How OTT kept Indian cinema out of quarantine?

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Volumes have been written about the rise of the OTT sector during the COVID-19 pandemic – the global entertainment industry’s shift from conventional platforms to digital streaming is a pivotal event in the world of entertainment. This trend not only changed how consumers approached viewing content, but also enabled producers, actors and studios to modify their craft and methods, to facilitate the creation of more convenient and easily accessible content.

Less well known is the impact the shift had on movie industries at large. This part of the story is a lot more complicated that the notion of ‘easy, cheap access’ due to the number of moving parts and variables involved in the movie industries all over the world. Bollywood too was no stranger to this, and the effects of the pandemic and the platform shift are varied across all of the involved parties. Let’s delve into how the OTT platforms kept Indian cinema alive, but also compromised the Indian movie industry.

Consumers and audiences

There is no denying that the biggest gainers from the last 18 months have been the consumers at large. We as the public experienced no interruption to our entertainment needs due to the rise in popularity of OTT platforms, both large and small. Literally every form of movie, TV show, documentary and more is now available to us at the click of a button, and it is likely that this new reality is here to stay. Covid lockdowns may have inhibited our capability to visit movie theatres and cinema halls, but that didn’t stop people from enjoying recent blockbuster releases on digital streaming services, at the convenience of their own homes, and without the expenses associated with cinema viewership.

This, in effect, meant that the demand for Bollywood movies actually grew over the last year, as more people were able to access content. The Indian television and movie industry’s revenue grew by almost Rs 20,000 crores between 2019 and 2020 – a staggering rise from the net revenue of Rs 60,000 crores in early 2019. Pair that fact with the decreased costs and expenses, and it is evident that the demand for entertainment products from consumers grew at a commendable rate during the last 18 months.

Producers and studios

Another significant gainer, and the ones that benefitted the most from the shift in the context of the pandemic itself were the production houses of Bollywood. In March 2020, the government announced a nationwide lockdown to combat the growing spread of Covid-19. The Indian entertainment industry became an unfortunate casualty of the move, with over 10,000 studios being forced to shut down indefinitely. In a sector where studios have no stable source of revenue aside from the sales and licensing of their products, this was a near-fatal situation as many producers had to give up projects and their livelihoods since their works couldn’t be released as they were previously, meaning no earnings and revenue.

The OTT industry was the knight in shining armour for these production houses. By providing them with a platform where their work could be released while adhering to Covid regulations, the likes of Hotstar, Netflix, Prime Video, and dozens of local OTT platforms literally rescued over hundreds of studios, offering larger untapped audiences as well as unprecedented licensing fees and future opportunities. Many major Hindi movies, including Gulabo Sitabo, Laxxmi Bomb, Sadak 2, Gunjan Saxena and more were released on digital streaming formats, and their studios actually reported net profits from these projects due to the fees the platforms paid for the rights to air their work. Many celebrities and actors, including the likes of Alia Bhatt, Akshay Kumar, Amitabh Bachchan and more, have openly endorsed this shift; and indeed, Bollywood at large has benefitted from the involvement of OTT platforms.

The big three (Netflix and Co) have also commissioned projects with many studios, to release original content exclusively on their services – a move that has assured support and funding for many filmmakers and actors to work with.

Theatres

Unfortunately, on the flip side, this shift also had resulted in collateral damage to the theatres themselves. PVR, India’s largest cinema hall chain, has experienced almost $50 million in losses over the past year, and is still operating on a limited capacity in select locations. Inox has had to shut down several of its multiplexes permanently, as it has been unable to sustain the cash burn incurred due to the lockdowns and slow reopening process. Spokespersons from both major cinema chains have been very vocal about how the shift to OTT platforms is detrimental to the industry at large, but the statistics belay their claims. In fact, the Producers Guild of India too has praised the impact the OTT industry has had and simultaneously lamented the statements of PVR and Inox.

Long term, the theatres have undoubtedly been compromised. Until the pandemic is formally resolved, limited theatres can run at a limited capacity; and their revenues and income will only be a fraction of what it used to be. The addition of expensive overheads and add-ons only makes their services less attractive to the average consumer, and the operating revenues of the industry (which had already declined by almost 70% in 2020) aren’t expected to recover anytime soon.

On a whole, it is easy to understand the beneficial impact that the rise of the OTT sector had on Bollywood. Several large studios even owe the OTT platforms for their sustenance in the light of the pandemic; while Bollywood as an entity has essentially evolved its content delivery mechanism and kept going, rather than coming to a fatal standstill due to the lockdowns and safety regulations. While not everyone has gained, there can be no doubt that OTTs definitely saved Indian cinema during the Covid-19 pandemic.