Digital-first movie release as a trend is here to stay for the long-term: Pradeep Dwivedi

Media veteran Pradeep Dwivedi took over as the CEO of Eros STX Global Corporation - India just before the Covid-19 induced lockdown in February 2020. Dwivedi has had a well-rounded career in advertising and media business over the last two decades.

In an interaction with exchange4media.com, Dwivedi talks about the challenges being faced by the Indian film industry and the company’s plans for its film and OTT businesses.

Excerpts:

The Indian film industry is yet to recover from the shock of the pandemic-led lockdown, how is Eros coping with the challenges that are thrown by the pandemic?

These 10 months have been very challenging on multiple fronts. It is broadly divided into two parts. One is the supply side which is the film product, shooting, and signing of new projects. That got adversely impacted. Earlier there were lots of restrictions but now we are putting things back on the floor. We used this time to finish whatever films were in the post-production stage. We have gone ahead and finished those projects to ensure that they are ready for release. ‘Haathi Mere Saathi’ a Rana Daggubati movie which we have shot in three different languages - Hindi, Tamil, and Telugu. We are looking to launch this movie in March. Similarly, we will be coming out with few other movies over the next three to four months.

The bigger issue for us has been on the demand side as theatres were shut. Only towards November/December, some theatres had started opening up. Even now people are hesitant as the occupancy levels haven't gone up. With the vaccination roll-out and social distancing norms, capacity will start building up for theatres. That will give us the advantage to showcase a lot of good movies. A case in point is if you look at what is happening in the South. If you look at Tamil Nadu, the theatres were full as soon as they reopened. While the previous festive season was dry, this year between Holi and Eid leading up to Diwali, we will see a lot of movies from multiple production houses and studios coming out. So, things should get normal in the latter part of this year.

Do you think there will be an over-supply of movies in the market considering there are pending projects awaiting coupled with the launch of new projects?

Initially, even we were apprehending that there will be an over-supply situation due to the backlog that has got created. Interestingly, what is happening is that the models of monetising are starting to change. Traditionally, the model was that you do a theatrical window and then you go to satellite broadcast and then you look at going to digital. But now, going straight to OTT has gained a lot of currency. What is happening is audiences are expecting movies to come straight on OTT. If the movies are not extremely high-budget for OTT platforms to buy then many of these movies will not even wait for the theatrical window and will go straight to OTT.

We are premiering American sci-fi thriller ‘Greenland’ straight on Eros Now as part of our newly launched Premium Video-On-Demand (PVOD) offering ‘First Day, First Show’. In the normal course, we would have gone ahead with the theatrical release. However, we believe that audiences are not fully comfortable going back to the theatre and that is why we have done this option wherein users can pay half the ticket price that one would have paid in a multiplex and still enjoy the movie in the PVOD window in the comfort of their homes. Basically, a lot of others will come as well.

Is direct-to-digital a sustainable model in the long-run?

You have to look at it from two or three dimensions. If you look at digital-first platforms like Netflix or Prime Video they have adopted both own content production as well as acquisition. If you look at Netflix, they have been commissioning new content rather than buying content. If you look at Warner Media, they have announced that every movie they produce will be released simultaneously on OTT platforms as well as theatres during the entire course of the year. They are believing in the value of a digital-first audience and the way audience preference is changing. There is obviously the overall cinematic experience of going to a theatre and watching a movie. However, from a sheer monetisation standpoint, the whole Hollywood and Bollywood industry is pivoted towards digital in a significant way. I don't think it is a temporary phase and we will go back to normal. Digital-first movie release as a trend is here to stay for the long-term.

When do you expect things to return to normal as far as production is concerned?

In the next six months, production will be fully normal and production schedules will get back on track. We are already seeing production facilities in overseas markets being available in sanitised form. From a domestic standpoint, outdoor shoots can be safely done right now. For indoor shooting, we have to take lot more precautions because there a lot of people in a very closed area. I am hopeful that in the next three months things will start going back to normal on production and that should give us good content to go for calendar 2022.

