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Here is why OTT can't threaten theatres much

Wednesday, May 20, 2020 • Telugu Comments

Here is why OTT cant threaten theatres much

With OTT platforms like Amazon Prime and Netflix continuing to be in the news, a section of commentators has started arguing that theatres are doomed forever, thanks to Covid-19. As per media and entertainment industry specialist Vanita Kohli, these claims are not founded in reality.

"Cinema screens brought in over 60 per cent of the Rs 19,100 crore that Indian films earned in 2019. A film's theatrical performance impacts the price of every other revenue stream; TV, OTT, overseas. OTT cannot substitute what a film makes in its life cycle," Kohli writes in Business Standard.

Agreeing with her, Nikhil Pahwa tweets, "Also, 60-70% of what a film earns is in the first week/weekend, and that's in the theatres. No way OTT players are going to be able to substitute for that for each film."

If a producer sells his film directly to an OTT platform, it is going to affect his revenue from satellite rights as well. Broadcasters have been shelling out big amounts for big-ticket movies. If a film is directly released on the web, TV channels' revenues from telecasting the movie will fall significantly, analysts suggest.

In this scenario, how can OTT replace theatres?

"OTT or TV as the first window works largely for arthouse/niche cinema; this is an aberration created by the pandemic. Do look at Hollywood releases on OTT," Kohli further analyzes.

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