What does an eight-week theatrical release window mean for OTT platforms?

The Telugu Film Chamber of Commerce (TFCC) and the Active Telugu Film Producers Guild (ATFPG) announced that all films will be available on OTT streaming platforms only after eight weeks of theatrical release. Not only that, but the producers agreed to revise their existing contracts to comply with the new rule.

"We have decided to extend the OTT release window to eight weeks. Following that, all filmmakers will abide by this rule, and there is no question of breaking the agreement. We are also pursuing existing agreements and, if necessary, will change the terms and conditions immediately," Dil Raju, president of the Active Telugu Film Producers Guild, stated.

Raju equally emphasised the importance of regulating ticket prices as well as food and beverage prices at multiplexes. "We have requested that all of the multiplexes make all of these things at reasonable prices."

He added that the TFCC has taken steps to lower the spiralling production cost without compromising the quality. "The Movie Artist Association and TFCC agreed to reduce the increasing production costs and have decided to continue shooting activities within the stipulated budget thus giving no room for wastage of funds or resources."

The producer said the demands of the Telugu Film Workers, including the salary hikes, were agreed upon in the meeting. "We have agreed to give a hike, but we are yet to ascertain the modalities and we will be closing this issue soon after completing a dialogue with the workers' unions. The shootings will resume shortly and we will announce all those details in another meeting soon," Dil Raju observed.

Impact on OTT platforms

The members of Tamil Nadu Theatre and Multiplex Owners Association (TNTMOA) also previously demanded that the films of big actors should release on OTT platforms only after 8 weeks of running at theatres. The gap between a film's theatrical release and OTT streaming has narrowed in the last two years as a result of the coronavirus outbreak, which forced theatres to close for months. For now, the gap is four weeks. Film producers who suffered losses due to theatrical release delays had been negotiating for shorter windows to strike a better deal with OTTs, which have offered 80-100 per cent premiums for movie digital rights in the last two years.

The four-week window became a point of contention between exhibitors and film producers, with the latter aiming for an even shorter window to release films on OTT platforms. It is a myth that OTT platforms and cinemas are competing against each other. There is enough content on both, so they can co-exist. 

Impact on theatres

Eight weeks is a significant period. Previously, consumers would have to wait for it to be available on OTT. They will, however, now go to the movies. It is a positive step for exploratory and large-scale content, as well as for cinema attendance. Everything becomes measurable through the box office records. When a film does well in cinema, it can ask for a good price for digital and satellite rights. On the other hand, since OTT platforms don’t share numbers, there’s no way of knowing how a film has performed.

According to Shailesh Kapoor, Founder & CEO of Ormax Media, a media consulting firm, OTT rights is sold at a fixed price with no link to the performance of the film. "For a direct-to-OTT release, OTT rights will account for nearly all of the revenue (80%), while satellite rights may contribute 15-20%, depending on the film," he explained.

Increasing audience base

2020 was an important year for OTT platforms. Many new films chose an OTT release over waiting for 'normalcy' to return. This model received international support. Because of the sheer number of good, competent, and thoughtfully written shows on display, the past couple of years had been better for the Indian web series. When there is far too much content to make sense of, curation reigns supreme, and this could prove crucial in the 2022 streaming wars.

A serious competition

OTT platforms see this as a potential to expand subscriptions, and they see themselves as competing with one another rather than with exhibitors. If they gain more subscribers, they will be able to keep them permanently, as well as the fact that yearly subscriptions do not add up to a large sum. Notably, the OTT industry is still in its infancy in terms of paid subscriptions.

Money, honey!

Pay-per-view is well-known in international markets such as the United States, Australia, Hong Kong, and Singapore. Disney, for example, recently announced that its big-budget film Mulan will be released in theatres on September 4. It also stated that the film will be available to Disney Plus subscribers on the same day for $30. So, an Indian producer, whose films are also stalled due to the five-month theatre shutdown, takes advantage of this opportunity? Given the growing competition in the OTT space, it is vital to remain relevant and meaningful. Content with a purpose can cross borders, spread values, knowledge, and hopefulness, and nurture deeper engagement with subscribers. This trend will be a differentiator in changing behaviours.

Crossover content

The OTT medium has significantly broken down the language barrier, and with dubbing and subtitles available in many languages for all major shows and films; platforms can no longer stick to a single language. With increased smartphone adoption and more affordable data, OTT mobile penetration receives more attention. Furthermore, the arrival of 5G, which is expected to take off this year, will be a game changer not only for OTTs but also for consumers. It will enable faster connectivity, with less buffering and an uninterrupted real-time streaming experience.