I studied the feasibility of the idea, the problems it could incur, created a basic strategy on how to solve those problems, even created a pricing model of the said OTT platform

1. Theatrical
Movies @
Home
S T U D Y O N T H E F E A S I B I L I T Y
A N D C O M P A T I B I L I T Y O F T H E
I D E A .

2. Introduction
Movies have been screened in theatres for
decades, all these years the film industry never
saw any existential threat, until last decade with
the rise of OTT platforms, the content has
increased many folds and the OTTs have proven
to be much easier, simpler, affordable and an
easily accessible option. With relatable and
good content bundled with an amazing
Algorithms OTTs have made sure that it’s
customers are hooked up on their Platforms.
In the Indian context, the stakeholder who took
the biggest hit with the onset of OTTs are
Producers/Distributors.
The Cinema Food Chain in India is not
competitive enough to take on the OTTs, the
film industry must also start using technology
and change according to it.

3. Problem
This is the Cinema Food Chain, for a movie to reach a customer it needs to cross all these steps, though Distributors
sometimes are helpful in Lowering the risks of Producers, The percentage share in a ticket of Exhibitors(Multiplexes like PVR
and Inox) and Online Booking sites combined is around 45%. Which in turn decreases the share of Distributors/Producers
and it even makes an ticket less affordable for an average Indian.

4. Average Price of a ticket in PVR and Inox was Rs.200 in HY19 and with 15% convenience fee from Online sites the price
increases to Rs.230/ticket on average for a consumer.
 The Break down of a movie ticket share is as follows:
• GST (Goods Sales Tax) :28%
• Exhibitors (PVR or Inox) :32%
• Producers/Distributors :40%
Now we come to the second problem, High Taxes well as we have seen that Taxes make around 28% of the ticket
worth, it is really tough for Producers to break even with such high taxes and such heavy competition.
Since, the digital economy is rapidly growing fast the tax system is not adapting at the same pace, hence most of the
digital companies still pay very less amount of tax in the operating country. Hence to make full usage of this system,
OTTs are mostly registered in Tax Havens or use Tax Havens to avoid paying taxes at all.

5. Solution
Creating an OTT service which skips the exhibitor and the online booking site and directly sends customer’s money to
the Producer/Distributor. This service can act as an online theatre with movies being screened for 7-12 weeks (as the
theatrical window in India is 8 weeks). With users allowed to watch few movies with ads/pay per view /subscription
based business model.
On the next slide we have an example of how a subscription based plans could look like.

6. Subscription Plans
Mobile SD HD HDmax Student
2 movies/month 2 movies/month 3 movies/month 5 movies/month 3 movies/month
1 device login 3 device login 4 device login 6 device login 1 device login
420p** 580p** 720p** 1080p/4k** 580p**
75%* 125%* 200%* 200%* 75%*
1.5x ads 0.75x ads 0x ads 0x ads 2.5x ads
*Maximum sound output with respect to VLC Media player.
**Maximum video quality achievable.

7. The 24% share of the ticket which a multiplex receives makes up 55% of the revenue for the theatre, the rest being
made by Ads(10%) and F&B(24%), and the biggest overhead for a multiplex is Rent & maintenance of the theatre
which is almost 60-63% of Total Expenditure.
Of the Rs.127 that PVR gets per customer it spends Rs.89
of it out of which Rs.57 is spent on Rent and
Maintenance which would be negligible for an OTT
service. Hence, the OTT service would have quite low
expenses compared to theatres which can save money
that could be given as benefit to customers or to the
Producer.

8. Difficulties
As you have seen there are mostly only benefits to this kind of service, the reason this hasn’t been
tried is:
1. Theatres sell the cinema experience, the experience of watching a cinema on the 70mm. This
product doesn’t give that.
2. Piracy of movies
3. Getting Exhibitors on-board, since Distributors and Exhibitors have decades long relationship, the
Production houses aren’t ready to disturb that relationship for a new concept.
4. Production Houses fear that making movies available online, would not allow commercial Movies
to make money up to their full potential.

9. Potential Solution
1. A person always feels the most comfortable in his/her own home, and as technology gets cheap more and more
people are owing a HD Television set. In Theatres, there is a lot of disturbance in the background as well.
Watching movies in a theatre is a hectic task as well, people need to book tickets way before and schedule their
day according to the movie beat traffic, an average Indian spends 3.5 hours to watch a 2 hour film. Hence, any
provider would find a decent number of people willing to give up the Cinema Experience.
2. Piracy can never be stopped, but producers shouldn’t be worried about piracy as the ones who download it
illegally were less likely to watch it by buying tickets. The provider can try and create a great relationship with
the government, hence creating stricter laws and allowing the provider to bring down the pirated movie
immediately, the provider can setup a cell within the organization which checks over the internet for pirated
movies running in the online theatre. Screen Recording and Camera Recording can be restricted and a dynamic
watermark of the IP Address/ Email can be kept so that it is easier to find the criminal.

10. Getting exhibitors On-Board is the toughest, since getting Movies online would break their businesses completely.
Since, most of the commercial films earn 40-60% of their total Box Office in the 1st weekend and with highest rates
for a ticket, I suggest the OTT provider to release the movie on its site the subsequent Monday, hence the people
who have the money to spend the money would go to theatres on the weekends whereas low salaried individuals
would watch it over the top instead of Theatres. The exhibitor community and Producer Community can create an
Partnership between each other which in-turn has a significant stake in the provider for a Fixed percentage of
Dividend. The provider can be created by the Partnership of the Exhibitor and Distributor community, with each
Stakeholder having a stake in the partnership, doing this will help Exhibitors to sort of hedge their position, and the
producers/Distributor can get a bigger share of the ticket price. So even though the movie may not make a lot of
money, but because of having a higher share, the Producers are tend to gain eventually.
Q. How will Distributors have trust in such a big Idea instantly, and give up all their Plans on the word of a new
or an entrepreneur ?
Ans. First of all, I have suggested a way in which there isn’t any need for a new entrepreneur, this idea can be
implemented by Partnership between Producers most probably by the Guild. And if at all an entrepreneur needs to
try this idea, then I would suggest them to start doing this by streaming South Indian cinema in USA or Punjabi
Cinema in UK and Canada, and if the idea is sustainable then the Category of cinema can be added as well as the
country in which it is streamed and if the Idea is good enough it would make its way into india.

11. Muchas Gracias