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  • Writer's pictureShreyan Shrimali

Cinema vs Streaming: The Evolution of Entertainment

Updated: Jan 23

We all love movies. Nothing can beat the feeling of watching our favourite superhero on the big screen, but not for a long time. Today, we see there is a shift in consumer behaviour; there are fewer people going to the cinema hall; instead, they choose to be in their own space and watch it on OTT platforms.

We see more and more cinema halls shutting down, and investors are investing more in digital platforms. This shows that fast internet is shaping the world even in developing countries like India, but will cinema owners be satisfied with this change? Will they make the same profit as before?

Even though sales of cinema halls are increasing now, they are still significantly low as compared to pre-pandemic. Check this. For the first week or two after a new release, theatres receive 10–20% of the proceeds from ticket sales for that film, with the remaining funds going to the distributor. After that, the split alters week by week until the theatre keeps 80–90% and the distributor receives the remaining portion. Hence, cinema owners want a window where film is exclusively available in the cinema hall. The length of that window had been the subject of decades-long talks between theatres and studios, and it appeared as though studios had increasingly gained the upper hand. The studios now have more power than ever, thanks to the pandemic, though. They could no longer visit movie theatres at all, which gave rise to OTT. This opens new opportunities to make money for OTT platforms (Netflix) like SVOD, TVOD, and AVOD. Know more here.

These OTT platforms are becoming considerable successes in the market, which we can see through Netflix's stock price. Despite many changes made recently to attract more consumers, The share price of Netflix has increased by 150% since June of last year and by 43% so far in 2023. According to the facts, both Netflix's digital ad business and its Standard with Ads tier are thriving.

Let’s dig deep into why OTT platforms are becoming popular.

One of the best parts is Accessibility and convenience, people don’t want to stuck for 3 hours in a cinema hall now, they want is freedom of time. Through the help of OTT, one can watch movies on their mobile devices.

Secondly, through the help of big data and algorithms, OTT platforms can provide personalised services and diversified content, but sometimes it can be harmful as well, which will be understood later in this blog.

The question arises will all these benefits kill the Cinema industry?

As per one video on Nikhil Kamath Clips, PVR Director, the total number of screens in India is not going up. He also mentions that in a country like India, coming to the cinema hall is like an event, as people are more interested in watching larger-than-life films. But recently, the content which was shown in the cinema was only liked by some as there is a vast difference between urban and rural choices. A movie like Gehraiyaan did well in the city but was disliked in small towns, which again gives the upper hand to OTT platforms. On the other hand, we can see when a movie like Pathaan launches, and there are people who come to a cinema hall to watch the movie. OTT platforms can replace the feeling of watching films in the cinema hall. The cinema will remain to experience breathtaking special effects on a calibrated 50-foot screen with Atmos audio for now. Netflix will be placed to binge-watch or see dramatic movies just like reading books used to be. Many people assume that movies only contribute 60% of the income and the rest comes from other services like food, which is correct, but if there are no movies, then people will not come to just eat in cinema halls.

That is the reason many cinema halls are expanding their source of income by showing World Cup matches on big screens, which allows them to generate more revenue.

The future of OTT through VR.

In one of my previous blogs, I mentioned Apple Vision Pro and how it will mould more consumer behaviour. Now we know that OTT is stuck on the small screen, but technology is better. Through the help of VR, people will be able to enjoy cinematic experiences at their homes.

It will help fans to get a more immersive experience. Read more here

This does not mean that everything is excellent in OTT. There are many concerns which are arising in OTT platforms, and one of the main issues is that nowadays, we see there is a lot of explicit content and language shown in OTT as these platforms operate in a very unregulated environment, which can be harmful to underage users. Not only this, but sometimes these platforms can be addictive, which leads to a waste of energy and time for many people.

In conclusion, despite the massive growth of OTT platforms, there are many concerns to be addressed, including explicit content issues; the unregulated environment in which these platforms work can be problematic in future.

In essence, cinema halls are not dying, but they are evolving with changing consumer preferences & technology. These platforms are becoming a go-to choice, but traditional cinema holds a unique approach, larger than life and immersive experience.

If you enjoyed this blog, I recommend exploring the videos.

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