With digital emerging as a distribution channel for movies, does TV stand to lose?
From waiting for a high-profile blockbuster to ‘premiere’ on TV to now waiting for it to get added to Netflix’s or Amazon Prime Video’s library, the way consumers are watching recently released films has evolved. And so has the business of acquiring the rights of these movie titles.
According to EY report A Billion Screens of Opportunity, the broadcast rights market grew from Rs 1,900 crore in 2017 to Rs 2,120 crore in 2018, while the digital rights market grew from Rs 850 crore to Rs 1,350 crore. At times, digital platforms are able to showcase the film well before its cable and satellite premiere. The satellite rights for Padmaavat were sold for Rs 80 crore, and for Sanju at Rs 50 crore. On the other hand, the digital rights for Padmaavat were sold at Rs 25 crore to Amazon Prime Video; and for Sanju at Rs 20-25 crore to Netflix. Yash Raj Films has reportedly sold the satellite and digital rights of Thugs of Hindustan to Sony Pictures Networks and Amazon Prime Video for Rs 60 crore and Rs 70 crore, respectively.
As per the EY report, Amazon Prime Video is aggressively expanding its Bollywood premiere list; it bought rights for 13 of the top 25 box office films released between June, 2017 and June, 2018. During the same period, Netflix bought rights for four big box office Hindi films including Pad Man and Andhadhun, while Zee5 bought the digital rights of six films.
Vijay Subramaniam, director and head, content, Amazon Prime Video India, says, “Indian audiences across segments like to watch movies, and it is important for us to provide them the latest release. We are constantly in touch with our consumers through research and social media, which helps us make a decision on what kind of films or content they want to watch.” Amazon Prime Video added five Bollywood films — Gully Boy, Kesari, Manikarnika: The Queen of Jhansi, Thugs of Hindostan and Photograph — between January and May, 2019. Some of its regional film acquisitions include KGF (Kannada), Lucifer (Malayalam), Saheb (Gujarati) and Viswasam (Tamil).
As the consumption on OTT grows, the acquisition of digital rights for movies will grow further. Although television offers the benefit of greater reach, OTT platforms give filmmakers the opportunity to tap a new set of audiences.
“Movie premieres play an important role in our overall content catalogue. They not only drive consumption, but also bring in fresh users,” says Manish Aggarwal, business head, Zee5 India. Zee5 recently acquired the digital rights for Veere Di Wedding, Parmanu: The Story of Pokhran, Uri: The Surgical Strike and Simmba, among others. Besides, being a part of ZEEL which has movie channels such as Zee Cinema, Zee5 has the advantage of landing satellite-digital combo deals.
Matter of scale
While it may seem that the increasing incidence of digital premieres could affect satellite rights acquisition costs, it hasn’t; movie channel viewership has remained intact.
Jehil Thakkar, head, media and entertainment, and partner, Deloitte, says there is no evidence of this affecting advertising rates of movie channels. “That situation is a while away, as digital has to become more broad-based. Big budget films still get high viewership on television, and are key to programming. The reach of television is much higher than that of digital.”
For movie production houses, a digital premiere is primarily governed by the monetisation aspect. Ajit Andhare, COO, Viacom18 Studios, says, “If OTT platforms are paying production houses a premium for giving them a window of time ahead of the satellite premiere, then studios will look at maximising total revenue.”And the reverse would hold true as well: if a satellite channel pays a premium to acquire a film ahead of the digital platform, then the production house could opt for this.
The footprint of digital streaming and cable television is incomparable. Paritosh Joshi, principal, Provocateur Advisory, explains that a movie aired on cable television will produce 10-20-times more impressions than on an OTT platform. “The scale on which satellite channels and advertising operate is far higher than anything that OTT can offer. I don’t think OTT represents any kind of diminution in the advertising opportunity for broadcasters on movie channels,” he adds.