Film producers in India normally get their biggest share of returns from box office collections.

Multiplexes and movie theaters are closed for more than three and half months now due to the resurgent coronavirus outbreak and subsequent lockdowns imposed across the country. There is still no clarity on when they will be allowed to reopen. Also, the virus-induced fear psychosis is likely to impact the appetite of movie buffs Indians once multiplexes and movie theaters reopen their doors after situations permit. The government had also banned the shooting of new movies and TV serials, etc., in the wake Covid-19 situations in the country. Though shooting, in some states, has started with restrictions and adherence to social distancing norms, one has to wait for some time more before cheering his/her favourite actor on the big screen of a multiplex while munching popcorns.

However, the good news for the deprived cine lovers came during the mid-May. Director Shoojit Sircar announced that his movie Gulabo Sitabo would premier on Amazon Prime Video on June 12. Sircar said he decided not to sit with the film since it was ready. The deal with the Amazon Prime Video helped him pay the team. And he can now “move on to complete post-production work on their next.”

Amazon PrimeVideo also signed deals with different filmmakers to release six more films on its platform, including a biopic of Shakuntala Devi, starring popular actor Vidya Balan.

Following the footsteps of Amazon Prime, Disney Plus Hotstar on Monday said it will premier Akshay Kumar-starrer Laxmmi Bomb on its platform. Disney Plus Hotstar also informed that it will be soon releasing six more films on its platform: Bhuj: The Pride of India; Dil Bechara; Sadak 2; The Big Bull; Khuda Haafiz; and Lootcase.

Leading multiplex players such as INOX and PVR strongly criticised filmmakers’ decision to release their movies on the OTT platform. “It is very disappointing,” they are choosing OTT platforms to release their movies “when we are just steps away from the theatrical releases with the reopening of cinema halls with all the necessary precautions,” said Mohan Umrotkar, CEO of Carnival Cinemas as reported by The Indian Express. “If films made for theatres release directly on streaming platforms, it may hamper the overall growth of the ecosystem,” he added.

The profit-sharing model:

Film producers in India normally get their biggest share of returns from box office collections, Indian Express reported. According to experts quoted by IE, they generally get around 60-70% of their earnings from box office collections, from domestic as well as overseas markets. Overseas markets contribute around 20-30% of total collections.

Movie with bigger box office collections, commands higher the amount for its satellite, OTT, and music rights. “That’s another advantage of a movie’s theatrical run,” said Umrotkar.

However, profit-sharing between producers and multiplexes and movie theatres varies; it changes depending upon the arrangements between them. It has been a contentious issue as most of the time the agreements are informal. According to trade analyst Girish Johar, producers take 50% of the profit in the first week, 45% in the second week, and 35% from the third week onwards after deducting the tax. However, this arrangement changes if a movie does well.

Movie theatres:

In India, watching a film with family members in a movie theatre during festivals is kind of customary. For many in India, watching a movie is more of an experience, a social event which binds their family and friends together. Even today, despite the growth of OTT platforms and the rise in availability of different mediums to watch movie, getting a movie ticket on Friday, (In India, filmmaker normally releases their movie on Friday) is quite a task because of the huge rush and demand.

OTT Platforms:

The last few years have seen the growth of OTT platforms in India, thanks to cheap data prices, credit must go to Reliance Jio. It’s a new phenomenon started just four years ago. These platforms provide you the luxury and comfort of watching movies as per your convenience, both time and place. All you need is an Internet connection with decent bandwidth (speed). These platforms have old and new movies, documentaries in their library. They even commission their own content. According to experts, people mostly watch content-driven shows or movies on OTTs. Here content is the king. Trends show people are ready to pay for good content. “The audience on digital platforms usually gets drawn to the content,” said Ajit Andhare, COO of Viacom 18 Studios. “The entire design of that content, especially in web series with a cliffhanger at the end of every episode, is very different from a mainstream film meant for a theatrical release,” he added. According to him, a movie can be made solely for a digital platform and “that’s something that is happening more often now.”

Conclusion:

However, big production houses such as Yash Raj and Reliance Entertainment have categorically said they won’t release their movies on OTT platforms. They are of the view that they won’t be able to recover their money for big budgeted movies like Ranveer Singh-starrer ’83 and Rohit Shetty-directed Sooryavanshi if they opt for OTT release alone.

There are nearly 10,000 screens in India; half of them are in multiplexes, while the rest are single screens. They sold movie tickets worth Rs 30 crore per day. If they lose new movie releases to OTT platforms, their business will suffer a lot.