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<\/p>\nThe OTT market went on a high with the advent of the Covid-induced lockdown in 2020. The major streaming giants took advantage of the fact that cinemas were shut and tempted filmmakers to skip theatrical releases for their unreleased movies. In return, they were paid fancy prices. As expected, several filmmakers took the bait. It was a win-win situation for the producers \u2013 they were given an amount which was much higher than their total cost of production. Hence, they made a profit without the stress of distribution, fighting for screens, etc. The golden time continued until the first quarter of 2022.<\/p>\n
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50% price drop, 1-year deals, and zero safety net \u2013 Bollywood\u2019s digital dream turns nightmare as OTT platforms tighten screws and leave producers bleeding<\/p>\n
Two developments happened in 2022 – the theatrical business gradually came back on its feet, and secondly, the OTT platforms realized that paying premium prices for acquiring films was not paying them dividends, like it did in 2020. Hence, they decided to ask filmmakers to release their films in cinemas first, thereby putting the onus on filmmakers for promotion. It helped the OTT giants to buy the films at a lower price. They also decided to have very limited direct-to-OTT films on their platforms and insisted on being a part of it from the very start.<\/p>\n
Since then, there have been a few more developments that have pinched the producers hard. A top industry source told Bollywood Hungama, \u201cIn these 3 years, the streaming platforms now ask for box office collections. And no, makers can\u2019t submit the collections they brag about on social media. They need to submit collections audited by a reputed firm and based on the lifetime, the price of the digital price of the film is decided upon. For instance, if a biggie collects less than Rs. 100 crores, it would be paid a lesser amount. But if it collects more than Rs. 100 crores or Rs. 150 crores, the digital price would be higher.\u201d<\/p>\n
The industry source further said, \u201cSeveral small films which bombed at the box office are yet to find a digital partner. Secondly, the prices have further come down compared to last year. In fact, producers are shocked to see prices fall by nearly 50%. Unka poora economics ab hil gaya as they used to rely big time on making a profit through digital sales.\u201d<\/p>\n
Girish Johar, producer and film business\u00a0analyst, confirmed these developments, \u201cPrices have come down. The entire revenue pie has shrunk. Box office has shrunk, music revenue has shrunk, and even satellite revenue has shrunk. OTT players, which were the latest entrants, were paying prices to the producers during the pandemic period. They soon realized that the higher revenue and new subscribers that they were expecting were not matching their expectations. Hence, they have decided not to pay the high prices that they used to pay earlier. That has occurred across the board.\u201d<\/p>\n
He added, \u201cThe OTT players use a simple logic. If a film is not working at the box office, how can a producer ask for a higher price?\u201d<\/p>\n
Suniel Wadhwa, co-founder and director at film production and distribution firm Karmic Films, had a slightly different take: \u201cI don\u2019t believe so because good deals are given to producers who are giving them regular content like Excel Entertainment, Dharma Productions, Yash Raj Films, Maddock Films etc. But definitely, the prices offered have reduced for films that are not performing well.\u201d<\/p>\n
Girish Johar further stated, \u201cThis is from producer to producer. If a particular producer has a multiple-line-up of films, then he still gets a good deal. But a producer with a single price is getting 30-40% of last year\u2019s price.\u201d<\/p>\n
The practice of annual contracts<\/p>\n
What has further depressed the filmmakers is that OTT platforms are buying streaming rights for just one year, as opposed to buying rights for 3 to 5 years. This further reduces the revenue for the producers, as obviously, the platforms will pay a small amount since the time period has further shortened.<\/p>\n
Girish Johar explained, \u201cThe OTTs are now shelling out less money for a lesser number of years as well. They take a call on whether a long-term acquisition of a particular product can help them in the fourth, fifth, or sixth year in the future. If they feel it would benefit them, they have deep pockets to pay for renewal. But if they feel a film\u2019s presence on their platform won\u2019t help them down the line, they decide to just have the cream of the milk and pay accordingly for a period of one year or two years.\u201d<\/p>\n
Suniel Wadhwa explained, \u201cEarlier, the rights were being sold for 5 years or 7 years, depending on the producers\u2019 capability and the bandwidth. If a producer runs a cash-rich company, he\u2019s definitely going to command the price he wants. It basically boils down to who has the power to negotiate for a better deal between the two.\u201d<\/p>\n
