At the time of this Pandemic, not only Bollywood, but films of many countries are also being released on OTT. As long as the crisis of the Kovid 19 pandemic continues in the world, such a system is expected to continue. However, there is no mathematics like box office in this system. That is, when the films are released in this way, you may not get to hear sentences like films with a gross of 100 crores or 500 crores.
According to a report, if a film is released directly on OTT these days, then OTT rights generate about 80 percent of revenue and satellite rights generate 20 percent of the profits. Know the mathematics of the business of films on OTT.
Why is it called OTT?In fact, the term OTT is a short form of over-the-top. When you got the facility to watch TV content on the Internet, that is, when you got rid of the cable box and you could watch all the TV programs on a smart phone in your hand, then this platform was called OTT. Streaming of web series, comedy programs and movies is quite popular in India as well as TV on OTT platforms.
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Many films have been released on OTT and many will be.
How do films earn from OTT?
The arithmetic of the earnings of films on OTT platforms is straightforward. OTT has to buy the rights to the movies for release or streaming. The producer gets a sum for the rights. This deal is different for different languages versions of the same film, that is, the rights of each version are different.
On the other hand, some films are made by OTT platforms. That is, the OTT platform for a particular film makes a deal. Like HBO is an OTT platform, which is specifically in the business of making movies for its platform. In this deal, it happens that the platform gives a fixed amount to the filmmakers and the producers make the film for a lesser amount, that is, the remaining amount is their profit.
How does OTT make profits?
If the filmmakers are making a profit in this way i.e. OTT platforms are paying them, then how are these platforms profiting… There are three main ways in this business.
Every user of TVOD i.e. OTT, when downloading any content, pays a fee for it. That means transaction on every download.
SVOD means that any user pays a sum of money every month or for a time frame and can see all the contents of that platform.
AVOD is the third way to see content, there is no charge, but the user has to see advertisements in between the content. Like YouTube is free but will have to watch the edits in the middle of the video. OTT is earned through these advertisements.
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Overall the business model on OTT is very simple. First the platform spends money to make or buy its content and after that the content is sold by taking a charge from the audience or users. Creating an OTT platform is a huge haptic process and at the same time it is a negative cash flow system in the business world. On the other hand, many platforms also provide payment systems such as per week, per month, daily and per annum for the convenience of the users.
Although OTT is a platform as an alternative to cinemas and has its own disadvantages, but still not only the filmmakers but also the audience is waiting for theaters to open. In the words of famous filmmaker Shyam Benegal, the cinema that gives a larger than life experience is not fully available on TV or small screen. Watching a film in a cinema hall is a social celebration and a collective experience. Movies can be seen through many mediums, all have their own importance.