According to FICCI 2019 report on India’s media and entertainment sector, out of the total filmed entertainment revenues of Rs 17,450 crore in 2018, theatrical box office (domestic and overseas) contribution was 75 percent
While there is nervousness in the exhibition space after Reliance Industries (RIL) on Monday said it will simultaneously release films in fibre-powered set-top box, the theatre industry still believes that cinema is here to stay.
Talking to Moneycontrol, Amit Sharma, MD, Miraj Cinemas said, “Movies are meant for cinemas. It is larger than life for a larger screen. It is community watching. OTT is private watching.”
He added that cinema is also evolving in terms of technology and different types of format, which is difficult to get at home.
“The consumption story is growing and the more people consume videos the better it is for cinema. So, when larger than life films come people will turn to cinema. I look at it as everything co-existing together and cinema viewing will be the best medium to watch films,” he added.
During the annual general meeting on August 12, RIL announced that Jio customers will be able to watch movies in their living rooms on the same day these movies are released in theatres. The company plans to launch this service in the middle of 2020.
Rahul Puri, Managing Director, Mukta Arts, agrees with Sharma and believes that watching a film in the theatre will always remain a different experience.
“Even in more developed countries, with significantly higher ticket prices and more streaming options, theatres continue to find audiences and this is due to the fact that people love going to see films on the big screen. This move will not change that fact. There may be some readjustment but cinemas will continue to thrive even in this eventuality coming true,” he said.
He also pointed out that the industry is yet to understand much on pricing or the kinds of deals with producers that would make such an offering attractive.
He said that cinemas and OTT streamers came to an understanding of an eight week window between releases sometime back.
“This (same day film releases on Jio Fibre) would constitute an OTT release so it should fall under that guideline. Cinemas will move to protect their business if it is otherwise. Producers may lose in the bargain. There is much we still do not know,” said Puri.
According to Girish Johar, film and trade business analyst, if a producer is opting for a platform release (television or OTT) then he will be forgoing theatrical lion’s share.
Sharma pointed out that “in the exhibition space it is clear that if people want to release films on OTT or television they are most welcome but then we don’t screen those films. The content side of the people need to decide whether they want to screen their films only on television or OTT platforms or they want to have a release in cinema.”
This is why Johar thinks that the cinema issue will be a major issue. “In Hollywood also there have been fights. Theatrical share is much larger and everyone wants their film to be a bigger and wider experience.”
In a statement on Tuesday, multiplex chain PVR said that cinema exhibition remains the largest revenue contributor for the filmed entertainment segment.
"Theatrical and at-home are two completely different experiences and each has their own places. Both these experiences have co-existed and prospered for decades and will continue to so in future," it said.
According to FICCI 2019 report on India’s media and entertainment sector, out of the total filmed entertainment revenues of Rs 17,450 crore in 2018, theatrical box office (domestic and overseas) contribution was 75 percent.
In addition, India is a potential growth market for cinema exhibition as the screen density is lower. Hence, exhibition players are positive about expansion plans in the country for the coming years.
This is why Johar thinks that multiplexes will protest Jio's move.
According to him, RIL may air one film a week for its Jio Fibre customers. “They might also do it monthly so that their Jio platform remains attractive to customers.”
“Once in every six months or one year they may have a big release which is releasing only on their platform, maybe having an A-grade star cast and then mild releases like Netflix does, OTT kind of films which are premiered on Jio platforms,” he added.
But approvals of many stakeholders will be required to get this going.
So, if Jio plans to get Varun Dhawan and Sara Ali Khan-starrer Coolie No.1 which is yet to hit theatres, on its platform then they would have to convince the actors on how this will pan out in terms of viewership.
And an industry source who has been tracking film business for a long time said that if something like Coolie No.1 comes on Jio platform then that will be a game changer.
Johar believes that they (RIL) will do a mix of small and medium films and one big film a year they would take as they wouldn’t want to upset the ecosystem.
Multiplexes are an important revenue source for malls and due to malls the food and shopping business works. Hence, it would be a domino effect if theatre business is impacted, he explained.
Although there is not much clarity when it comes to content acquisition, there is surety that Jio will be offering original content.
“Jio is into making films. They have announced that by mid-2020 certain films will be released online. So, I am sure the films are under production stage by now," said Johar.
Therefore, times are exciting for audiences and content creators especially independent filmmakers and small and mid-sized ventures.
“It is good news for the audiences, producers and content creators. It is also pull up your socks time for Amazon and Netflix because then there is another competitor because it will be taking your potential content away.”Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.