Revival For Survival: An Overall Overhaul For Indian Film Industry

The lockdown extensions have had a cascading effect on the filmmaking ecosystem in India, one of the largest film producing nations in the world, leaving the exhibitionsector in a limbo, and accelerating the number of direct-to digital movie releases on streaming platforms 

# SUPPORTMOVIETHEATRES. #SAVECINEMA. In the era of hashtags, social media and Covid-19, the Indian film fraternity is making earnest strides to get the badly-hit movie exhibition sector, which employs over 200,000 people directly and accounts for nearly 60 per cent of film business revenues, and the production business, back to its feet. What is happening in the interim is speeding up a tectonic power shift of screens in the country’s Rs 1.82 trillion media and entertainment landscape, on the back of disruptive and engaging content.

A nationwide lockdown, implemented by the Indian government in March 2020 to guard people against the novel coronavirus, meant a stop on all outof- home entertainment activities. Film shootings came to a grinding halt. Postproduction activities were held up. Some films awaiting a green light were shown a red light. Film workers, especially junior artistes, technicians and daily wage workers, were out of work. Reverse migration ensued. Film theatres were shut. And homebound consumers, with or without a cinema going habit, increasingly began to sample, subscribe to and explore content across as many as 40 digital streaming avenues, which made some quick decisions and investments to ensure a steady flow of fresh offerings to keep their patrons engaged.

For a country with a population of 1.3 billion, an estimated number of 100 million movie-goers, an under-screened market with around 9,500 screens, a growing number of smartphone users, over 600 million Internet subscribers, insatiable appetite for quality entertainment, an evolving digital payments infrastructure, and affordable subscription costs, the democratisation of screens through OTT (over-the-top) platforms, has emerged as a win-win for all associated stakeholders.

Exhibitors across the country, and the Multiplex Association of India, had made their dissent clear when a set of films locked deals for a direct-to- OTT release in the initial months of the lockdown

OTT vs Big Screen Experience

But with more than 20 films, including a mix of titles such as Amitabh Bachchan and Ayushmann starrer Gulabo Sitabo, Akshay Kumar’s Laxmmi Bomb, Ajay Devgn’s Bhuj - Pride of India, Vidya Balan-led Shakuntala Devi, Bhumi Pednekar’s Dolly Kitty Aur Woh Chamakte Sitare, Janhvi Kapoor’s Gunjan Saxena: The Kargil Girl, Suriya starrer Soorarai Pottru, Kunal Kemmu and Rasika Dugal’s Lootcase and Adil Hussain’s Pareeksha taking the direct-to-digital route (with deals running anywhere between a speculated Rs 35 crore to Rs 150-plus crore) in the absence of the ‘big screen’ experience, a big question doing the rounds in the media is: Do OTT platforms have the power to cannibalise the business of theatres?

The charm of theatres, with a community viewing experience, will never fade away, many may argue. But “this is not a competition,” says Carnival Cinemas’ Managing Director PV Sunil. “Content will be tailormade as per platform. There are some of them which can be sold to OTT platforms, but not all movies of all sizes.”

At the end of the day, the film industry and video streaming platforms have one common goal — entertainment, avers Aparna Acharekar, Programming Head at ZEE5 India, which has launched around 15 direct-to-digital titles across Hindi, Tamil, Telugu and Bengali, during the lockdown. “While there are a number of movies which are blockbusters and made it to TV and OTT after releasing, according to a certain agreed timeline, there are many films that were probably only restricted to film festivals, but have a new way of reaching consumers now through OTT, not only in India, but across the world. In my view, like we have in the past, the film industry and OTT will co-exist,” Acharekar adds.

When Uday Shankar, President, The Walt Disney Company APAC and Chairman, Star & Disney India, announced the launch of Disney + Hotstar Mutiplex — with the premise of First Day First Show Ki Home Delivery — back in June, he made a pertinent point. “Theatres will always be a special experience. But the potential of the industry can’t

be capped by the number of release windows and theatres available,” he explained, adding that, “We should not see this as a short-term tactical compromise. We should see this as a very big leap for the industry.”

That it is — from the standpoint of job creation, investment, an increasing talent pool, reach, content proliferation in terms of style, quantity and quality as well as across languages and geography, and ease of consumption. JioTV+ is bringing further ease for consumers by offering services that includes access to 11 streaming services for Rs 999 and to 12 streaming services for Rs 1,499 per month. However, when it comes to the tilt of audience interest towards OTT platforms as of now, industry insiders say, “It’s a phase. And this too shall pass.” 

