OTT may harm film exhibition business in the long run

With one film after other being rushed to the over-the-top (OTT) platforms for screening, it looks like the Covid-19 pandemic might have taken the film exhibition sector by surprise.

India has been among the fastest-growing place for the OTT platforms as the Covid-19 pandemic has pushed adoption of digital significantly in the last one year.

However, people in the know of the trade believe that cinemas will continue to remain strong in India and other markets within the Asia-Pacific (APAC) region.

This stands in contrast with the trend that prevails in the West where the influx of digital platforms such as Netflix has been stronger and OTTs now are big players in these markets.

"Cinemas remains an outing and socialising trend in Asian countries such as Singapore, Taiwan, China and India. This means there is relatively low or no threat of OTTs to cinemas unlike in the US and UK where the OTT trend is stronger.

Already, 88 per cent of screens in the APAC region have reopened following the pandemic and lockdown while 38 per cent screens in the US and 24 per cent in Europe Middle East Africa (EMEA) have yet to reopen.

Of the 9,600 screens in India, 70 per cent are single screens and 30 per cent are multiplex screens. But multiplexes earn more than half of India’s theatrical revenues thus putting pressure on them to ensure fresh content keeps coming in for footfalls to grow.

Multiplex operators argue that the 50 per cent seating cap is a challenge and should be lifted for the exhibition business to bounce back to normalcy. Fifty per cent capacity is difficult to sustain, say many exhibitors in one voice.

Theatres in Tamil Nadu (TN) have announced that it would permit 100 per cent occupancy in theatres. This has raised concern over an increase in Covid-19 cases prompted the Ministry of Home Affairs (MHA) to write to the state government to revoke its order. Today, the TN government withdrew its permission for the same, though additional shows have been allowed.

Audience turnout is crucial to most exhibitors, since their discussions with film producers hinge on how many people will make their way to cinemas to watch their movies. This is because around 40 per cent of a film’s revenue comes from the box office, which is, in turn, dependent on footfalls and ticket price.

While the regional movie markets including Bengali and southern are seeing the release of blockbusters as movie-goers slowly make their way back to theatres, it is Bollywood that is yet to come out with its slate of big films for the year.