Is digital-only release the way forward for small or medium budget films

Updated: December 16, 2019 11:40:12 AM

The Indian film industry produces close to 2,000 films every year, according to a FICCI-EY 2019 report

A digital-only release is favourable for filmmakers as it helps recover some costsA digital-only release is favourable for filmmakers as it helps recover some costs

By Moumita Bhattacharjee

While movies made solely for showcase on digital platforms is a trend that’s picking up globally, India has yet to latch on to it. Dharma Productions’ partnership with Netflix to premiere its movie Drive, starring actors Sushant Singh Rajput and Jacqueline Fernandez, could, perhaps, pave the way for more OTT premieres. The Kunal Kemmu and Ranvir Shorey starrer Lootcase is another film that is opting for a digital-only release.

A digital-only release is favourable for filmmakers as it helps recover some costs. A trade analyst revealed that Drive was made within a budget of Rs. 30 crore and sold to Netflix for approximately Rs. 25 crore. If the film had taken the traditional route — a theatrical release — Dharma would have spent another Rs. 10 crore towards promotion and distribution, scaling up the budget considerably. “So if the film hadn’t done well at the box office, the production company would have probably lost Rs. 12 crore; but on Netflix, the loss comes down to Rs. 5 crore,” explains the analyst.

What kind of movies would benefit most from a digital-only release? Could the lukewarm response — the kind Drive received — dissuade filmmakers from opting for OTT platforms as their exclusive distribution channels?

Money wise

The Indian film industry produces close to 2,000 films every year, according to a FICCI-EY 2019 report. However, a considerable number don’t get a theatrical release. In such a scenario, OTT platforms could emerge as potential alternatives, given their wide reach. Netflix, for example, has over 158 million subscribers in 190 countries. In India, the number of films watched per month per subscriber on the streaming platform has grown 50%, from January 2018 to April 2019, say digital analysts. Apart from reach, OTT platforms can also help production houses offset their losses.

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Preetham Daniel, senior VP, sales and marketing – Asia, Harkness Screens, cites the example of Saaho. “The film didn’t even make 40% of what was expected from it, given the budget and hype surrounding it. In such a case, when you have another platform for release, you will at least get the money back.”

The scale of a film or the production company behind a film decides the price Netflix or Amazon Prime Video would pay for perpetual rights. For theatricals, money dynamics change a great deal. Sanjay Mehta, joint CEO, Mirum India, explains, “For a theatrical release, there is a per screen cost of around Rs. 20,000, and then the local promotion costs. The receipts from ticket sales are shared between the government (taxes), distribution network and the producer. The producer may end up getting only 40-50% of ticket sale revenues.”

Drive isn’t the first to go for a Netflix release. Rajma Chawal, too, skipped theatres and streamed straight on Netflix from November 30, 2018. Tigers, a film featuring actor Emraan Hashmi directed by Danis Tanovic of No Man’s Land fame, released on ZEE5 instead of the theatres. Like Drive, it too was languishing in the cans for a few years before getting a digital-only release. Is an offbeat or non-mainstream movie more suited for OTT premieres?

Film trade analyst Girish Johar believes a digital release is a “good option” for content creators, digital platforms as well as the audience. “Rajma Chawal, for instance, probably didn’t have the budget to go for a theatrical release. When the film was released on digital, it got good reviews.”

Moreover, OTT also provides longevity to content, which is not the case with a theatrical release.


Even though some of the movies may not have garnered rave reviews, OTT players still stand to gain. However, the price they pay for the content — which is dynamic and based on their estimate of the value they can get out of it — will be a decisive factor.

“The best part about Netflix and Amazon Prime is that they work on a very robust recommendation engine. Hence, all kinds of movies are watched and liked by all kinds of people. One doesn’t always need mass movies to fare well on digital platforms,” says Madhura Ranade, head – branded content and partnerships, Isobar.

However, actors in India reportedly considering a ‘no digital release’ clause included in their contracts could throw a spanner in the works.

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