The emergence of OTT had already caused disruption in the entertainment industry. With a vast collection of movies and tv shows available just a click away, anyone with a phone and internet connection could sit at home and catch up on any movie of their choice at their own convenience.

Even so, the entertainment business did not suffer such a big hit, especially amongst Indian consumers with watchers preferring the movie-hall experience. But, what do you do when you cannot step outside for months?

What is OTT?

An over-the-top (OTT) media service is a streaming media service offered directly to viewers via the Internet. OTT bypasses cablebroadcast, and satellite television platforms, the companies that traditionally distribute such content. 

The term is similar to  subscription-based video-on-demand (SVoD) services that offer access to film and television content (including existing series acquired from other producers, as well as original content produced specifically for the service).

Over-the-top services are typically accessed via websites on personal computers, as well as via apps on mobile devices, or televisions with integrated Smart TV platforms.

Rise in OTT users during the pandemic:

With the onset of Covid 19, everyone has been confided to their homes, trying to find ways to get through this pandemic. This is where OTT plays a huge role.

This platform which is easily accessible and affordable across a wide range of users has become the go to provider for movies and shows, with subscribers using this free time to catch up and binge-watch on shows that have been a part of their watchlist for months.

Rise in Netflix share prices in 2020 over OTT platform
Rise in Netflix share prices in 2020

So, as the light goes out on live events, movie premiers and shoots, the only bright side is the rise of OTT, still maintaining streaming amongst viewers through their platform even after production has seized causing a halt in the content line.

Rise in OTT Usage -The Indian Context

With the Government announcing a nationwide lockdown from 25th March, all movies scheduled to release in the months of April, May and June experienced a huge setback. Even with the several relaxations announced in relation to businesses and commute, the opening of movie-halls and revival of traditional entertainment methods via movie screenings will take a considerable amount of time.

This includes consumers readiness to visit crowded areas and their fear of lack of sanitization within the halls. Taking all these factors into consideration, Indian cinema has already begun shifting to virtual platforms.

rise in OTT usage
A survey done by Brand Equity shows how 55% of the respondents from India prefer streaming content online

The first movie to take the leap of direct-to-digital release was Gulabo Sitabo (starring Amitabh Bachchan and Ayushmann Khurrana). The film was originally slated to release on April 17, but due to the lockdown the film will now be releasing on Amazon Prime on the12th of June. Within a week of this announcement, Prime announced that it had acquired

six other Indian Films for its direct-to-digital slate. These include, Shakuntala Devi, the biopic starring Vidya Balan, and five regional language films that will premier exclusively on Prime Video in the next three months across 200+ countries.

Soon after, Netflix also announced that it would be premiering Anurag Kashyap’s ‘Choked: Paisa Bolta Hai’, on June 5th. Even ZEE5 India is premiering Nawazuddin Siddiqui-Anurag Kashyap starrer,’Ghoomketu’, on May 22nd. The film is scheduled for an Eid release on mirroring a common theatrical trend. 

PVR revenues drop massively with increase in online streaming and amidst the pandemic.
PVR revenues drop massively with increase in online streaming and amidst the pandemic

Although Indian Cinema has always followed the traditional method of a theatrical release, the pandemic has caused directors and producers to finally adopt newer methods and the initiative taken by Amazon Prime to undertake these direct releases has opened a new can of worms for upcoming Indian movies.

Impact on foreign entertainment industries:

This outbreak has also hugely impacted entertainment industries in other parts of the world. With most award shows and film festivals either kept on a hold or entirely cancelled, Covid has led to a downfall in Hollywood as well. Several movies have been put on hold such as Edgar Wright’s, ‘Last Night in Soho’, that was scheduled to release in September. Disney Studios has also rescheduled its upcoming releases, ’Doctor Strange’ and ‘Thor’, due to the

outbreak.  Along with this, Broadway shows have also been cancelled due to restrictions on audience sizes and concern from actors and audiences regarding health risks.

Broadway shows completely shut-down amidst pandemic.
Broadway shows completely shut-down amidst pandemic

 The Academy of Motion Picture Arts and Science has also altered its rulebook to allow OTT releases to now be considered for Hollywood’s most coveted awards, the Oscars for the year 2021. This was done because of the halt caused in movie screenings due to the pandemic.

Impact on OTT Platforms:

Until now, OTT Platforms have never been the first option when it comes to movie releases. Directors and producers have always preferred big-ticket, event lead releases and have enjoyed watching consumers appreciate their work on the 70mm screen.

OTT Platforms have always been the go-to option for movies that didn’t work out well on screen or weren’t released on the big screen at all. But with A-List actors such as Amitabh Bachchan and Ayushmann Khurrana diving onboard with virtual releases, the Indian Cinema will now enter an entirely new era.

Therefore, this period has not only opened a new set of oppurtunities for the OTT Platforms but also caused a huge spike in users as well as streaming hours. At least that’s what the statistics from Indian OTT subscribers are saying right now. The average time spent by each Indian subscriber has gone up from around 20 to 50 minutes to at least one hour during

recent times. With over 40 OTT platforms to choose from, the Indian consumers can watch their favourite TV show or catch the latest movie at their own convenience.

Revised revenue models and strategies:

With this hike in viewers, platforms have started revising their pricing models. One such model that the platforms are considering is the Pay Per View model, where users pay for only one title at a time. This method causes a steady stream of revenue and opens up the choice of only paying for titles that interest the viewer. This strategy has only been used by YouTube and Google Play Movies so far and has not been a great success amongst Indian consumers.

Another issue that arises is the amount of money that will be spent on acquiring direct-to-digital movies which will cause the companies to cut down their budget on projects including their own releases.

Theatrical business- Where is it headed?

India is estimated to have a total of 9600 screens. Movie theatres still account for the largest share of a film’s revenue. But with the surge in OTT consumption due to its easy

accessibility, virtual media is shifting the balance towards digital slowly yet surely. In 2019, digital revenues grew nearly by 30 percent while theatre revenues were up by nearly 15 percent only.

With the pandemic putting brakes on the launch of new screens because of social distancing guidelines and fear of proper sanitisation, multiplexes are suffering a huge setback. With the conditions showing no improvement, there is no surety as to when multiplexes will begin normal functioning and even after their revival, most consumers will prefer consuming content from the safety of their homes rather than visiting halls that bare the risk of lack of proper sanitisation.

This setback will not only affect cinema halls but also local productions and plays as well as Broadway shows. Shows such as Frozen which were initially cancelled due to the pandemic are now permanently cancelled. This is because Frozen was one of the lowest audience-attracting shows, and once things begin to go back to normal, production for shows yielding high earnings will only be considered.

Therefore, the entertainment business will have to come up with new methods to maintain its relevance and think of new avenues to expand into in order to prevent itself from crashing under the influence of the pandemic.