Direct-to-digital is the new buzzword of the entertainment industry and also the cause for the pandemic-driven cultural casualty. The Oscars have made a one-time exception of including digitally-streamed films as nominations for Best Picture. Trolls World Tour also premiered on the digital platforms and ended up being more successful and profitable than its prequel. With buying direct-to-digital rights and evading theatrical release period for seven star-studded films, Amazon Prime Video, the e-commerce giant’s VoD franchise, has instilled and infused this trend with Indian cinema. Though borne out of compulsion, this strategy has been detested and deplored by PVR and INOX, two extremely successful movie theatre chains in the country. Hence, cultural casualty aptly elucidates the shifting of cinemas, musicals and museums live-shows to a digitalized endeavour.
The extending, expanding and perpetuating lockdowns have crippled economies and brought life to an absolute stand-still. They have impacted emerging economies, destroyed various start-ups and tarnished the hyper-globalized service undertakings. This has similarly crippled the entire film industry. Due to restrictions in movement, the production of new content has halted. After the initiation of premieres on OTT platforms, exhibition, retail and distribution are now denied with the availability of content.
Theatrical releases will always yield wider revenue opportunities than that accrued from OTT platforms. The new 100 crore club, usually seen as an extension of the old lexicon diamond jubilee, is a testament to the revenue amalgamating power of blockbuster films on bigger screens. However, desperate times have always called for desperate measures. In a country with lower screen penetration, both multiplexes and single-screen theatres are going to be adversely affected by the alternating lifestyle post-COVID-19. It is expected or speculated that the leisure and luxury of cinema will become a more expensive endeavor.
Currently, most of the multiscreen or multiplexes are located within shopping malls, with sumptuous rental space. With stringent lockdowns and the absence of any ease or relief by the government, managing staff and aiding recurrent expenditure have deteriorated the situation. Simultaneously, most cinema-goers hail from tier-I&II cities, the current hotspots for the virus. Hence, the possibility of content consumption within a closed auditorium doesn’t paint an ideal scenario. As powerful distribution houses such as PVR and INOX support most multiplexes, having certain market holding to remain afloat for the few coming months, seems plausible. However, with the existing dilapidated state of single screens, they seem closer to closure in metropolitan cities after the pandemic.
As powerful distribution houses such as PVR and INOX support most multiplexes, having certain market holding to remain afloat for the few coming months, seems plausible. However, with the existing dilapidated state of single screens, they seem closer to closure in metropolitan cities after the pandemic.
To restart the industry and normalize operations, cinemas are pushing for recommencing their operations. The Multiplex Association of India has produced an advisory entailing - seat distancing and reduced occupancy, sanitizing and disinfecting auditoriums between shows, body checks with infrared scanners, availability of masks, hand sanitizers and PPE kits for purchase, single-use 3D glasses, etc. This could levy heavy infrastructure and additional expenditure, which roughly translates to an escalation in ticket pricing. With cinemas restrictions of one person per sq. meters and maximum of 20 people per show in Australia, the operators puzzle with profitability and economy of running showtime for lesser than 50% of occupants. With some temporary and lasting changes being implemented, it is blindly assumed that with relaxations the audience will conveniently return to cinema halls.
According to Acuité Rating and Research firm, a reduction in footfall up to 50% is expected in multiplexes. Performance Research in partnership with Full Circle Research Co. conducted a few surveys to monitor public perceptions towards public events and large gatherings -- 70% would prefer remaining indoors even for content consumption. These numbers have witnessed constant escalation from 44% in early March to 52% after the declaration of a pandemic.
With the bleak viability of physically distanced cinema halls and curtailment in available content, direct to digital seems the most obvious choice. However, certain tweaks in the current business model, collaboration between OTTs and the exhibition industry and the possibility of drive-in theatres movie franchises or pay-per-view modalities could be explored.
With cinema halls considering revamping and tweaking their models on the basis of the pandemic and physical distancing, the option of drive-in cinemas appears plausible and viable. It has been an extremely successful venture in western nations and requires the least infrastructural investment with the availability of large screens and empty areas. It will be extremely innovative, affordable and as a pilot project, can be very mobile for the Indian audience. Though large parking spaces accompanied with expensive real estate could be stumbling block along with being accessible post-evenings and only operational in good weather, it still holds the avenue for revenues.
The extended rounds of lockdown have brought an exponential increase in viewership and subscription to VoD platforms. The Indian audience has accepted this new avenue and the idea of paying for a plethora of content. India is still a single TV per household consumer with a growing appetite and inclination for multiple subscriptions. As subscriptions are shared commodities if a family subscribes to 23-25 OTT platforms, roughly 50% of the totality, offering news, sports, movies and shows, the annual expenditure is of around Rs 16,000 or monthly charge of lesser than fourteen hundred rupees, being equivalent to a movie screening in a multiplex enjoyed by a family of three-four for a of two hours. These opportunity costs debate used to be unobtrusive and concealed under the assumption of if. That is if a family subscribes to multiple platforms and favours them over cinema halls or if the practices of paying for content are instilled etc.
Few repercussions of this novel virus include determent in employment opportunities, shrinking of demand and reduction in household income. In these intense scenarios, households are motivated to curtail expenses and increase savings for rainy days. With the expected price increase of movie tickets, courtesy new infrastructural requirements, VoD seems more viable, cheaper and affordable. It utilizes an existing laptop, mobile phones, or television as infrastructure along with the internet, an essential commodity.
Pay- Per-View is an additional venture, along with Drive-in Theatres which can be further explored. Inspite of OTT, single-screens and multiplexes being a part of a larger franchise of Indian cinema, the dependency on good content and clear demarcation of time bound releases, has ensured more of collaboration within the fraternity than competitive nature. With theatres running un-operational even during stage two of opening the lockdowns, unrest amongst multiplexes owners and production houses has stiffened up. In this regard, production houses could enable instilling of Pay-Per-View as a collaborative mechanism between OTT and cinema halls. The period of theatrical released could be observed even in OTT platform wherein subscribers will be required to pay an affordable premium per view, irrespective of subscription to the platform. The pooled money consolidated from each view could assist single screens and OTT platforms to share burden due to the government imposed restrictions and lack of business. Production house, responsible for content curation require support of theatres to provide means of content consumption and OTT for acquisition and custodian of content. Hence, a temporary arrangement through the infrastructure of Pay-Per-View could enable assistance to crumbling theatres/cinema halls.
The charm, glory, nostalgia and cultural connotation associated with cinema/theatre halls will ensure its continuity and existence for generations to come. However, owing to the novel virus, infrastructural upgrades are essential to manoeuvre communal gathering without the guarantee of an available audience. Hence, options like drive-in cinema facility or pay-per-view ensuring collaboration of OTT and affected cinema halls appear more cost-effective and investment-friendly while harbouring and addressing the needs, surplus and demands within the entertainment sector.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Priyal Pandey was a Junior Fellow at ORF's Technology and Media Programme at the time of writing this brief.
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