Inculcating the pay-per-view habit for new movies on OTT in India

You could start by exclaiming:
Pay-per-view?
In India?
What a preposterous idea!

But, hold on. Allow me to build a case for building the habit of pay-per-view only for new films that are released simultaneously on OTT alongside theaters. For context, 2 months ago, you would have said the same thing about brand new movies releasing directly on OTT in India đŸ™‚

We have been hearing about one odd small upcoming movie going direct to OTT, but now, as many as 7 movies, with well-known names behind them are heading directly to Amazon Prime! This includes an Amitabh Bachchan-starrer too! For the current times, even more important… an Ayushmann Khurrana-starrer!

Gulabo Sitabo and Shakuntala Devi (Hindi)

Ponmagal VandhaaL and Penguin (Tamil)

Sufiyum Sujathayum (Malayalam)

Law and French Biryani (Kannada)

All on Amazon Prime Video!

Netflix and Hotstar are seriously out of the movie race so far!

The theater brigade is obviously rattled and 2 salvos have been fired so far, one by INOX and the other by PVR. I wrote about the 2 letters yesterday.

The Producers’ Guild of India has also offered a carefully worded 2-page note.

The Indian film industry is shifting/evolving right in front of our eyes, along with the overall global film distribution and exhibition model. The same animosity and betrayal story is playing in Hollywood too, between Universal and AMC!

But, I would argue that the producers and the platforms are missing a crucial element: inculcating (or even trying) a new habit in audiences, of shifting the pay-per-view behavior, from theaters to streaming platforms. It’s not too late, though.

We, the audience, have always paid for movies in theaters on a pay-per-view model. But, for an OTT platform, since we already pay per month or per year for watch-all-you-want, we do not expect to pay for individual titles. Tata Sky had that model – of pay-per-title – even when we were paying a monthly fee.

Now, why should the platforms consider a pay-per-view model?

It doesn’t make any sense for movies that are already released in the theater and have completed the 4-8 weeks period mutually agreed between theaters and online platforms. The pay-per-view idea would work and is effective only for brand new movies that release at the same time as theaters. The ‘pay’ is not for the platform, but for the timing/privileged window of being able to watch something at the same time as theaters.

For platforms, it is a great opportunity to create a new habit for the audiences. That is… a 2-tier payment model:
1- a see-all-you-can for a flat monthly/yearly fee for older/existing titles
2- a watch-once price for brand new movies
(which could eventually be added to one OTT platform’s library after a period)

Why is this important? Because, right now, the ability of an OTT channel to pay and acquire new titles is restricted by factors other than audiences – market capitalization, their own cash reserves, their sources of funding etc.

How do other modes of movie exhibition raise money? Through audience-based takings – ticket sales, sale of snacks etc.

How do producers raise more money to produce? Ticket sales, sale of rights to assorted platforms etc.

So, why should only the OTT players be not able to include the equivalent of ticket sales in how they are able to invest more to acquire titles?

If movie exhibition in India goes fully digital on streaming platforms, the way pay-per-view can be introduced is limited only by our imagination.

For A-star films in any Indian language, the star-related fees themselves take a huge chunk of the budget. That makes them completely unviable for a streaming-premiere because the ‘collection’ is dependent on actual market forces – of people buying tickets and adding to the revenue of the production.

But if pay-per-view is inculcated as a habit, here’s rudimentary math (rudimentary, for emphasis again): 5-10% of Hotstar’s 300 million subscribers, if they are charged Rs.200 for an A-list star’s brand new film for the first 2-3 weeks’ direct streaming premiere. You calculate the potential.

FOMO would do the trick too, hopefully, as it does, even in theaters. Do people wait for a film to hit the OTT circuit and skip watching it in theaters? Perhaps, and this is a recent phenomenon after people have been conditioned to understand the kind of waiting period (a predictable 4-8 weeks). But we still head to the theater if the word-of-mouth of a film’s theatrical experience is very high as it opens.

The Rs.200 is not per-head, unlike theaters – we should consider them per-household. That’s a dynamic change they have to live with.

Then, payment gateways could subsidize the pay-per-view model to induce behavior change. Say, spend Rs.1,500 per month on Paytm and you get the premiere of the same movie at Rs.150 instead of Rs.200. That could make it a ‘World premiere of Ranbir Kapoor’s new film, Dhansoo – a Paytm+Netflix exclusive’.

Online stores could do the same -spend X on Amazon per month and…
Banks could do the same -spend X on our debit card per month and…

The idea is to create a behavior change and put enough impetus on that from multiple directions.

The industry always has piracy to fight with anyway.

But when the revenue from an OTT-exclusive premiere is not dependent only on what the platform is willing to pay and becomes a revenue-sharing play between producers, platforms and an external partner, the dynamics shift dramatically. That leads to more creativity on how movies, even with big stars, could be rolled out either bypassing the theater exhibition model (for films that may not be perceived as being useful or appropriate for a large theater experience), or by adding another mode of exhibition along with theaters (a simultaneous-release model).

That way, the producers are entering into a revenue-sharing agreement with both theaters and OTT platforms, increasing their ability to budget better for films. And the films will continue to offer tangible metrics in terms of ‘collections’. Right now, the OTT ‘collection’ is non-existent – a black-hole that is decided only by how/what the platform paid to acquire a title with the audience having no part to play in the potential of a title.

To be sure, theaters play a phenomenal part in creating the necessary aura for films. The kind of experience offered by theaters can never be matched by home viewing. But we have evolved to a state where only certain kinds of movies make sense to be consumed through the theatrical experience – the kinds that take full advantage of the acoustics and aura created by the large-sized screen. So, it hardly makes sense to hold on to the age-old notion that all movies are worth the same theatrical experience. We know better now, we have evolved and the movie exhibition dynamics could do with evolution too.

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