Is the lockdown a blessing for OTTs and a blow to Exhibitors?
By Rachit Daruka
Without doubt, an increase in internet penetration and a surge in smartphone sales have benefited the OTT industry in India. In January 2016, Netflix took India's urban youth by storm, offering something totally different from what was being released in theatres and broadcasted on television - quality content. After Netflix, a host of other platforms entered the market, targeting different segments of the youth. To some extent, I'd compare this to the emergence of the parallel cinema movement in India in the 1950s, both having “good content” as their USP.
Back then, Media and Entertainment industry analysts, researchers and experts, asked if the emergence of OTT platforms would have a detrimental impact on theatre footfalls. But subsequent box office collections proved otherwise. When theatres were later questioned for overpricing Food & Beverages, they got away with it, and their numbers went undeterred. Then again, at the Annual General Meeting of Reliance Industries, Mukesh Ambani announced that Jio Cinema would offer a First Day First Show (FDFS) service. A service through which films could be viewed at home on the same day as their theatrical release. This lead to a fall in the share prices of major multiplex chains like PVR and Inox, but with no statement post the announcement, the share prices rebounded. The theatre industry emerged as usual — unscathed.
But now, with the COVID19 pandemic and the country under lockdown, exhibitors are loosing money. Loads of it. For the first time since the 2008 strikes, theatres are loosing big money. For the first time, 95% of all theatres across the globe are closed. OTT platforms though, have made their presence felt, by becoming integral to the lives of the millions of people in quarantine.
With shows like Money Heist, Panchayat and Asur releasing recently on Netflix, Amazon Prime Video and Voot respectively, the traffic on the these platforms has increased. According to RedSeer, a management consulting firm, OTT audio platforms like JioSaavn and Gaana, might move to a subscription based model as their traffic has increased these past three weeks. Even the audio streaming industry, whose revenue models include advertisement and bundling, would now move towards a subscription model.
But do these developments in the OTT space result in the downfall of theatres?
I do not think so.
A webinar by ComScore Marketing, with prominent members from the exhibition, distribution and production sectors, dealt with the recovery plan for theatres — to rise above the odds post-lockdown.
All panelists agreed that it would be difficult to tackle the 'fear psychosis' in the minds of the audience which results in their reluctance to visit theatres. Their measures to regain audience confidence include providing face masks to employees, installing hand sanitiser pumps, thermally testing visitors upon entry, accepting digital payments only, and maintaining social distancing in theatres by decreasing the number of shows and ensuring that each show is sold out at half occupancy so that there are vacant seats between audience members. Alok Tandon, CEO of Inox Leisure, also hinted at reduction of ticket prices.
As these steps would lead to a reduction in revenues of all the entities in the value chain, some producers plan to hold their films until the situation gets back to normal, which according to experts might take a month or so after the lockdown is lifted. But holding back a film may be harmful for certain production houses, so they might release their films anyway. The big films of the year will only release once the global market is ready for them, ie. when theatres across the world are open with a decent audience.
Single Screen theatres would be the worst hit. Maintaining hygiene is be a huge burden on their pockets as they need to provide decent sanitation facilities while reducing ticket prices.
We can all agree that post-lockdown, going to the movies would not just be about watching a film. Studios would offer previous blockbuster films to exhibitors to re-release them - like Dilwale Dulhaniya Le Jayenge. Exhibitors are also looking at ‘A Rohit Shetty Week’ or ‘A Marvel week’ to entice more audiences to visit theatres. It would not be an exaggeration to say that the theatre-going experience would just get bigger post lockdown.
As a media student and a keen observer of the OTT space, I believe that after a week of drudgery in cubicles, people need an outing with their families. In India fortunately or unfortunately, this outing equates to going to a mall, watching a hearty family film and having dinner at a restaurant later. Going to a theatre to watch a play is still reserved for the highbrows of the metros, and the lack of other entertainment options, inevitably draws people to the theatres with a large tub of popcorn in hand.
Although we might not be able to watch a ‘A Death in the Gunj’ or a ‘Masaan’ on the big screen, as these would have an OTT exclusive release; the big screen would always welcome the Singhams and the Baahubalis of the world. The exhibition sector is going through a difficult phase, but with time it will grow concurrently with the its younger counterpart (or competitor) - the OTT industry.