OTT race: Big films edge out indie content

Leading over-the-top (OTT) streaming platforms like Netflix and Amazon Prime Video are increasingly focusing their content budgets on acquiring high-budget, star-studded films after their theatrical releases. The rates for such Hindi, Tamil, and Telugu movies have escalated to ₹125- ₹130 crore in the past year. This trend has led to reduced opportunities for low-budget films or those with lacklustre box office performances.

While investments in original content haven’t yielded expected returns, these big-budget films offer the advantage of pre-approved censor board ratings, minimizing risk.

Vaasudev Koppineni, head of content at aha, notes that blockbuster movies with popular stars and significant production investments are highly sought after by streaming services. They offer repeat viewing value and are effective in attracting subscribers. “…you’re guaranteed of an opening on OTT, even if the film has already managed an opening in theatres earlier. It is also a preferred means to get those stars on your platform, who at this point, are not looking at featuring in web originals,” Koppineni explained.

According to independent trade analyst Sreedhar Pillai, the current market trend is towards acquiring major action and star films, with prices sometimes reaching ₹150 crore. Pillai highlighted the challenges for offbeat or low-budget movies in this environment, especially with declining satellite television prices and rising content creation and marketing costs. There are about 200 films across Tamil and Malayalam languages alone that are finding no takers at the moment, he added.

In a recent interview with Mint, Ajit Andhare, chief operating officer, Viacom18 Studios, had said that theatrical films have always been valued as premium content in India, driving cable and satellite TV penetration and brand marketing campaigns. “It isn’t a surprise that streaming platforms, too, have realized films are bringing more bang for the buck than originals. There will definitely be greater allocation of budgets to tentpole films, across Hindi and southern languages, going forward,” Andhare had said.

Industry experts point out that while Amazon Prime Video has long been keen on acquiring star films, Netflix has recently entered this space. Netflix has showcased major multilingual hits like Leo and Jawan, but this shift has placed smaller producers in a tough spot, forcing them to accept low offers or gamble on unexpected box office success.

“Movies are pre-exposed cinematic experiences supported by significant marketing spends. This additional exposure enables OTT platforms to get a head start in terms of reach and awareness,” said Saurabh Srivastava, chief operating officer, digital business at Shemaroo Entertainment Ltd. However, he acknowledges that inflated movie budgets are driving up acquisition costs for these platforms, calling for a necessary re-evaluation of this trend. Live Mint