The Revenue Rationale

Ajit Andhare, Chief Operating Officer, Viacom18 Studios, describes the current scenario as “interim relief ” for the industry and believes that in a multi-billion-dollar industry, the first responsibility of stakeholders is to try and protect the annual revenue stream. “If that means that you require patience and you require holding out your films for a certain period to ensure that that model survives, I think that’s what everybody (those with big films) is trying to do. Nobody wants theatres to suddenly become irrelevant,” he says, referring to films waiting for a theatrical release.

Exhibitors across the country, and the Multiplex Association of India, had made their dissent clear when a set of films locked deals for a direct-to-OTT release in the initial months of the lockdown. They urged filmmakers to respect the “time tested” exclusive theatrical window system.

Back then, the question really was how long would the wait last. Even today, considering that everyone everywhere underestimated how long the lockdown and its aftereffects will play out, the question remains. Plans and budgets are being redrawn, revaluated and re-imagined at every level of filmmaking, with every passing week or month.

Reliance Entertainment especially, apart from distressed exhibitors, had its hopes pinned on the Unlock 4 guidelines for a green signal on reopening of cinema halls. The banner was hopeful of releasing its much-awaited, big-budget entertainers ’83 and Sooryavanshi on the big screen, on Diwali and Christmas respectively. But the government has yet to allow cinemas to reopen.

Shibashish Sarkar, Group CEO, Reliance Entertainment says that even to release a movie on Diwali which falls in mid-November, there needs to be clarity around resumption of movie halls by October to get at least a one-month window for promotions. In the event that doesn’t happen, he says, “I’ll definitely engage in a discussion with my director and actor about whether they are open to the idea or if they will support a digital release or not. One cannot wait indefinitely. We don’t mind waiting a little more if we have clarity, but there is a lot of uncertainty at the moment.”

AT A GLANCE

The Indian filmed entertainment sector grossed Rs 191 billion in 2019. The earnings were poised to grow to an estimate of Rs 206.7 billion in 2020, which has turned out to be a near-washout year.

At least 20 films originally meant for theatrical release have bypassed the industry norms and release directly on digital platforms. This may set the stage for an evolved ecosystem, where segregation and segmentation of content may become more pronounced.

The spike in interest in releasing films directly on OTTs is a phase that will pass, but co-existence of theatres and streaming platforms will continue: Experts

The revenue may become slightly difficult to compute in the absence of box office figures: EY India expert Content will remain the king. And while quantity of content will rise, there will be more emphasis on quality.

“India has content to cater to all — from an OTT giant, to a dedicated platform for cinephiles or to big screen of theatres”  GUNEET MONGA, CEO, Sikhya Entertaiment

Exhibitors on the Edge

It is this very uncertainty that is sucking exhibitors out of positivity. Sanjeev Kumar Bijli, Joint Managing Director, PVR is confident that the audience, tired of being confined at home, will step out to watch films in theatres eventually, with a vengeance, even if the business has a slow start.

Sunil of Carnival Cinemas, which is staring at an estimated loss of around Rs 110 crore in FY2021, rues the burden of fixed operational costs, including rental, manpower, maintenance and more, against the current zero revenue for theatres. But he’s keeping his fingers crossed that even though theatres will be allowed to run on a capacity of 50 per cent or less initially, “People will begin to get over the fear factor slowly. Even content will gradually flow in. A start has to be made now.”

While single screens and multiplexes are waiting it out, there’s heightened chatter around drive-in cinemas coming up in India once again. Preetham Daniel, Executive Vice President-Asia, Harkness Screens, says, “Drive-in cinemas can bridge the gap in the industry where cinemas are closed and content is available to be showcased. They will bring people out of homes in a safe environment and kickstart the industry that has been dormant since March.”

For now, a silver lining can be found in the box office performance of Christopher Nolan’s Tenet, Hollywood’s first box office release in the pandemic era, which opened with an estimated $53 million in overseas markets even before releasing in the US and China. This gives Sarkar the confidence that in a film-loving nation like India, wooing the audience back into theatres won’t be a huge challenge.

In the meantime, Hollywood has led the way for new ways. Disney released a big film such as Mulan via a premium transactional video on demand (TVOD) model. Will India follow suit for any big titles?

While companies such as Shemaroo Entertainment and ZEE have already announced such services, Andhare feels such efforts may not immediately catch up in India, given that people value the theatrical experience more, but adds, “You never know.”

