But the OTT deals don’t provide an accurate yardstick for how much movies earn on the platform. They may be lucrative for consumers, but aren’t sustainable for filmmakers. Here are some facts about the film industry’s OTT profit margins:
OTT deals are not a yardstick for how much movies earn from ott platform
The revenue model for OTT platforms is different from traditional theatre films. Filmmakers do not need a huge budget to make a hit OTT movie. They can simply put out more content on OTT platforms than they can produce at traditional production houses. It’s no wonder that big-budget movies are able to hang on to their audiences longer – but not forever. That will depend on how long they stay closed and how consumer behaviour changes when they reopen.
OTT deals are a viable way for smaller and medium-budget movies to get their films out into the world. For them, it means less risk at the box office. They can potentially earn the same revenue as theatrical releases, if not more. This risk-free approach could also prove to be more attractive for smaller films, who often incur interest charges on the money they invest in the production of the film.
OTT platforms make a minimum of 20% profit
OTT platforms have emerged as the best places to stream movies online. They are highly profitable and rely on negative cash flow to generate profits. They invest in content creation and then get paid for the same from subscribers. This way, they make a minimum of 20% profit on each movie. With the increasing number of streaming platforms, people no longer have to pay a hefty subscription price to enjoy their favorite movies. They can also watch the latest episodes of their favorite TV shows anytime.
While the movie release venue is decided at the beginning of production, OTT platforms make a minimum of 20% of their profits. Often, movies that were originally planned for theatrical release are never able to generate the same revenues as those released on a theatre screen. OTT and satellite rights alone do not add up to huge profits. In order to maintain profitability, deals with OTT platforms must be exceptional and profitable.
OTT platforms are lucrative for consumers
OTT platforms have become an increasingly popular way for consumers to watch television and digital content. Originally, content creators had to rely on third-party networks to distribute their content. With OTT platforms, they can now build their own standalone content hub and have much more control over their content. The increased competition for consumers’ attention means a greater need for high-quality content. Here are three reasons why OTT platforms are profitable for consumers.
OTT platforms are becoming more popular as more people are embracing digital technology. While their growth has been rapid over the past two years, India’s population has largely remained untapped. According to a recent survey, nearly 80% of Indians own a smartphone. The number of smartphones is expected to surpass 100 million by the end of this year, and OTT platforms are poised for a profitable future in a rapidly digitising society. Until then, the biggest challenge will be satisfying consumer demands and addressing current user experience concerns.
OTT platforms are not sustainable for filmmakers
OTT platforms have snatched thunder from cinemas and sparked a high-decibel debate among film industry professionals. Recent OTT movie premiere announcements suggest the film industry’s acceptance of the coronavirus. While direct OTT movie releases are a viable alternative to the traditional movie theatre model, they may not be sustainable for filmmakers. And since big budget films may soon follow, the debate over OTT platforms is likely to intensify.
The growing popularity of OTT platforms has led to a backlash against their content, most often in the form of social media complaints. For example, the Indian government recently went to court over the movie ‘Gunjan Saxena’, which has a strong message against the Indian government. The documentary Bad Boy Billionaires has also encountered legal hurdles. In addition, Western countries regulate content according to age groups, restricting violence and nudity. Filmmakers may have to face the same legal challenges as Hollywood and independent filmmakers.
Podobne tematy