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The business of movies: direct-to-OTT versus theatrical release of big-budget Bollywood films

Ever since movies started releasing directly on OTT, there has been a Bollywood release or two every month. During the pandemic, especially, several filmmakers made a choice to take the streaming route instead of waiting indefinitely for theatres to reopen.

To be sure, some filmmakers are waiting for theatres to reopen (Delhi reopens theatres at 50% capacity from July 26, 2021). Among them are the makers of some movies with a budget in the range of Rs150-200 crore, like Sooryavanshi and ’83. Industry insiders expect interest in the range of Rs15-20 crore has already built up for each of these films.

Last year, the biggest OTT release was Akshay Kumar’s Laxmii on Disney+Hotstar, followed by Varun Dhawan’s Coolie No. 1 on Amazon Prime Video. Had these movies released in theaters, they would have done business of at least Rs150 crore and Rs100 crore, respectively, if the good response to them on satellite and OTT is any indication.

The first half of 2021 has seen Salman Khan’s Radhe: Your Most Wanted Bhai coming out on ZEE5 while Farhan Akhtar’s Toofaan premiered on Amazon Prime Video on July 16, 2021 (it was earlier slated for theatrical release on September 18, 2020).

Among these, Laxmii got a very good price, in excess of Rs100 crore, courtesy of Akshay Kumar’s superstar status. This was the best price that a straight-to-OTT film has fetched yet. Moreover, it had an early riser advantage – even though Sadak 2, Dil Bechara, Khuda Hafiz and Lootcase arrived on OTT before it, it was by all means the biggest of them all. It got a handsome price and the best performance till date for a Bollywood release, something that Disney+Hotstar as well as Akshay Kumar vouched for.

Ditto for Coolie No. 1 which was a major acquisition for Amazon Prime Video and they didn’t mind shelling big bucks – in excess of Rs75 crore – for it.

However, the million-million dollar question is, are all films as lucky? Do they indeed end up making as much money from their straight-to-digital release, as compared to the ‘theatre first’ model?

The answer is, no.

Let’s pick the example of one of the most-loved OTT releases of last year: Gunjan Saxena: The Kargil Girl. The Janhvi Kapoor-starrer was a well-made film and unanimously appreciated. Had it released in theatres before the pandemic, it had the potential to earn anywhere between Rs 50 crore and Rs 75 crore. In fact, had audiences lapped it up like they did Raazi, it might have even entered the Rs 100-crore club. That was indeed a lost chance for the film as it had to make do with a Netflix release where, by industry estimates, it made in the range of Rs40-50 crore.

Looking at the record number of films that are arriving on OTT this season, namely Bhuj: The Pride of India, Shershaah and Mimi, apart from Toofaan, Hungama 2 and 14 Phere which are already playing, one can well imagine how much more could have been generated at theaters. Especially the films with Ajay Devgn, Sidharth Malhotra and Farhan Akhtar had a lot going for them at the box office because while first in the list has a budget of at least Rs 100 crore, the other two are at least in Rs 50-75 crore range.

Of course, each of these films has managed to get the kind of price from their OTT partners that allowed them to cover the cost of making the film. That said, while the makers have managed to sail through, the ones who may eventually end up making maximum profits in the long run are the OTT players. Disney+Hotstar (Bhuj: The Pride of India) and Amazon Prime (Shershaah, Toofaan) may well have hit jackpot here. The acquisition of these three films is expected to be in the same range as the budget and that’s like hitting a jackpot for the OTT players who are getting early platform advantage.

From the theatrical business perspective, Bhuj: The Pride of India could well have been a Rs150 crore earner at least, if one goes by the promo which promises a lavishly mounted affair. War films aren’t common in Bollywood and hence this coupled with Shershaah, which is again the kind of film that would have dashed past Rs 75 crore, are the bonus elements for the OTT. Even Toofaan, though not finding as much appreciation as Farhan Akhtar and Rakeysh Om Prakash’s last outing together Bhaag Milkha Bhaag, was again a Rs 75 crores film in the making.

On the other hand, there are comedies like Mimi, Hungama 2 and 14 Phere that have the potential to cover any kind of distance. Even in the pre-OTT days, these were always safe films since their budget is in the Rs20-30 crore range, which means recovery through theatrical, satellite and OTT is guaranteed. However, one never knows when a Mimi turn into a Piku, or if Hungama 2 could emerge as a Golmaal and 14 Phere fill in the space of another Tanu Weds Manu. In such a scenario, we are talking about at least Rs 50 crore from each of these films.

Add the expected box office revenue of these six films, and we are talking about anywhere between Rs400 and Rs500 crore, and that too on the conservative side. Now that’s the money lost. Of course, there is a premium that a filmmaker gets when their film makes a dash towards OTT directly. However, that still only allows the costs to be covered and a bit more as profit. When it comes to the real gravy which is limitless and bottomless, it’s the theatrical business that wins because this is where word of mouth comes into the picture.

Alas, but for that, one would have to wait for a while before theatres reopen all over again, and the big bucks start flowing. Money Control

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