Multiplex chain PVR on Wednesday said bypassing theatrical release of films does not make any "economical sense" for producers as this medium contributes up to 70 percent of the overall earning and they lose revenue by releasing directly on OTT platforms.
Moreover, the film producers also have to lose overseas collections and music rights of their films by releasing them directly on the streaming services, said PVR Chairman and Managing Director Ajay Bijli.
According to him, this is an exceptional period for the industry, when the screens are closed and hence some producers are deciding to release their movies directly on OTT (over-the-top) platforms.
"Theatrical revenues still contribute more than 50 to 70 percent of the overall pie of any content and after that only you are able to monetise content better, if you go to other platforms. I think there is too much stake to give up on these revenues and plus if you go to OTT straight away, you let go off your overseas collection and music rights," said Bijli in an investor's call.
This is a lot of sum to forego for many people, he added.
On some recent releases directly on streaming services and bypassing the traditional theatrical route, he said: "Because this is an exceptional period when such decisions are happening."
"Once we come back to normal, it just does not make any economical sense to go out and sell to OTT directly and bypass the theatrical window,” he added.
Recently, some producers decided to directly release their films on OTT platforms.
Amitabh Bachchan starrer "Gulabo Sitabo" is set to release on Amazon Prime Video on June 12. Besides some other films in regional languages are also being realised straight away on streaming platforms.
"India gets the highest number of movies made here and I am literally not just a blind optimist but very sure that this is an abortive period, cinemas are closed and producers are getting restless and some of them want to release their small movies just now," said Bijli.
It would not make any difference in the long run because there is too much stake in letting go off the theatrical revenues.
“It's in their interest as well, not only in our interest. This is exceptional period, we are shut and they need to monetise,” he added.
PVR CEO Kamal Gianchandani said that an overwhelming majority of the producers have decided to stay committed and have rescheduled their releases.
Bijli further said that PVR is also negotiating with the property owners and developers over the rentals till March 31.
Moreover, PVR, which operates 845 screens in 176 properties in 71 cities, is also trying to curtail operating expenditure as revenues are going to be subdued.
PVR reported a consolidated net loss of 74.61 crore for the fourth quarter ended March 2020, as the film exhibition business was impacted because of COVID-19.
Its revenue from operations was at Rs 645.13 crore during the quarter under review.
It has undertaken personnel cost reduction measures including “salary cuts across various levels” during the period of lockdown, “reduction in headcount by way of layoffs/retrenchment” and deferred increments to mitigate the adverse impact of COVID-19 on business.
Follow our full coverage of the coronavirus pandemic here.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
