OTT New Revenue Model of Indian Entertainment Industry
On January 13, 2021, Vijay alias Thalapathy (the Commander) starrer Tamil movie ‘Master’ was released in theatres. The leading Indian OTT player Amazon Prime Video has approached the makers of the ‘Master’ not to release it in theatres but to stream it directly on their OTT platform. The Amazon Prime Video had offered the makers highly lucrative price for the same. However, the makers were firm about releasing the movie in theatres first. Usually, it takes some time to go for digital streaming of a movie after its conventional release in theatres. Based on the critical reviews of the movies and film expert’s opinion, Amazon Prime Video was determined to stream the Tamil movie on their OTT platform as early as possible. As per the rumors, the OTT company had struck a deal for staggering Rs 36 crore for the digital rights of the Vijay-starrer. However, the OTT company then came up with an offer to release the film early by offering another Rs 15.5 crore. Hence, Amazon Prime has paid a record-breaking Rs 51.5 crore for the digital rights of Master. This is said to be the highest-ever amount paid by any OTT company in India for a Tamil film. As per the sources, ‘Bigil’ another Tamil movie starring Vijay was sold to OTT player for digital streaming for a consideration of Rs. 18 to 20 crores.
This is really mind-boggling fact that OTT companies in India are making hail of money. We need to understand their revenue model. The main source of revenue for OTT companies is subscription money paid by the viewers. Of course, there are some OTT platforms which offer their services without any subscription, but then, they compensate it by intermittent advertisements during the movies, serials, news channels, cricket and sports steaming and other popular shows. These companies have to pay heavy prices for buying movies and shows to their producers. At the same time, they are earning well also by streaming contents of public demand. Some OTT companies are streaming shows and movies on revenue sharing basis.
Film Revenue from Digital Rights in India
Film revenue from digital rights across India from financial year 2017 to 2020, with estimates until 2024 are quite surprising. As per the reliable source, a total of Rs. 4.9 billion revenue was earned by selling digital rights movies to the OTT companies in India in the year 2017. This figure kept increasing continuously in the coming years i.e., Rs. 6.2 billing, Rs. 8.1 billion and Rs. 10.9 billion respectively for the year 2018, 2019, and 2020. The projected income form selling of digital rights of Indian movies is highly attractive. It is estimated that the Indian film industry will earn a revenue of Rs. 13.1 billion in the 2021 despite adverse impact of pandemic COVID-19. The same will increase up to Rs. 16.4 billion in 2022. It is further forecasted that revenue from OTT companies will grow up to Rs. 19.6 billion in the year 2023 and Rs. 23.6 billion in the year 2024. The actual revenue may be higher than the estimated one in the coming years.
Highest Grossers on OTT Platforms
The Filmfare official data reveals that despite adverse economic impact of COVID-19 on Indian film industry, digital right and online streaming on OTT platforms has saved the industry from economic jolts. ‘Laxmi Bomb’ was an ambitious project starring Akshay Kumar and Kiara Advani – a comedy horror directed by Raghava Lawrence. The movie was set for its release by the mid of April 2020 but could not go to theatres as it was nationwide lockdown period due to COVID-19. The producers made a deal with Disney+Hotstar to release the movie on OTT platform. The official record says that the movie earned an unprecedented Rs. 125 crores from a single OTT operator. Ajay Devgan starring ‘Bhuj: The Pride of India’ earned a whooping Rs. 110 crores by realizing the movie on Disney+Hotstar. Alia Bhatt, Aditya Roy Kapoor and Sanjay Dutt starrer ‘Sadak 2’ was released August 28, 2020, again during pandemic period, and it earned Rs. 70 crores from the OTT Disney+Hotstar.
Amitabh Bachchan and Ayushman Khurana starrer movie ‘Gulabo Sitabo’ was much awaited by the spectators but it could not be released in theatres just because of lockdown due to pandemic COVID – 19. Among all the Bollywood movies on Disney+ Hotstar, Netflix and Amazon Prime Video, this was the first mainstream Bollywood movie to be released exclusively on a digital platform. This movie earned a total of Rs. 65 crores from the digital platform. Dharma Productions’ ‘Gunjan Saxena’ featuring Janhvi Kapoor earned Rs. 50 crores by releasing it on Netflix. ‘The Big Bull’ – Abhishek Bachchan released on Disney+ Hotstar, ‘Shakuntala Devi’ – Vidya Balan released on Amazon Prime Video, and ‘Dil Bechara’ – Sushant Singh released on Rajput Disney+ Hotstar, earned Rs. 40 crores each. Lootcase and Khuda Haafiz could also do well and recover their production cost by releasing on Disney+ Hotstar.
Blockbuster Web Series on OTT
Sony Liv has carved a considerable market revenue in the OTT market by just one web series and that is Scam 1992 – the Harshad Mehta Story. People are mad after web series streamed on OTT platform. Theses series are full of innovations and unbelievable story plots. Manoj Bajpayee’s the Family Man on Amazon Prime Video has a large fan following. Spectators are glued to the screen watching their favorite web series. Mirzapur has broken all records of streaming on OTT platform. It would not be wrong to call Mirzapur as Bahubali of OTT platform. Patal Lok, Asur, Jamtara and Special Ops are some highly watched web series on Netflix, Amazon Prime Video and Disney+Hotstar.
OTT video streaming platforms have had a good run during pandemic times. Several VoD (Video on Demand) providers have registered an increase in not just usage and time spent on their apps, but also in the number of paid subscribers. Disney+Hotstar is the most subscribed–to OTT platform in India, owned by Star India as of July 2020, with around 300 million active users and over 350 million downloads. According to Omdia (which excludes subscriptions from bundled offers), as of December 2020, Disney+ Hotstar had 18.69 million subscribers, a big jump from 5.36 million in 2019. Amazon Prime Video had 5.83 million subscribers — up from 4.34 million in 2019 — while Netflix added more than a million paying users to reach 3.08 million subscribers in 2020. The subscriber count of Zee5 and SonyLiv stood at 2.7 million (up from 1.99 million) and 1.81 million (up from 6.5 lakh), respectively, in 2020. According to Disney+Hotstar’s India Watch Report 2018, 96% of watch time on Disney+Hotstar comes from videos longer than 20 minutes, while one–third of subscribers watch television shows. In 2019, Disney+Hotstar began investing ₹120 crore in generating original content such as “Hotstar Specials.” 80% of the viewership on Hotstar comes from drama, movies and sports programs. Disney+Hotstar has the exclusive streaming rights of IPL in India, which is one of the biggest sporting events in India.
It is for sure that Indian entertainment industry is going to be driven by the digital operators in the years to come. Customization of movies, shows, web series, sporting events and melodrama is on its peak as we have got larger group of viewers and subscribers. Revenue of OTT companies like Netflix, Amazon Prime Video, Sony Liv, Disney+Hotstar and Voot are increasing leaps and bounce. OTT platform has opened a new economic and financial dimension of Indian entertainment industry. The Government of India is cautious about the contents of OTT and, hence, the government brought the video streaming OTT platforms under the ambit of the Ministry of Electronics and Information Technology. The ministry is said to monitor the working of these platforms in the country. Additionally, it’s believed that the OTT platforms would have to apply for certification and approval of the content they wish to stream from the ministry. The Government needs to strike a balance between regulation and freedom of thoughts so far as the OTT platform is concerned.
(The writer is a Professor at Saurashtra University, Gujarat)