• Team Diverstea

Box office Vs OTT Platforms


Before we start talking about the massive impact of OTT platforms on box office collections, we must pay minute attention to what OTT platforms are all about and how they have grown over the years. An over-the-top (OTT) platform refers to film and television content provided to the viewers via high-speed internet connection. Such platforms are not free. Viewers need to subscribe with a certain amount to get access through these platforms. In India, some of the best OTT platforms with millions of subscribers are Disney+Hotstar, Amazon Prime Video, Sony LIV, Netflix, Voot, Zee5, ALT Balaji, MX Player, and Eros Now. With the advent of smart devices, the entertainment providers are trying their best to expand the reach of their programs. The TV channels that were the forerunners of home entertainment for decades are now coming to digital platforms and running OTT video-on-demand services.


OTT platforms became widely popular due to the rapid growth of Netflix. It started growing in terms of profitability and popularity, especially among younger audiences. Netflix began to come up with more and more original content in terms of movies and web series.

The beginning of Netflix as a DVD by mail service started in 1998 and added streaming in 2007. It's first-ever original content was the House of Cards that became an instant hit.


Similarly, with the advent of other digital platforms like Amazon Prime, Hotstar, Voot, and with the originality of their content, there has been no looking back ever since.

Lately, movie releases' pomp and glory have been brought closer home, with over-the-top (OTT) platforms stealing the thunder from movie theaters. Since the past few months because of rapid growth in COVID cases, the film fraternity has made peace with the fact that the theater doors won’t be thrown open so easily. The present scenario has given rise to some significant questions like- Will OTT movie releases be sustainable? Will the trend of OTT release lead to reduced revenues for filmmakers? Will the big budget and ₹100 crore movies also follow this trend eventually? How long will this trend continue, and what is awaiting the film industry?




Disney+Hotstar made a crucial announcement that it would premiere seven Bollywood movies which were initially scheduled for theatrical releases from July 24 onward. This announcement has intensified the clamor in the industry. This is close on the heels of Amazon Prime Video’s move to premiere seven new movies.

As per industry estimates, it is pertinent to note that the theaters' or box office collections have traditionally accounted for around 60 to 70 percent of the film's overall revenue.


Once the movies that were initially slated for theatrical releases opt for OTT releases, they will never amass the kind of revenue that it would have otherwise unless the deal with the concerned OTT platform happens to be exceptionally lucrative, opined Mohan Umrotkar, the CEO of multiplex chain Carnival Cinemas. Multiplex giant Inox has also shown it’s displeasure over the filmmakers’ decisions of releasing their films directly in the digital platforms. "Inox would like to express extreme displeasure and disappointment on an announcement made by a production house today, to release their movie directly on an OTT platform by skipping the theatrical window run," said the multiplex chain in a statement on Twitter.

Gulabo Sitabo was one of the first movies which premiered on Amazon Prime amidst the COVID 19 pandemic. The producer of this film, Ronnie Lahiri, used a hypothetical situation to explain the situation. When a movie does well in the box office, it can go through the roof, whereas, if the audience rejects it, there would be no assurance of a minimum guarantee, he pointed out.


With theatrical releases, there is a risk involved, while a fixed sum is guaranteed with an OTT release, he said. OTT platforms see this as an opportunity to increase their subscriptions and compete among themselves, not with the exhibitors. If they garner the maximum number of subscribers during this period, they will be able to retain them permanently. Some big budget films that are headed to release this year won’t be able to recover their cost via OTT platforms. There might also be a significant drop in satellite revenue if the theatres don’t open up.

The respective announcement of Amazon Prime and Disney+Hotstar has created a huge chaos among multiplex chains like PVR and Inox.

However, big production houses such as Yash Raj and Reliance Entertainment have declared that they won’t release their movies on OTT platforms. According to their point of view, they won’t be able to recover their collection for big budgeted movies like Ranveer Singh-starrer ’83 and Rohit Shetty-directed Sooryavanshi if they choose OTT platforms for release.

There are nearly 10,000 screens in India; half of them are in multiplexes, while the rest are single screens. They sell movie tickets worth Rs 30 crore per day. If they lose new movie releases to OTT platforms, their business will suffer a huge loss. With the upcoming unlock procedures being initiated countrywide, it’ll be interesting to note if the masses would like to go back to the theatres or have we already accepted the ‘new normal’ and multiplex are now a thing of the past.


By- Debasmith Chakravorty.

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