MUMBAI: As theatres continue to remain closed amid the countrywide lockdown, the impact has been felt on the release of scheduled films. While many producers are waiting for theatres to reopen, some of them have chosen the OTT route to cope with the crisis. Multiplex owners are miffed at the newly emerging distribution model. Although the battle between exhibitors and producers is visible now, globally the direct-to-digital model has been coming for quite sometime. While OTT platforms stay at the centre of the controversy, they strongly endorse the co-existence of both the windows and the rest of the industry, too.

Earlier, we at Indiantelevision.com reported that some of the producers and distributors might look at streaming platforms for an early release. Experts said that large-scale films in India will wait for this crisis to get over to have a proper theatrical release but mid-scale or small-budget films have higher chances of looking at streaming releases if lockdown continues. Unfortunately, the country is still grappling with the Covid2019 crisis and the possibility has proved to be true.

Movies including Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo and Vidya Balan's Shakuntala Devi have lined up for a digital release on Amazon Prime Video along with five others. Ghoomketu, featuring Anurag Kashyap and Nawazuddin Siddiqui, will be available for streaming on ZEE5. Some south Indian films are also looking at releasing on streaming services under pressure.

“This is a ‘short-term opportunity’ in a unique situation. Eventually, theatres and OTT will have to learn to co-exist because it is the consumer mandate and we have to be where the consumer is. It is similar to a new wave of films being produced in a particular industry or when theatres had to be re-imagined from a single-screen experience to multiplexes,” ZEE5 India programming head Aparna Acharekar says. On ZEE5, movies and originals grew by more than 2X in terms of users; original grew by 203 per cent and movies by 236 per cent.

TheSmallBigIdea CEO Harikrishnan Pillai says that direct-to-digital doesn’t give the revenue or the 'frenzy' that a theatre release gives a film. According to him, this is not a pleasant decision for a producer or an actor. But if social distancing becomes a norm, there may be decisions for hybrid launches and films of the future might release on all screens together with a unique pricing strategy, he states.

Although the trend is very clear, analysts still believe the question remains if producers will be able to make up the cost on digital releases. Pillai adds that producers have always been selling satellites overseas and have covered a part of their cost. OTT right was a new norm that added to this revenue. According to him, with an OTT-first release, these films could command a premium but that premium won't cover the loss made by muting the biggest distribution channel, which is the theatre. So, theoretically, revenue loss is imminent.

“But here’s the twist. When you make a film, there is a chance of it tanking at the box office. So if the film is sold outright to a platform on the back of the starcast and the perception, there is a possibility that the producers will end up hedging possible losses,” he adds.

“Small and medium films are quickly picked up as they offer good content at a reasonable price and have value for money. For big-budget films, there is a lot of number crunching. In addition to this, producers of big films may have the patience and financial capacity to hold on but the same is not the case with smaller films. But going forward, be it smaller-budget or big-budget, the digital boom will see a lot more movies being released on OTT. And we are positive that consumer habit formation and behaviour post-pandemic will also influence this trend in a major way,” Acharekar notes.

Pillai comments that films on OTT are also a platform for marketing and nothing sells a content distribution network the way good content does. So when a film releases on OTT, the platform stands to benefit not just from downloads but also from perception.

“Won’t OTT platforms like to be called the next box office? But this is great for a cash-rich platform and for the early days. As time progresses, prudence will prevail. Big films with big star cast might go for models where they will have a fee and a percentage of new downloads or have a completely different pay-per-view model being developed with the OTT platform and make it the new box office window,” he adds.

Disney was one of the first studios to foray into this new distribution model, with the streaming release of Frozen 2 on its OTT platform Disney+. However, Walt Disney Ltd CEO Bob Chapek also said in an earnings call that they very much believe in the value of the theatrical experience overall to launch blockbuster movies. But he added that they also realise that either because of changing and evolving consumer dynamics or because of certain situations like Covid2019, they may have to make some changes to that overall strategy just because theatres aren't open to the extent that anybody needs to be financially viable.

“So we're going to evaluate each one of our movies on a case-by-case situation, as we are doing right now during this Covid2019 situation. I think you know that Artemis Fowl is moving over to Disney+ given the demographics of the appeal of that film, which was not originally the plan. But all our other tent-pole movies have been rescheduled theatrically for later in the year. So we very much believe in the power of that launch platform for our big movies,” Chapek added. Notably, reports suggest that Disney+Hotstar is in talks with big producers in India for acquiring movies.

However, some analysts are highly optimistic about the never-ending appeal of cinema in India. “India is one of the few countries which does not have anything except cricket as an entertainment and family outing; the screen count (screen penetration) too is very less vs global counterparts given the variety of content (Hindi and regional). We, hence, believe that cinemas will be a priority if people want to go out... Multiplexes will never fall short of content given a large number of releases (almost 400 Hindi films out of a total of almost 1500 films released every year),” Elara Capital VP – research analyst (media) Karan Taurani says.