MUMBAI: A number of countries have come to a standstill along with major industries as the number of COVID-19 infections keeps increasing unabated. Theatres across India have shut down amid a 21-day-long lockdown and scheduled film releases in the country too are cancelled. Since the theatrical window is now a closed option, some of the producers and distributors might look at streaming platforms for an early release. Many major Hollywood studios have decided to make their movies available on streaming services in the US. Will India follow the pattern? Not immediately.

The economics of movies are far from simple. Production budget is not the only major investment for a movie and ticket sale is not the only source of revenue anymore. Hence, experts believe that large-scale films in India will wait for this crisis to get over to have a proper theatrical release but mid-scale or small-budget films have higher chances of looking at streaming releases.

SBICap Securities institutional equity research head Rajiv Sharma says that  some of the movies which are ready to release and can not be released may find themselves with OTT names. Sharma says if this lockdown is beyond 14 April, producers and distributors will need liquidity, particularly the regional film makers as they will  need to pay stuff, production costs. Hence, he thinks as such something needs to happen there.

Elara Capital VP – research analyst (Media) Karan Taurani thinks only the smaller-budget films of Rs 10-15 core range might come but larger-budgets will still wait for theatres to open. He thinks  large-budget films will not come directly to TV or digital because the economics is very different, and too much money is at stake. Moreover, if budgets are very high, digital or satellite would not be able to compensate that budget.

“OTT players, especially deep-pocket ones like Netflix and Amazon, will be willing to  pay for such movies as they are building their local /regional content libraries. This is a time to build that loyalty but the problem is Netflix or Amazon may find it easy but for other broadcasters who also have their OTT business may find it tricky given sharp pressure on the ad revenues on the TV side of the business. Nonetheless, they will attempt to pick a few, at least on the regional side, if possible,” Sharma adds.

During the lockdown, over-the-top platforms have already emerged as beneficiaries as viewers now don’t have any other option of entertainment. Some of the major platforms even have pushed a few premium content for free. While content-driven digital-only films are already turning out as big trend, the platforms might even look for direct releases of the ones which have postponed release for indefinite time. According to the FICCI-EY 2020 report,  the filmed entertainment segment grew because of increased domestic theatrical revenues and growth in both rates and volume of digital rights sold. Digital rights continued to grow in 2019 with an increase in revenues from Rs 13.5 billion in 2018 to Rs 19 billion in 2019. Considerably, around 50 films made direct debut on digital platforms.

Taurani mentions that it all depends now on how many cases develop in the next 15 days and that is the deciding factor. Also, we have to see if people will move out or the government doesn't lift the lockdown. He also cited the example of China which has opened around 1000 screens and they have slowly started revising the ticket prices downwards to motivate people to come to cinemas.

Until there are no cases of infection or proper clarification that cases won’t rise in india,  people will probably have second thought about going to the cinema. According to him, the occupancy of cinemas, which operates 30 per cent for the multiplexes, wil get at 8-10 per cent for start which will also lead to losses.

“Low-cost producers will be more interested in releasing on streaming platforms. Other than that, if they can get at least Rs 50-60 crore, they won’t mind. Later, they can even go for a theatrical release for lower but additional revenues,” Sharma states. Taurani is of the view that small-budget films will be able to easily recover the cost.  

Members of the producers' guild, however, refused to comment when reached.

Big films like Sooryavanshi have postponed their releases in this unprecedented situation. Theatres across the country did not have to shut down for such long time except during the 1984 riots. As the media and entertainment industry is now in uncharted water, there are several pressing questions which will need more time to be answered.