OTT platforms such as Netflix, Amazon Prime and many more, which during the epidemic appeared as the savior for movies by becoming their main source of income and viewers, are no longer purchasing them prior to a theatrical release. OTTs now demand a theatrical release of a film before purchasing the digital rights to it.
Industry insiders claim that Bollywood films like Cuttputlli, Freddy, Gehraaiyaan, etc., that went directly to OTTs in 2022 even after cinemas had reopened, were primarily pandemic commitments.
Picking up the so-called sure-shot movies for OTTs makes sense in order to guarantee a positive return on investment. Since audiences are already aware of these movies, there is no need to spend money on promoting them because they have already been successful at the box office. For example, Netflix has been purchasing the rights to the majority of the Hindi, Tamil, and Telugu blockbusters, including RRR in Hindi.
According to Pankaj Jaisingh, CEO of UFO Moviez, Rocketry: The Nambi Effect, a movie that UFO Moviez released, must have made 30 to 35 percent of its money from ticket sales and the remaining money from the sale of online and television rights. But that entered because the theatrical release was the starting point, according to him.
A low or medium-budget movie’s theatrical performance nowadays is crucial. If it doesn’t go for a low price in a bundle of 5–10 movies, OTT platforms won’t touch it, according to him. However, opening a movie on the big screen is an expensive endeavour.
According to the head of a movie production business who asked to remain anonymous, most films budget between INR 5 and 10 crores for print and advertising expenses. When marketing expenses are included, non-production costs can make up about 25% of a film’s budget of INR 25–30 crores. The stakeholders question how a lesser movie with a budget of Rs 5–10 crores can even attempt to compete. OTTs pay you a fixed amount, but producers don’t pay for marketing. Because of this, OTTs advise going to the movies first, according to Jaisingh.
