Movie Business Fights Over Latest OTT Deals And Threat Of ‘Retributive Measures’

From 13th March, movie theatres across the country had to abruptly shut shop over fears of the coronavirus pandemic, with no indication of when they would start up again. In just a matter of days there were murmurs that movie producers were already negotiating direct OTT releases with streaming platforms. Several names of movies being released on OTT have been tossed around since. Last week, this became a reality. Amazon Prime Video announced that it has acquired 7 films that will premiere on their platform. Two are big ticket Hindi films – Shoojit Sircar's Gulabo Sitabo and Anu Menon's Shakuntala Devi. It's safe to say that many more such announcements will follow. 

For the producers of these films, this was the only way to cut their losses at a time when the entertainment industry is bleeding in billions. Films are made on borrowed money, and the longer you sit on a completed product, the higher your interest costs mount. But the exhibition sector, especially leading multiplex chains, saw it as a declaration of war. INOX hastily put out a poorly-worded press release that read more like a threat. The phrase that had everyone seething was "retributive measures" – something INOX has warned producers of when theatres are back on their feet. This triggered a back and forth of press releases between the Producers Guild and other multiplex chains (PVR and Carnival Cinemas were wiser in their choice of words), each explaining how the pandemic has crushed their business.

Some of the angry reactions on social media indicated that this was perhaps a tense relationship only waiting to explode. "The INOX statement was so nasty. When I read it, a very filmy dialogue crossed my mind. For the exhibitors it's like, 'Humara khoon, khoon. Lekin tumhara khoon paani?," remarks a producer who didn't want to be named. Some industry insiders opined that big multiplex chains had become too powerful, controlling the fate of movies by deciding how many shows to give them. The realisation that movies could now bypass them and find a new home in streaming has sparked panic and insecurity.

"A film like Thugs of Hindostan which was wholly rejected by everyone still got a massive opening because of the ridiculous number of shows these big multiplex chains gave it. Why do you think some terrible films do well? Because these guys give them all the shows and people have no choice but to watch what's readily available. Even if they're failing, they'll keep them in the theatre for long if they have old relationships with the star or producers. And then they don't give other smaller movies a chance. In some areas they won't release the film at all or they'll give you such terrible timings that no one can watch," explained an upcoming filmmaker. 

Producers and exhibitors have had skirmishes in the past which gradually blew over. Maybe this will too. But should producers be worried about the "retributive consequences" INOX has warned of? "The three major chains — PVR, INOX, Carnival —control almost 50-60 % of multiplex box office in this country. They could get together and take a hard stand on revenue sharing and say we want a more agreeable proportion of revenues than what has been agreed to in the past. Or they may want to be less friendly in trying to accept requests regarding showcasing. This can be messy. We have seen past incidents where Tashan didn't release in certain cinemas for almost a week or so because Yash Raj and theatres couldn't agree on revenue sharing terms," says Shailesh Kapoor, founder and CEO of research agency Ormax Media. 

If one looks past its harsh choice of words, the INOX statement reveals that this is probably the most vulnerable the exhibition sector has ever been. They haven't earned a single buck in over two months and there's no telling when they will see revenues again. There are large overheads, salaries to pay, and no aid from the government. They also have to implement more stringent sanitation facilities going forward which won't come cheap. Also, theatres reopening does not guarantee people coming to visit it. 

At this point, films going straight to OTT felt like being kicked when you're already down and out. "An Ayushmann Khurrana film does phenomenal business and now we've been robbed off a definite 40 odd crore revenue that the exhibition sector would have got from this film. At a time when the sector is so cash strapped and some of us are facing an existential crisis, losing these kind of potential revenues is heartbreaking," explains film exhibitor and distributor Akshaye Rathi. The next big film going to OTT is rumoured to be Laxxmi Bomb starring Akshay Kumar, another box office favourite. 

That streaming is a grave threat to movie theatres is old news. But could this pandemic make movies skipping a theatrical run the new normal? "It's not a norm. It's an exception…. Producers go through great lengths to plan theatrical releases along with their distribution partners. They are most certainly not giving up on theatrical exhibition of their films. It's foolish to even think that they would. It's just that these are unprecedented circumstances. The only way to survive is if you adapt, are nimble and willing to change," explains Sneha Rajani, former head of Sony Pictures.   

It is strange, however, to see producers and exhibitors, who control two ends of the movie business, and therefore work intimately with each other, communicate through long-winded public statements. "We deserved the courtesy of communication before selling these films. Why couldn't you call us and say these are the problems we are facing, is there something that we can do to find a solution together? Everyone is pointing at that INOX communication but no one is talking about the fact that before all of this, the Multiplex Association of India had put out another communication which was a well-worded, humble request to producers saying please stand by us. I can't remember a single producer even replying or acknowledging it," says Rathi. 

With massive losses mounting on both ends, so is the feeling of hurt and betrayal. Rathi tweeted that in the Bollywood of yore, senior, wise producers like Yash Chopra, Manmohan Shetty and Kamal kumar Barjatya would be summoned to broker peace. The industry is a much different place now and so are these circumstances. How they choose to move forward from here remains to be seen.

(By Mohini Chaudhuri and Sankhayan Ghosh)