Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo is all set to release directly on Amazon Prime Video on June 12. And this is not a one-off case as many other producers are exploring the idea of a digital premiere.
Even Nawazuddin Siddiqui’s Ghoomketu will release on May 22 on Zee5 while producer Anand Pandit is considering releasing his venture Chehre, starring Amitabh Bachchan, on a video streaming platform.
And this is just Bollywood. Down South and even producers of Bengali films are lining up their ventures for a direct OTT release.
These releases thus put to rest the debate over whether or not producers or studios should skip theatrical release and opt for a digital premiere.
While such releases are a big blow to the theatre industry, which shows no signs of resuming business anytime soon; for the film industry, digital releases are the silver lining in times of COVID-19.
Exhibitors have been urging producers to respect the 60-day window between a theatrical and an OTT release. Recently, Multiplex Association of India (MAI) had appealed to all content creators, producers, studios to support the exhibition sector by holding and releasing their films in theatres.
The MAI in its statement added that the combination of pent-up demand and new movies would boost film business and contribute massively in reviving the industry.
According to a note by Karan Taurani, Vice President, Elara Capital, the cost of production of Gulabo Sitabo is estimated at Rs 30 to Rs 35 crore and this is excluding promotional expense.
He estimates that OTTs that are acquiring films for direct to digital release may not be paying more than 20 percent to 30 percent over the cost of production.
OTTs also have limited budgets for movie acquisition, he said.
Yet he thinks that more small and medium size films will see go directly on digital platforms if producers are unable to hold on.
Along with digital rights, makers of Gulabo Sitabo can earn by selling satellite rights but this will be 50 percent lesser than the amount of digital rights as it is the second window.
"Overall Gulabo Sitabo will be able to make an ROI of around 40 percent to 50 percent," he said.
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