What happened last year?

In 2020 when the pandemic first hit India, the government imposed tight restrictions. One casualty of lockdowns was the multiplex sector which was shut indefinitely. It was 6 months  before the government allowed partial opening of these multiplexes, albeit with social distancing rules. However, they did not find the part–capacity operation a viable model and preferred to wait for better times ahead. However, with the second round, that hope is gradually getting belied as multiplexes are now preparing for a bigger dent from the OTT players. 

Waiting for Godot or producers

The multiplex business model is largely based on new movie releases and the first week euphoria so created. Beyond that, the marginal utility for multiplexes is quite limited. Last year, while many of the producers did go ahead and release their movies on the OTT platform, the larger production houses opted to wait for the multiplexes to open. Now, there is a problem. The second COVID round has hit people close and hit them hard. Even if multiplexes open, the fear is that the footfalls may be discouraging. So, where do producers go from here? 

Expect an OTT shift this year

Producers have a problem if the opening of multiplexes gets delayed further and if the public response is tepid. A typical Indian movie has huge stakes. Apart from the funds locked up, time value starts hitting distribution rights, story novelty, market appeal of big stars etc. The moral of the story is that if the pandemic implies a longer shut down call for multiplexes, then most producers are likely to have second thoughts. The OTT platforms like Netflix, Amazon Prime and Disney Hotstar have seen tremendous traction in the last year. The producers will be keen to capitalize on this emerging trend before it is just too late. That could be the issue? 

Just adapt to the change?

One thing the Indian entertainment industry has learnt over the years is that there is no use trying to fight a trend. We have seen trends from silent movies to B&W movies to Video Cassettes to Single Screen theaters go out of fashion in no time. While the multiplex model was a great model for the last 20 years, COVID and the social distancing needs have raised question marks over the multiplex model. Low footfalls means low ticket sales and low demand for the F&B products. That is a recipe for losses and we are seeing that happen. The only option is to adapt to the OTT shift and rethink the multiplex model. It is a model that has a tough competitor!