Press Release

Multiplex to multi-platform

10 April 2012

The web of films is spreading and the way movies are being consumed is changing with multiple platforms. No longer are movies confined to the four walls of a multiplex or single-screen theatres. Going forward, while television becomes a stronger driver for movies with growing viewership and high repeat value, Internet and mobile screens are also gearing up for delivering movies to the cinema-crazy Indian audience in an aggressive way. Realising its latent potential, broadcasters like Star and Zee, online players like Yahoo India and YouTube and mobile firms like Airtel, Vodafone, Idea and value-added services providers are keen to monetise on films on all delivery platforms.

In all this, film producers are the real winner, having the power to not only make money through a theatrical release, but also on the sale of satellite rights, Internet rights and mobile rights. For broadcasters, Internet and mobile phone mediums are emerging as additional source of revenue on otherwise costly film acquisitions. On television, Bollywood films continue to perform robustly, driving revenues and delivering return of investments for both broadcasters and advertisers.

Movies on telly screen

Television channels have shelled out an average of R30-35 crore for acquiring the satellite rights for movies like Don-2, Agneepath, Krish-3, Dhoom-3 and others recently. However, the Internet rights are still much lower at a few crores for a blockbuster or a few lakhs for average films.

The Hindi general entertainment channels have led among the genres with a 27.4% share of viewership dominated by fiction and movies last year. Hindi movies broadcast on television cornered a genre share of 12% in 2011, almost double compared to previous two years despite the growing movie acquisition cost. This is because movies on television are generating over R800 crore annually for channels, almost double in last five years.

Industry data indicates movie acquisition cost has seen a rapid rise, growing at rates of 30-35% per annum over the past three years. This has been captured by shortening theatrical window and the growing demand for movies among broadcasters. The ability to recover the cost of such acquisitions is dependent on the spot rates. With sticky television viewers, advertisers are keen to buy spots and sponsorships for blockbusters like Singham, Bodyguard, Don-2 and Ra.One, among others. Bodyguard’s premiere on Star Gold generated ratings of 10.3 while Singham generated 8.8, much higher than say a high-drama IPL match or any other soaps.

“Cost of acquisition is high because of shortage of quality content. It is that simple. For every movie that is sold to a broadcaster, there are four movies that remain unsold. But we acquire movies for 7-11 years and that is the time it takes to recover the investments and generate profits,” says Hemal Jhaveri, general manager, Star Gold.

The importance of movies for a broadcaster has gone beyond advertisement revenue generation. In a fiercely competitive market, movie premieres are now considered essential to brand building and sustaining eyeballs for the channel. A key trend emerging in 2011 was the premiere of big movies on the movie channels of the broadcasters rather than the flagship GEC. Star network was the first to start the trend in order to establish Star Gold as a leading movie channel in the genre.

Star Gold premiered blockbusters like Singham, Ra.One and Zindagi Na Milegi Dobara during 2011 and continued with Rockstar in 2012. Zee and Sony have also experimented with the strategy, premiering relatively smaller hits like Double Dhamaal and Shaitan on Zee, and Mujhse Fraandship Karoge on Set Max.

Experts say not only are Hindi movies gaining prominence on television, the English movie genre is also growing rapidly. According to a FICCI-KPMG report on media and entertainment, the launch of Movies Now in high definition and surround sound two years ago helped increase the gross rating points of the entire English movies genre by 48%. As a result it is now closely competing with Star Movies for the leadership position. Key players in this space include Star, Sony Pix and HBO and Movies Now.

Selling of broadcast rights offers producers the opportunity of early liquidity, since broadcast rights are often sold before the movie is made, or sometimes even at the concept stage. For instance, Star has reportedly bought satellite rights for yet to be shot Dabangg-2 at R50 crore. Movie broadcast rights have largely moved away from syndicated deals, back to exclusive deals. Further, the contract duration has risen from five years to around seven years.

Movies on Internet

YouTube and Yahoo India have a dedicated movies corner on the web, attracting half-million users every week. Even The Times Group plans to launch BoxTV.com, a service that is expected to enable viewers to watch the latest movies and TV shows online. The group aims to target new-age consumers, and is in the process of introducing new products across the news and entertainment categories.

Intel has partnered YouTube BoxOffice, a destination for existing and new movies every month. The channel is available for free and there is no restriction on the number of movies you can watch. Users choose from a collection of over 1,500 titles.

Yahoo recently launched an online movieplex that hosts full movies and shorter movie based content. The challenge that portals currently face is the ability to adequately monetise the content.

Experts say the Indian Internet audience is currently spending over 9.1 billion minutes watching online videos each month, with entertainment as the leading category in online video content consumption, ahead of news and sports content. A recent study suggests over 40 million unique users from India watched online videos, including movies, in January alone, a good 25% jump in a 12-month period. “An average user consumes over 60 videos, including full-length films in a month in India. The leading destinations are YouTube, Yahoo, Network18 websites with entertainment and movies topping the charts. Movies on established online websites will be the next big thing,” says a senior media analyst.

Seconding it is Heman Jhaveri of Star Gold. “We also will be going online soon where consumers would be able to watch blockbusters at their leisure. Online will be big in future,” he says.

Movies on Phones

Smartphones, tablets and now even smart television sets provide interactive applications to users, which enable cutting edge services like live streaming through the Internet. Gaming consoles today are more powerful than yesterday’s mainframes. Users can now rent movies on demand with the click of a button. Movies, television shows and even songs become popular on social media platforms before they hit mainstream media. With such disruption brought about by technology, content owners and publishers should understand these technologies in order to assess their impact on business and take an informed stance on their use.

Source: Financial Express

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