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It’s curtains for videos as OTTs enter drawing-rooms

Movie-watching at home has changed over the years. Two decades ago, video cassettes were in vogue, thencame VCDs and DVDs, only to fade away.

It is now the reign of digital OTT (over-the-top) platforms, which were unheard of a decade ago. They are emerging the top option for watching movies at home or on the go, on mobile phones.

The home video segment, which contributed around 5 per cent to the total revenues of the film industry in 2009, accounted for 0.11 per cent of the total revenue in 2018.

Revenue earnings

A look at the figures of the Indian film industry shows that the total revenues increased from ₹8,930 crore in 2009 to ₹17,450 crore in 2018.

However, the share of the home video segment to the total revenue declined from ₹430 crore in 2009 to ₹20 crore in 2018.

A recent FICCI–EY Media & Entertainment (M&E) report for 2019 — A Billion Screens of Opportunity — attributed the decline in the home video segment to the increased consumption of content through digital platforms. It said that most films are released on Amazon, Netflix, iTunes and YouTube weeks earlier than on DVD, or simultaneously in digital and DVD formats. Owing to this, the home video segment has declined, it said.

These days, OTT platforms such as Amazon Prime, Zee5, and Voot, are also in a hurry to release movies within weeks of their theatrical release.

Digital rights

This has led to an increase in the share of digital/OTT rights in the total revenues of film industry. The film industry earned ₹850 crore from digital/OTT rights in 2017. The industry’s total revenue that year was ₹15,550 crore.

The FICCI-EY M&E report for 2018, titled Re-imagining India’s M&E sector, said that the advent of large OTT platforms in India such as Google, Netflix, Amazon, Eros Now and Jio Cinema, apart from the OTT offerings of various telecom companies, has significantly increased the demand for the digital rights of films.

It said that digital rights for a few popular films provide between 10 per cent and 30 per cent of their total revenues.

A year later, the share of digital/OTT rights to total revenue increased to ₹1,350 crore in 2018. That means around 8 per cent of Indian film industry’s revenue came from OTT platforms in 2018.The revenues from digital/OTT platforms grew by 59 per cent in 2018 over 2017.

Highlighting the outlook for the OTT sector, the report noted that India’s expanding OTT industry is hungry for content.

While there are over 30 reasonably sized OTT platforms today, this segment will see consolidation in the next three-four years, until which time content production houses will continue to benefit from the increased demand and higher rates, it said.

Source: The Hindu