Girish Johar agreed, \u201cAnyone who has more experience or more might can dictate. If it\u2019s a distress sale, the other party can dictate.\u201d<\/p>\n
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OTTs say no to political drama<\/p>\n
Realizing that times are volatile, the OTT players have another strict requirement in place \u2013 in case the film gets into a controversy or gets into some political tension, the producer will bear the risk. An industry insider commented, \u201cThe streaming giants include a clause stating that the filmmakers would be held responsible in case things go wrong after the digital premiere. Usually, if the film gets into trouble, it happens when it\u2019s been released in cinemas. But then there are instances like the 2023 Tamil film Annapoorani, starring Nayanthara, which caused an uproar over allegations that it hurt religious sentiments only after its Netflix premiere. Hence, the clause was added.\u201d<\/p>\n
Another indemnity clause is added in the contracts of the writers by the producers at the insistence of the OTT platforms. The insider revealed, \u201cAs per this clause, if it comes to light later that the writer plagiarized the script of the film, he or she would be to blame for it and pay for the legal and other costs incurred.\u201d<\/p>\n
OTT killed the satellite medium<\/p>\n
Earlier, the makers also had the safety net of the sale of TV rights. Sadly, even this option has been diluted. A prominent filmmaker told us, \u201cThe satellite market has been killed thanks to the priority given to the OTT platforms. The idea was that a film should arrive digitally within 8 weeks of its theatrical release and that there should be exclusivity for a few months. This delayed the satellite premiere, and the makers were okay getting a pittance from the TV channels. After all, they were earning big bucks from the OTTs. Now, streaming platforms are not paying them like before, while the sale of satellite rights continues to fetch a low price. Meanwhile, the cost of filmmaking is increasing. No wonder that the profit margin has shrunk and the makers are hoping for a huge box office performance to stay afloat.\u201d<\/p>\n
The filmmaker further said, \u201cOne way of looking at it is that OTT prices have fallen. But it\u2019s a price correction that is happening. What\u2019s unfortunate is that few of us saw it coming. But no one paid heed as most of the industry was busy making hay while the sun shone. There was no long-term planning. What would they do if the golden goose were killed? Finally, the filmmakers are grappling with this question.\u201d<\/p>\n
He also ended on an optimistic note, \u201cI can safely assure you that we\u2019ll find a way. Our industry has battled extensively in the past. We fought piracy, introduction of video cassettes, multiplex diktats, and who can forget, the Covid pandemic? Remember the sceptics predicting the end of cinema-going culture in 2020? But the theatrical business is back on its feet. Similarly, a solution will be achieved for the OTT crisis, too. It\u2019s just a matter of time.\u201d<\/p>\n
Also Read: Shashi Tharoor calls Aryan Khan\u2019s The Ba***ds Of Bollywood \u201cabsolute OTT GOLD\u201d; tells Shah Rukh Khan \u201cyou must be so proud\u201d<\/a><\/p>\n Tags : Dharma Productions<\/a>, Excel Entertainment<\/a>, Features<\/a>, Girish Johar<\/a>, Karmic Films<\/a>, Maddock Films<\/a>, OTT<\/a>, OTT Platform<\/a>, Suniel Wadhwa<\/a>, Yash Raj Films<\/a>, Zee Studios<\/a> Catch us for latest Bollywood News<\/a>, New Bollywood Movies<\/a> update, Box office collection<\/a>, New Movies Release <\/a>, Bollywood News Hindi<\/a>, Entertainment News<\/a>, Bollywood Live News Today<\/a> & Upcoming Movies 2025<\/a> and stay updated with latest hindi movies only on Bollywood Hungama.<\/p>\n","protected":false},"excerpt":{"rendered":"The OTT market went on a high with the advent of the Covid-induced lockdown in 2020. The major…\n","protected":false},"author":2,"featured_media":108358,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[3070,156,78040,337,78041,78042,41525,409,111,139,69,38905,57550,78043,12744,78044],"class_list":{"0":"post-108357","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-movies","8":"tag-dharma-productions","9":"tag-entertainment","10":"tag-excel-entertainment","11":"tag-features","12":"tag-girish-johar","13":"tag-karmic-films","14":"tag-maddock-films","15":"tag-movies","16":"tag-new-zealand","17":"tag-newzealand","18":"tag-nz","19":"tag-ott","20":"tag-ott-platform","21":"tag-suniel-wadhwa","22":"tag-yash-raj-films","23":"tag-zee-studios"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/108357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=108357"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/108357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/108358"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=108357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=108357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=108357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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