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Bollywood slows down on direct-to-digital release of films

With lower traction and growth of OTT (over-the-top) streaming platforms during the second covid wave, unlike the lockdown in 2020, Bollywood has slowed down its direct-to-digital film premieres.

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While top studios have waited for cinemas, especially in Maharashtra to reopen, many producers and actors admit to not seeing the kind of traction they expected for their movies on streaming platforms and that the space, for all its exponential growth, still caters to niche audiences.

OTT platforms, on the other hand, also rationalised their budgets for film acquisition where they can negotiate prices on the film’s performance at the box office first. Films released in theatres also come with censor board approvals.

As compared to 60-70% growth in subscriber addition witnessed during the peak of the pandemic last year, figures for monthly subscriber increase have stabilized to 15-20%, two media analysts said.

For instance, Netflix added only 1.5 million paid memberships globally in the June quarter. The Asia-Pacific (APAC) region, parts of which continued to be impacted by the pandemic, represented about two-thirds of its paid net adds in the period at 1.02 million. The company had added 3.98 million paid subscriptions in the March quarter globally with 1.36 million of these coming from the APAC region.

“There have been fewer Hindi films (this time) because most producers have been holding up their films in the wait for Maharashtra cinemas to reopen,” independent trade analyst Sreedhar Pillai said adding that no big star with a mass-market audience base is willing to experiment with an OTT premiere. Part of this has to do with the perception that OTT still caters to a niche target group but also because of the stronghold that national multiplex chains command in north India, and which have been vehement in their opposition to direct-to-digital release of films.

A senior executive at a streaming platform said the aggressive push to acquire films last year had stemmed from the desperation of streaming platforms as their content pipeline got affected due to the ban on shooting.

Producers were also keen to recoup their investments. That explains why a film like Laxmii that could have easily made around ₹150 crore at the box office, settled for an ₹80-100 crore deal with Hotstar. Shailesh Kapoor, founder and CEO of media consulting firm Ormax said acquisition prices were understandably higher for films that were meant for theatrical release but took the direct-to-OTT route because of the pandemic. The star cast was the biggest determinant of acquisition prices, and depending on how big the lead star is, prices ranged from ₹20 crore up to ₹80 crore.

“Buzz for a lot of those films (that released on OTT) was missing because there wasn’t much marketing or promotion, the talent couldn’t travel and there is only so much you can do on radio or social media and platforms realised over time that they had burnt their fingers,” the executive mentioned above said.

Netflix, Amazon Prime Video and Disney+ Hotstar, the three big players acquiring films, did not respond to Mint’s queries.

Most OTT platforms have also blocked significant portions of their annual budgets for post-theatrical rights of films, Shibasish Sarkar, group chief executive officer, Reliance Entertainment said. “They are dealing with a one-and-a-half year backlog because several films have been ready since 2019, plus others that were completed in 2020 and 2021. So, unless the film is really sought after, it may remain unsold till 2023,” Sarkar said.

However, unlike Hindi films, South Indian language movies have made a stronger push for OTT releases this year. Small to medium-budget titles such as Sarpatta Parambarai, Home, Tuck Jagadish, Kuruthi, Netrikann and several others, have been picked up as they come for lower price as compared to Hindi films and have also been gaining traction on OTT platforms lately.

“A lot of the southern films may have been conceptualised with the mindset that they could possibly go to streaming platforms so those producers don’t come from a place of desperation. Plus, rates of Rs. 20 crore have proven to be windfall gain for them,” said Balkrishna Hari Singh, founder and CEO, Frenzi – a single window search and recommendation app for streaming content. Live Mint

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