Are The OTT Platforms Superseding Film Theatres?
The emergence of OTT platforms has disrupted the entertainment sector. It is being propelled by the rise in the standard of living, evolution of smartphones, ubiquitous and affordable Internet connectivity coupled with increasing penetration in rural areas, and changing preferences of the audience.
The one thing that drives these platforms (minus the comfort factor) is their delivery of unique and creative contents. This is the direct reason why most of the OTTs coming from famous production houses are in losses while the comparatively smaller budget channels like ‘The Viral Fever’ is much ahead in the competition with its much original and fresh content like ‘The Pitchers’ and ‘Tripling’.
The increasing popularity:
With 180.3 million active online video viewers and almost 4 million registered subscribers, the OTT video services market earned over Rs 37 billion in 2017, and is expected to grow at a CAGR of 17.3 per cent over the next five years.
ALTBalaji’s Pantvaidya commented: “Today, we are in the early days of video consumption on Internet and there is no universal measurement system for hits and failures. This system does exist in TV today and therefore, there are parameters for measurement. From a consumer angle, as Internet has become more affordable and widespread, Indians are making conscious choices of what they want to watch and when. The mobile phone has become a second screen, but we are still a long way from cord cutting. The producer ecosystem for OTT thrives on multiple shows as show lengths are between 10 and 15 episodes today.”
According to SPN’s Sodhi, “The basic movement that has happened for consumers now are that they watch content from multiple screens. It’s not just one screen, its multiple screens. People are ready to see watch on any screen which is available depending where they are.”
Regional content tends to be effective on the digital medium in the free TV ad-led space.
Pantvaidya further noted: “Investments in high quality non-Hindi production are not justified in terms of revenues in the subscriber space today. Therefore, in the SVOD game, regional content is cost effective only if it can reach regional and diaspora audience. We have created shows in Tamil (‘Maya Thirrai’) and Bengali (‘Dhimaner Dinkaal’) as well as regional shorts and are looking at a global strategy to expand our regional content offering”
Abundance of advertising opportunities
With a growing number of streaming services delivering new content every day, OTT accounts for nearly 30% of TV viewing but ad spend lags behind at a disproportionate 3%.
With more than 200 paid subscription and ad-supported streaming services available, consumers have the freedom to choose one or several content(s) that fit their needs. As a result, streaming companies are competing for consumer share of time and share of wallet.
The Revenue Model
Indian market is different from developed countries. In this country, people own less number of smart TVs but too many smartphones. Most platforms have tried to capture this ‘mobile using youth’. Each of these platforms has their own mobile app with full range of services. This has ensured the reach to even remotest corners of the country and increase number of viewers.
Currently, there are only two major ways of garnering revenue from viewers. First is the conventional way of using ads in between videos. The other and more popular one is the subscription model. The user is asked to pay some amount upfront and then she can enjoy as much content as they want that too ad-free.
Each OTT has tried something innovative. Netflix offers shared account, where more than one person can use. In fact, it offers a ‘Mobile only’ subscription at just ₹199. Hotstar offers a ‘sports only’ subscription owing to its massive sports broadcasting segment. Sony Liv offers subscription on daily and weekly basis as well.
There is another interesting aspect to them: These platforms not just telecast their own movies or shows; they have to provide content from other production houses as well, like movies. Hence, they have to spend a lot of money in acquiring the rights. Even companies like Netflix, who are international giants in the business, had to spend huge money to provide local content to Indian viewers.
The emergence of OTT platforms has disrupted the entertainment sector. It is being propelled by the rise in the standard of living, evolution of smartphones, ubiquitous and affordable Internet connectivity coupled with increasing penetration in rural areas, and changing preferences of the audience. Content is now king in a real sense, and it is personalized and provides opportunity for wider focused distribution. A recent Boston Consulting Group report has predicted that the OTT segment in India is currently pegged at $0.5 billion and is poised to grow to $5 billion by 2023. Affordability and convenience are the key factors that have propelled the OTT revolution in India.
It is noteworthy that several OTT players have been producing original shows and films besides offering live entertainment, which has managed to capture eyeballs. The proliferation of OTT platforms has evoked apprehension among the filmmakers that this may be the death knell for theatrical experience. It is now not uncommon to see certain films opting for the OTT route to reach out to the appropriate target audience. Video streaming platforms have certainly made watching movies affordable, convenient, and available ‘on the go,’ especially for those who prefer binge-watching.
Venturing Into Bollywood
Independent distributor and trade analyst Amod Mehra feels that going directly to OTT is a bad idea. He believes that producers will lose almost all other routes, including TV satellite rights, which earns a larger share. He was quoted as saying, “By opting for streaming for a theatrical release, they will lose almost all other avenues, including TV satellite rights, which make them a big part. When a producer signs Akshay Kumar for a film, he knows that if he spends `100 crore making a film, he will earn more than this. By selling OTT, it will be significantly reduced. “Once we are able to reopen these difficult times and theaters, we are very optimistic that the audience will want to come back,” says a source from a major production house. The theater viewing experience is here to stay. ”
Akshay Rathi, film exhibitor and distributor, opened up about his opinion on the matter and told Pinkvilla, “It is simple – it is an ecosystem that has existed for the last 100 years. It is mutually beneficial for all Resources have been there. In this one-hour crisis, everyone is in trouble. Not only the producers, but also the exhibitors are losing money. Asking not to, but at least we are hoping to discuss and speak with all stakeholders before taking such a call. Nobody wants to get out of someone’s shoulders to get out of the well. But we all want to strengthen it together. ”
“Before we completely sidestep, share it once. Maybe, we can find a solution that helps both of us. Maybe, there is a way where we can help you cover the cost of interest that will be increased till theaters open. Right now, it is time to overcome such problems and find innovative solutions simultaneously. “Akshay has also revealed that COVID-19 will be a completely new phase after time. “There will be a reorientation of the systems and processes that we are following. But we can stand with each other like rocks and think of each other. He said, “It is not too much to ask.”
Speaking about the request made by the multiplex association, he said, “The multiplex association had made a polite request to stick to us and not bypass us. Nobody had any reaction about it – specifically by the Guild or a producer and the next thing, we read that Gulabo is premiering on Sitabo Digital.”
With people trapped in the lockdown, the viewership of online platforms has grown considerably and is now working as a game-changer. Some filmmakers have decided to release their film directly on the OTT platform. Bollywood still had an 8-week gap between theatre and digital releases, allowing the streaming platform to choose a film by seeing audience response.
