How streaming platforms like Netflix, Amazon are changing the landscape of Tamil cinema

Surendhar MK

June 03, 2018 11:21:22 IST

Until six months back, with the dwindling satellite market in Tamil cinema, theatrical ticket sales was the supreme source of revenue for producers. However, the advent of digital platforms like Netflix, Amazon Prime, and SunNxt, especially since the beginning of 2018, has gradually become an important point of discussion in Tamil film business, which is expected to undergo a significant change in three years.

Before the full-fledged penetration of digital technology in the industry, satellite market offered the most lucrative and assured returns for producers, unlike the volatile theatrical revenue stream. However, satellite rights for more than 300 Tamil films have remained unsold in the last three to four years. While television channels criticized the tackily produced movies and archaic storylines finding its way to the satellite market because of the easily accessible digital technology, TRAI's (Telecom Regulatory Authority of India) cap on advertising time by permitting only 12 minutes of commercials per hour served as the final nail in the coffin.

Streaming giants Netflix and Amazon Prime. Facebook

Streaming giants Netflix and Amazon Prime. Facebook

As a result, television channels tapered their focus to films starring only high-profile stars and a vast range of deserving medium-budget and low-budget films continued to remain unsold. Now, the emergence of digital platforms has provided a glimmer of hope for producers.

While streaming platforms keep a weather eye on popular big star movies, they are also giving equal importance to content-rich, acclaimed films. However, the OTT market for Tamil films is currently in a very nascent stage, and producers are pulling out all the stops to land a digital contract since it would meet a significant part of the investment. Now, the producers have started to divide the satellite and digital rights separately in the hope that they will bag a deal with any of the streaming platforms.

Suriya's Thaanaa Serndha Koottam was reportedly sold to Amazon Prime even before release for Rs 6.25 crore, which is nearly 56 percent of satellite rights of the film's Tamil version. Now, the digital rights of Karthi-Sayyeshaa's village drama Kadaikutty Singam have been sold to Amazon Prime well ahead of the film's release. It must be noted that the makers have not even released the film's teaser or trailer yet. According to trade sources, the digital rights (reportedly with Amazon Prime) of Rajinikanth's 2.0 fetched nearly 72 percent of its satellite revenue of Rs 110 crore, which marked India's single-largest broadcast deal (Indian satellite rights for all versions sold to Zee Network for a period of 15 years).

In fact, for adult comedies, which have no takers in satellite, digital platforms have opened a new revenue stream. For super-hit adult films like Hara Hara Mahadevaki and Iruttu Araiyil Murattu Kutththu (reportedly sold to a digital player already), digital market has amplified the already-good theatrical revenue to a different level.

Talking to Firstpost, National award-winning writer and producer Dhananjayan said, "The digital revenue is available only for selected films. It has not created a massive impact in the industry; not yet. Digital players are very selective. They have their benchmarks and want to pick movies that they believe will work. So, as long as the selectiveness is there, the paradigm is not going to change."

One of the producers who have an enviable record on OTT platforms is SR Prabhu. In the last two years, Amazon Prime has procured five (Joker, Maanagaram, Kaashmora, Theeran Adhigaaram Ondru, Aruvi) out of six productions churned out by Prabhu's Potential Studios, and Dream Warrior Pictures. However, Prabhu also concurs that OTT segment is yet to create a marked influence on Tamil film industry.

"I wouldn't say the arrival of digital platforms has created any revolution as such. For satellite channels, their library has grown. But, there is a split in the audience who watch television and digital platforms. Either they acquire films which have good theatrical run or boast good artist value. Every time, their strategy also changes. When channels align their buying approach based on TRP, digital platforms rely on their data that keeps changing frequently," Prabhu told Firstpost.

According to a study published by Ernst &Young and FICCI (Federation of Indian Chamber of Commerce and Industry), digital subscription in India made a substantial impact in 2017, with a growth of 50 percent. "As per industry estimates, there are around 2 million paid digital subscribers across application providers, and between 1 and 1.5 million customers who have moved entirely to digital media consumption. By 2020, we expect there to be 4 million digital-only consumers who, along with millions of other tactical and mass customers will generate subscription revenues of INR 20 billion," says the report.

The above numbers don't come as a surprise since the study also points out that 'India is expected to become the second largest online video viewing audience globally by 2020.' While global players like Amazon and Netflix have set their eyes on marquee acquisitions from regional industries, homegrown platforms like SunNxt (owned by Sun Network) and ZEE5 (run by Essel Group's Zee Entertainment Enterprises) have started to make inroads into the competitive OTT market.

Still from Aramm (left); still from

Still from Aramm (left); still from Brindhavanam (right). Facebook

Talking about the shrinking release window between a film's theatrical release and its availability on OTT platforms, Prabhu said, "As long as you don't need to pass on the risk to another buyer and you keep it to yourself, you don't need to worry about the release window." His production Aruvi, which was available on Amazon Prime just four weeks after the film's theatrical release, kick-started this trend.

Sun Network, which had toned down its satellite acquisitions by a huge margin and limited its choices to big star movies, has quietly started procuring even small films like small and medium budget films like Sathya, Annadurai, Sathriyan, Brindhavanam, Aramm, Gulaebaghavali, etc. And, digital platforms have become the only legal avenue to watch a film following its theatrical release in a short window of four to six weeks. A biggie like Ajith's Vivegam got premiered on SunNxt first before the movie was showcased on television despite the fact the Sun TV owned the satellite rights. Such is the demand to boost the subscription base in the country, which currently has close to 30 OTT players.

While the OTT offerings for certain Bollywood films are higher than satellite revenue on few occasions, that kind of trend is yet to emerge in Kollywood. "If they are buying 12 films a year now, it may increase to 24 films next year if there is an increase in the subscription base. I guess five years from now; they may purchase one film a week, which will amount to 52 films a year. Then, it will create an impact in the business," noted Dhananjayan.

The EY report also estimates that by 2020, there would be around 4 million people who primarily depend on OTT platforms for their content in India. According to FICCI, digital revenue generated Rs 8.5 billion for the film segment in 2017, an increase of 40 percent over 2016.

While securing a deal with digital players still remains to be a distant dream for a major number of producers, there's no denying the fact that the demand for the digital rights of star vehicles is on a new high.

Updated Date: Jun 03, 2018 12:39 PM