The three-month long closure of theatres due to the coronavirus-induced lockdown has resulted in many films skipping theatrical release and going straight to digital platforms. But is taking the direct OTT route viable?
It may be so for Janhvi Kapoor’s Gunjan Saxena - The Kargil Girl, which is the newest addition in the list of films that have taken the direct OTT route.
According to film trade analyst, Komal Nahta, Netflix has bought the premiere rights of the film for Rs 50 crore.
He added that Gunjan Saxena The Kargil Girl has been made at a budget of around Rs 40 crore. This means that makers of the film will get a Rs 10 crore profit.
Mark-up of more than Rs 10 crore for Gunjan Saxena
Along with the streaming rights, Zee Studios and Dharma Productions for their film have garnered Rs 9-10 crore from sale of audio and satellite rights, said Nahta.
The satellite right is with Zee, sister company of Zee Studios.
Now, if we add up revenue of rights for digital premiere, audio and satellite, Zee Studios and Dharma will earn a mark-up of Rs 19-20 crore, explained Nahta.
Digital premieres cap the amount of collection a movie makes
While going the digital way has been a profit-making deal for the makers of Gunjan Saxena, especially with theatres showing no signs of opening, a theatrical release would have meant more profits.
The fact that digital is an added revenue source for movies explains that for any film box office business is the primary and the biggest way to earn money.
In an earlier interview, Karan Taurani, Vice President, Elara Capital had said, “Many OTT’s don’t end up paying a mark-up of anything more than 20-25 percent to a producer which caps his income.”
Plus, small and medium-sized films have also scored a century or two at the box office.
Take the example of movies like Uri: The Surgical Strike and Kabir Singh. “These films could have never surpassed Rs 250 crore collection had they not released in cinemas,” Taurani had added.
While Uri was made at a budget of Rs 44 crore, Shahid Kapoor-starrer Kabir Singh’s budget stood at Rs 68 crore.
While experts say direct to digital release caps the amount of collection a movie makes even for some small and medium size movies, it has become need of the hour as holding a film for long is not viable for many producers.