profit out of it. Just like film producer Akshay Bardapurkar — whose film AB Aani CD featuring Amitabh Bachchan recently released on Amazon Prime — who opted for a digital release to recover losses.

“The calendar is likely to get bunched and smaller films will have a tough time finding a screen. Screens will be a big problem. Therefore, some of the smaller movies may decide that it is better to release films on OTT platform,” Jehil Thakkar from Deloitte India told Business Insider.

Once theatres open, footfall will continue to be tempered even if people decide to head out and go for a movie. The audience will also be very selective about which movie to watch.

Thakkar believes, the trend will ultimately depend on how much OTT platforms are willing to shell out in order to purchase a film. A producer would expect at least 60% return to be on even keel with expected returns from the box office.

At the current rate, Indian producers would earn at least 25% to 50% less on OTT platforms in comparison to releasing their movie across theatres in India as well as overseas.

“For example, a film of Stree, Badhai Ho and Raazi’s calibre would easily lose between ₹35 to 55 crores per film by avoiding the theatrical release. But there is no option for a few producers, as once the theatres, open windows for releasing films even of A-list actors would be very limited,” Murlidhar Chhatwani, Managing Partner, Panorama Studios Distribution

The existential crisis of cinema halls in India

Tickets counter of Fun cinema in Hinoo area wears a deserted look after state government announced a closure of all major public places including cinema halls amid corona scare in Ranchi (BCCL)
Apart from big producers, theatres also don’t want films to be released on OTT platforms as it would eat their business. On April 5, Multiplexes Association of India urged all producers and directors to refrain from the digital release of the film and wait until the theatres are open again.

Cinema halls in India are losing ₹150 crore a week ever since India shut down 9500 screens over coronavirus outbreak.

In South, Tamil Nadu Theatre Owners Association (TNTOA) have threatened 2D Animation — a production house of actor Surya — after it reportedly made a ₹9 crore deal to release film on Amazon Prime.

Theatres are banking on post covid-19 release of films in large numbers for the revival of their business.
See also:Cinema halls may not open in India until June end
Streaming platforms who are on a new high — are hosting web premiers and might even expand to gaming