Will OTTs eclipse cinema culture?

OTT platforms have severely dented the revenue models of multiplex theatres. How will the latter bounce back?

COVID-19 changed multiple facets of human life, and watching movies is one of them. During this period, when there were restrictions on movement, online platforms, or OTTs, emerged as a great source of entertainment. At the same time, viewers got accustomed to the many advantages of OTTs – low cost with multiple payment plans, the convenience of watching content at your own pace, the fine variation of content & movies being streamed on OTTs soon after their release.

Now, that the pandemic is under control and people are returning to the ‘old normal’, several commercial successes such as Jug Jug Jeeyo, Everything Everywhere All at Once & Top Gun: Maverick have released on the big screen. Yet, few movies are still being made exclusively for OTT platforms such as Cuttputtli, Samaritan, The Tomorrow War, Qala and Chor Nikal Ke Bhaaga. Hence, a question arising from this scenario is, who will in the long run continue to hold the keys to the hearts of Indian audience - cinema halls or OTT platforms?

INDIAN OTT LANDSCAPE

• India’s OTT market is in its 2nd growth phase with revenues of US$ 3 bn in 2022.

• It is expected to touch the US$ 7 bn mark by 2027.

Source: Media Partners Asia

ENTERTAINMENT 4.0

India has around 50-55 OTT platforms offering various content in multiple languages. Few operate free, while the rest work on subscription plans. According to a CII-BCG report, India had around 70-80 million paid subscribers by the end of 2021, compared to 14 million in 2018 and just 0.5 million in 201415. The market is led by DisneyHotstar, followed by MX Player and Zee5 and is expected to reach US$ 13-15 billion over the present decade. Interestingly, the pioneer Netflix does not count among the top 10 in India!

There is no denying the fact that OTT platforms have dented the earnings of theatres and will continue to do so. Indeed, there are few movies of the league of Avatar and Jurassic Park, which merit the experience of the big screen and surround sound. But for other genres, the differentiation fades.

We moved from an era of single screen theatres to multiplexes, which presented content across genres. With OTTs covering all those genres and more, with content from across the globe, users do not necessarily need to splurge an average of Rs 2-3,000 for every family outing, when they can do with a subscription that costs much less and lasts a month!

With bundled OTT options being offered by the likes of Airtel Xstream, Tata Play Binge and OTTPlay, the game is only getting bigger over time. Theatres have to slash ticket prices sharply to bring back more audiences to theatres. In order to sustain, they can explore price differentiation strategies (like increase the premier options) and open up other revenue streams.