REVENUE SCENARIO OF THE FILMS DURING COVID TIMES
An article by Tapas Banerjee
The year 2020 saw one of the biggest global shutdowns of the entertainment industry. India being the second-largest television market in the world with a large broadcasting and distribution industry with approximately 900 satellite T.V. channels, 6,000 multi-system operators, around 60,000 local cable operators, and 7 D.T.H. operators with 2,500 multiplexes across the country faced immense breakdown.
Unlike other sectors, Entertainment and Media industries have also faced unprecedented turbulence in the pandemic. According to F.I.C.C.I. and E&Y Report, the industry fell 24% in the pandemic.
As per the study by EY, the media industry would grow 25 percent this year to reach Rs 1.73 trillion, covering up for the loss suffered in 2020. The study says the market would cross the Rs 2.2-trillion-mark by 2023, growing at a compounded annual growth rate of 17 percent.
Industry players don’t have any other option except experimenting with digital and virtual space, giving new exposure to them.OTT entertainment platforms gain acceptance in Covid times.
Life has been marked as the ‘pre-covid’ era and ‘post -covid’ era when travel and other restrictions forced people to adjust to a new world and consumer behaviour is rapidly evolving. As a result, there is an ever-increasing demand for the O.T.T. platform, which is expanding to new demographics and locations. It coupled with the continued proliferation of internet users with cheap data and smart phones and led to a rise in subscriptions.Subscriptions for top O.T.T.s grew by 55-60 percent and many of them also made inroads into tier two, three and even four cities.
Given the current scenario, it is understood that the time is ripe for O.T.T.s, even in 2021 when people are still hesitant to go to theatres. The film industry went through an entire industry shift when O.T.T. platforms bypassed the theatrical release of a film and started releasing mainstream Bollywood films on their platforms. This trend is going to continue as people are still wary of going to the theatres
COVID-19 has left us with many questions about the present and future of the massive Indian film industry.
The Pre-Pandemic Era
The film industry is a huge part of the Indian economy. The past decade (2010-2019) has been nothing but glorious, witnessing a big leap in box office earnings with a 25.53% increase in 2019. The chart represents the film revenue generated from multiplex and single screen.
COVID-19 changed various dynamics of the industry. From the topsy-turvy journey of Bollywood through the pandemic to the rise of OTT, we have seen it all.
COVID-19: Derailed Films; A Catalyst for the Rise of OTT
The Indian Film Industry came to a standstill with filming delayed and cinemas shut in March 2020.
According to the EY-FICCI report 2021, the filmed entertainment segment dropped by 62% and theatrical revenues by 80% in 2020.
While the film industry was struggling, OTT platforms witnessed a never-seen-before boom. They jumped in at the right time and gained the digital rights of movies that were ready to hit the theatres, and bridged the gap left due to the lack of theatrical releases.
Chart forecasts the revenue that SVOD and Box offices may earn by 2024
Consequently, OTT gained 29 million paid subscribers in 2020. We noticed the shift with digital rights soaring to Rs. 35.4 billion, as per EY-FICCI 2021. OTT is gaining big with people embracing the internet.
From subscription-based models, pay-per-view to advertising-based video on demand, OTT offers various innovative pricing models. Some platforms like Disney + Hotstar and Zee5 are also offering hybrid models to customers.
Many SVOD platforms are trying out pack durations and sachet pricing models to make streaming affordable for customers.
India is home to the second-largest digital population. Its online video market has around 300 million user-base.
The platforms are keeping a major chunk aside for digital advertising. The players are investing heavily in acquiring new content and ramping up their content library for the audience.
Disney + Hotstar is leading the show with the highest-paid subscribers. The much-loved IPL marked its entry, and the paid subscribers reached 26 million.
The Road Ahead
The wave has begun and is going to move upwards. OTT players are leaving no stone unturned to make it big.
India is emerging as the world’s fastest-growing OTT market.
It is growing at 28.6% CAGR and might become a $2.9 billion market by 2024, as per PWC.
OTT is connecting with the audience via regional content as around 90% of people prefer to consume content in regional languages.
Our homegrown platforms such as Voot, SonyLiv, Zee5 are investing heavily in this kind of content, with Zee5 already streaming content in 12 regional languages.
Besides streaming movies, OTT platforms are creating binge-worthy original content. Around 220 original titles were released in 2020; the number is likely to go up to 500 in 2021.
The EY-FICCI report 2021 has estimated an investment of INR 19.2 billion in 2021. This number might increase to INR300 billion from 2021-2025.
The World of Coexistence!
Is the proliferation of OTT a threat to theatres? India is home to 40+ OTT platforms, creating content and acquiring film titles. While the OTT platforms are growing exponentially, the only concern is how they will monetize movies worth 100 crores?
While Theatres are a major source of revenue for a film, OTT platforms have certainly made watching movies convenient, the future is of coexistence. This may also result in a decline in the eight-week theatre window to maximize profits.
We strongly feel that this pandemic might lead to cutting down aggressive promotions, which once moved up to INR 25-30 crore. Now, the marketing budgets are likely to decline by 20%-30%.
Talking about PVR, the company had to uphold its cash flow commitments and deferred some of the developments after the lockdown.
. The only way to survive for all is to change with times and keeping your liquidity in check to keep up with these innovations.
A Film Entrepreneur, Festival Curator and Film Critic more than two decades.