Begin typing your search...

Will longer window for OTT premieres spell good news for box office?

If you want to stream that movie you've been waiting for, the wait just got a little longer. Exhibitors and producers have agreed on an eight-week gap between the theatrical release and the movie debuting on over the top (OTT) platforms.

Will longer window for OTT premieres spell good news for box office?

Will longer window for OTT premieres spell good news for box office? 

If you want to stream that movie you've been waiting for, the wait just got a little longer. Exhibitors and producers have agreed on an eight-week gap between the theatrical release and the movie debuting on over the top (OTT) platforms.

The pre-COVID OTT window of eight weeks will apply to Hindi and Hollywood films releasing after August 1, 2022, said a top official of multiplex chain PVR.

"Hindi films, which is our main source of content, and Hollywood, the second biggest, will follow a minimum eight-week (window). Hindi and Hollywood together comprise over 75 percent of films released in the PVR chain. Even dubbed versions of Tamil and Telugu will follow the eight-week window," said Kamal Gianchandani, CEO, PVR Pictures, and president, Multiplex Association of India (MAI).

Most of the content makers we spoke to agreed that people show urgency when there is a gap of 8 weeks between a theatrical release and OTT premier, said Amit Sharma, MD and CEO, Miraj Cinemas. Ek Villain (Returns) will be the last film which will have 4-week window, he added.

The gap between a film's theatrical release and OTT streaming reduced in the last two years due to the coronavirus outbreak which had resulted in the closure of theatres for many months. "Currently, it (the gap) is four weeks and it comes down to three weeks if the film is not performing well (in theatres)," said film producer and trade business analyst Girish Johar.

The four-week window became a bone of contention between exhibitors and film producers with the latter looking at an even shorter window to release films on OTT. Last year, the makers of Kangana Ranaut-starrer Thalaivii had decided to stream the Hindi version of the film on OTT two weeks after its theatrical release. However, exhibitors had decided to not release the Hindi version of the film in theatres saying that they had requested all studios, producers, artistes and other content creators to respect the theatrical window.

Film producers who suffered losses due to delays in theatrical release have been negotiating for shorter windows to strike a better deal with OTTs which in the last two years have offered 80-100 percent premiums for the digital rights of movies.

But now the four-week window is not sitting well with both exhibitors and producers. While the audience is stepping out to watch films in theatres, footfalls remain low and this is affecting the box office business, especially of Hindi films.

Box office impact

"The 15-20 percent box office revenue growth that we are seeing currently versus the pre-COVID level is largely due to ticket pricing. So close to 80 percent of the growth is led by ticket prices and 10-20 percent is because of footfalls. Footfalls have been impacted due to the (shorter) window. So the window going back to eight weeks will result in better footfalls," said Karan Taurani, senior vice-president, Elara Capital.

India's box office collections stood at Rs 5,565 crore in the first six months of this year versus Rs 5,153 crore in 2019. But the share of Hindi movies in this dropped to 35 percent from 44 percent in 2019.

Johar said that there is a certain section of the audience currently who are ready to wait as they know a film will soon stream on an OTT. "That's the reason we are seeing lesser walk-ins and that's why there have been drastic no big opening days." He said that the industry is extending the theatrical release window to give a film a chance to stand on its own, hoping the box office business will improve.

However, Gautam A Jain, partner, Ormax Media, a media consulting firm, said that the eight-week window for streaming release, while a welcome move, may not impact the fate of theatrical business of upcoming films. "Post-pandemic, what we are observing across languages is a trend where the audience is making up their mind whether to watch a particular film in a theatre or not right at the beginning of the film's campaign," he said.

Films that are seen as big-screen-worthy are opening to huge numbers and those that strike a chord have long runs in theatres, said Jain. "However, for films that don't fall under these two categories, irrespective of the marketing monies spent, the audience is not walking into cinemas to watch them. Changing the window from four weeks to eight won't be able to change much for such films," he added.

Not applicable to all

In addition, the eight-week window may not be followed across the board. "It will be better if we restrict the window to eight weeks but it depends on the filmmaker. We are still discussing whether it will be across the board. A lot of factors come into play like the story of the film and the deal structure with OTTs. The bigger films will be looking at an eight-week window," said Prerna Singh, CEO of Bhansali Production Private Limited.

Nowadays, filmmakers don't make films keeping only the box office in mind, said Akshay Bardapurkar, producer and founder of OTT platform Planet Marathi. "Makers focus on all streams of revenues and then they decide a film's release so that their basic investment is secured," he added.

Johar pointed out that films including Aamir Khan's Laal Singh Chaddha, Akshay Kumar's Raksha Bandhan and Ranbir Kapoor's Brahmastra are some of the films that will be following the eight-week window.

But films from the south may not be going back to the original window. "Tamil, Telugu films have different arrangements and they are negotiated with local exhibitors," said Gianchandani.

Taurani noted that the southern film industry is highly fragmented in terms of production houses and theatres. "Things will move there to an eight-week window but the movement will be slower," he said.

OTTs to spend less on movies

The return of an eight-week window is a healthy move for all, believes Johar. "When a theatrical release comes to an OTT, streaming platforms peg it to box office performance, which results in reduced marketing spends. Even the cost of acquisition will reduce," he said.

An official working with a streaming platform said that the platforms are okay with the OTT window going back to eight weeks as the risk and money involved will be less.

"With the eight-week window, one would expect to see a further correction in acquisition prices and even stronger correlation to box office performance in deal structure," said Jain.

Taurani added that premiums for digital rights will go back to pre-COVID levels with the return of the original OTT window. "Producers were getting premiums of 30-50 percent. Digital rights, which as a segment was growing 15-20 percent irrespective of the eight-week window, was earlier (in the last two years) growing at 40-50 percent (due to shorter exclusive windows)."

In 2020, digital rights grew to Rs 3,500 crore, 84 percent higher than Rs 1,900 crore recorded in 2019, according to an EY-FICCI 2022 report. The digital rights value is expected to see a 20 percent growth this year to Rs 4,800 crore versus Rs 4,000 crore in 2021.

"Till now, some platforms did pay a higher amount to prepone the streaming release for certain big films. However, we don't see this continuing in a major way going forward," said Jain.

Bizz Buzz
Next Story
Share it