“These things are a matter of one deal. And who knows there may be some more aggression from streaming platforms that would be willing to invest more money than they would have offered ever before, and that might change the opinion for people who are holding the films? While for some at one end of the spectrum, it is a tough time, at the other end of the spectrum it is time to make a completely new play as well,” he adds.

For now, the lack of clarity has already led to the pushing of some of Bollywood’s big ticket films, including Akshay’s Bell Bottomand Raksha Bandhan, Ajay’s Maidaan, Aamir Khan’s Laal Singh Chadha and Salman Khan’s Radhe, from the 2020 to the 2021 release calendar. Some, as mentioned earlier, have made it straight to OTT.

All in all, 2020 is being described as a “washout” and “wipeout” year, where six to nine months of operations have been lost straightaway. That has been a big blow to the industry, which was poised to grow to an estimated Rs 206.7 billion, according to Rakesh Jariwala, Partner - EY India.

In 2019, the Indian film segment grew 10 per cent to Rs 191 billion, driven by growth in theatrical revenues and both rates and volume of digital/OTT rights sold. As many as 17 Bollywood films made it to the Rs 100-crore club. Six made it to the Rs 200-crore club.

And so, it doesn’t seem an exaggeration when trade analyst Taran Adarsh says, “If 2019 was a dream, 2020 is a nightmare.”

“It has been a disaster year for the film industry. Things (cinema halls and shootings) need to open up (properly) for anything to be done. Otherwise what happens to those films which are complete or on the verge of completion, or which are half complete?

Everything has gone for a toss. Losses are only mounting up with every passing week. We have lost out on at least Rs 4,000-4,500 crore as far as Hindi films are concerned,” says Adarsh.

A few industry experts estimate losses to the tune of Rs 5,000 crore and Rs 7,000 crore, or even more, for the Indian cinema market, which is as multilinguistic as the country itself. Various trade sources point that the southern film industries are facing upwards of a Rs 500 crore loss.

Trade analyst Girish Johar says the losses are hard to be ascertained in an unorganised sector, but they have been huge and manifold, considering that every stage of filmmaking — from conception to delivery — needs a lot of hands on the deck.

Focus on Content

A positive outcome of the entire scenario is the focus on content, diverse and disruptive in all its glory.

The fact that streaming platforms are also helping the creative ecosystem build new muscle is something that excites Vijay Subramanian, Director & Head, Content, Amazon Prime Video India, who considers it both a challenge and opportunity.

As far as the power shift in screens is concerned, he says that has been happening for the past four years. But it only feels a lot more magnified at this point because theatres have been temporarily made unavailable.

“The power of consumption of entertainment and choice of what and where to watch content has been in the customers’ hand always, and will continue to remain so in the future,” says Subramanian, who feels feels the OTT window has made regional more ambitious with their cinematic vision. Segmentation and segregation of content will become more visible in the industry in times to come.

EY India’s Jariwala believes more event and extravagant films, like the Hollywood tentpoles, will attract the audience to big screens going forward.

While the OTT bigwigs of Netflix, Amazon Prime Video, Disney + Hotstar, SonyLIV, ZEE5, Eros Now, Voot, ALTBalaji, MX Player continue to grow, the entry of MUBI in the Indian market to offer hand-curated films on demand, the launch of cinemapreneur — an avenue for independent filmmakers, of ShemarooMe Box Office — a platform for releasing new movies directly on digital with a pay-per-view model; are all cases in point of the growing segmentation within the ecosystem.

Oscar-winning producer Guneet Monga, CEO of Sikhya Entertainment, notes that with digital space in India growing exponentially (digital overtook filmed entertainment to become the third largest sector of the media and entertainment industry in 2019), more and more players are looking at India as their potential market.

“Indians have access to data, unlimited to add to it, and with better exposure, the audience here is getting to watch global content. This is creating the demand pool in India which so far has been looked in context of mainstream Bollywood aka Hindi film industry. 1With more exposure, we have seen growth in business of regional cinema within

the country as much as we have seen hearty reception of international titles on leading OTT platforms,” says Monga, an active supporter of independent cinema, and also a coproducer of Soorarai Pottru, one of the big  Tamil films which has been released directlyon OTT.

As a filmmaker, she believes, “Not every piece of content is meant for a Rs 100-crore box office, just like not all films are meant for festival runs. I believe these platforms add to the much-needed diversity as India has content to cater to all — from an OTT giant, to a dedicated platform for cinephiles or to big screen of theatres. I feel we are in the middle of a cinematic revolution.”