Movies go solo as OTTs swipe left on deals before theatrical release

In a departure from the practice of securing a streaming partner before theatrical release, a growing number of films are now arriving in cinemas without OTT deals, leading to delayed or absent online streaming. 

This shift comes as streaming services become wary of picking up box office failures and have seen titles remaining unsold or seeing insignificant viewership despite being bought at huge rates.

Over the past few months, Hindi language films such as Aankh Micholi, Zwigato and Jogira Sara Ra Ra, among others, released in cinemas without OTT partners and are yet to appear on any platform. 

Some high-profile films that had announced they would stream on specific platforms post theatrical release, are yet to launch on services with platforms backing out of these deals after box office failures. Tiger Shroff’s Ganapath and thriller The Lady Killer were to premiere on Netflix, but that is yet to happen.

Industry experts point to an afterthought by OTT platforms, suggesting that these acquisitions may not have been justifiable to their parent companies in hindsight.

“The norm for streaming platforms was to commit to a price based on the box office performance of the previous movie of the lead actor whose film is being considered,” said a senior executive of a streaming platform, requesting anonymity. 

“They would presume that the new film would at least meet a certain box office benchmark even if it didn’t surpass expectations. However, no calculations are now working and deals are only happening in parts,” the executive added.

While services pay a certain percentage of the committed amount before theatrical release, clauses in contracts allow them to terminate deals, the person added. Further, no service is considering small-scale films or commercial flops. 

“There is no other option. There is no way the India executive can justify these acquisitions to international bosses,” the person added.

To be sure, the whole model of risk mitigation before theatrical release started when television networks like Star, Sony, Zee and Viacom18 began outbidding each other for satellite rights of films, pushing prices up in the early to mid-2000. 

Sony and Star specifically started buying rights of movies much before they even went into production. 

Later, when OTT players came in, they followed the same practice to grab eyeballs. However, the streaming boom has now slowed with neither subscriptions nor advertising having taken off as expected.

Film producer, trade and exhibition expert Girish Johar said a lot of films are in limbo after disastrous box office performance. Many others were unable to strike a deal at all. 

“When these films were greenlit, the market was different. Everything changes after non-performance at the box office. Had things been better for the streaming industry itself though, some of these deals could have gone through,” Johar said. 

The fact that the quality of the film doesn’t meet the company’s standards, can also be a case that the platform makes, he added.

According to trade experts, there are at least 40-50 Tamil language films lying unsold at the moment. However, across languages, the crisis is bigger for non-star, low-budget films. 

For bigger titles, the platform may absorb them into their library while negotiating with producers for a more reasonable price next time. “Nobody wants a dud in their catalogue anymore. Everyone in the hierarchy is answerable to their bosses,” said Yusuf Shaikh, business head of feature films at production and distribution firm Percept Pictures.