What is Eros' film slate for 2021?

There are two parts to it. So as far as Hollywood movies are concerned, we have a bunch of 7 to 8 movies that are coming in apart from ‘Greenland’. We have marquee content STX Films such as Horizon Line, Queenpins, Copshop, American Sole, The Marsh King's Daughter, Run Rabbit Run, Devotion, Every Note Played, and Memory. These will also be released first on Eros Now in India over the next 18 months.

On the Bollywood front, we are working on some very interesting projects not just directly in our own business but in our subsidiary Colour Yellow as well. ‘Haathi Mere Saathi’ is the big launch. We also have ‘Rom Rom Mein’. Then there are a bunch of other movies that we have planned.

We are also one of the pioneers in Bollywood content in global markets and there our digital strategy of Eros Now with its worldwide distribution also works very well. So, while we will look at the theatrical window for some movies but by and large, we will leverage a lot of new content on our streaming platform.

Has the relationship between production companies and multiplexes got fractured due to direct-to-digital movie premieres?

I believe that we are one extended industry and we have to carry all the constituents along. As you can see theatres are reopening with some restrictions so big movies are headed their way. I think direct-to-digital is a short-term phenomenon as during lockdown interests were clashing and producers who had invested a significant amount of money in their movies were not able to find a way out since theatres were shut. So, they wanted to monetise their content, and OTT players were willing to pay top dollars. It's an open economy and there were demand and supply dynamics at play. Last year, there was no demand from theatres for movies while there was a demand from OTT. This year if the demand comes back from theatres and OTT demand remains the same, we will some bit of it pivoting back to theatres.

What is your plan for Eros Now?

We have 2-3 core strategic pivots or plans on which we are working. At the most fundamental level, with the Eros Now SVOD proposition what we are doing is enriching it with new content and we have announced 54 new pieces of content across short-form, web series, originals, and movies in our announcement in December. We also have some very interesting line-up planned. We want to stay on top as far as content is concerned. As far as distribution is concerned while we have large partnerships with telcos and digital players we believe in connecting directly with our consumers and create attractive price points for customers to come directly to us which will be helpful for our distribution strategy. We are investing significantly in improving our distribution eco-system. The third pivot for us is the international distribution which remains extremely important for us and we are investing a lot of time and money on that as well.  

We also look to occupy niches and spaces in the market that are not fully exploited. The ‘First Day, First Show’ that we are doing with ‘Greenland’ is just the start. You will see a lot more content coming in to fill that segment. We are also looking at regional languages besides Hindi. The stories might be universal in nature but they need to have a compelling relationship with the local market. Today, urban customers might be shifting to OTT but in tier-2 and 3 cities there is a big audience base that relies on regional TV content because they don't have a compelling content offering on digital. We are addressing this problem through investments in content and talent. The other way we are addressing this is through technology. We have a partnership with Microsoft where we will use their artificial intelligence speech translation engine to dub content in multiple Indian and global languages. We are creating a new kind of OTT platform where people can access worldwide content but in their own language.

What is your strategy to monetise OTT rights? Is the priority to exploit the value by selling it to the highest buyer or use it to build Eros Now?

We create some content exclusively for Eros Now. We are clear from day 1 that this content is going into OTT because of the kind of budgets they have, the audience, and the content that we carry on OTT. There are certain big-budget films that traditionally should have gone to theatrical but we have not managed to get them released. For example, a film like ‘Haathi Mere Saathi’ could have gone to theatrical or we could have taken it to our own platform. But we have gone ahead with the theatrical launch. So, monetisation depends on the kind of movie and the budget of a movie. There could be a movie that we would like to place on other OTT platforms which financially makes sense. We produce as well as co-produce movies. Sometimes, we just take distribution rights or we have to take the aspirations of the partners in terms of the best way to monetise the movie. So that decision depends on the kind of money involved and the partnerships that we have.

With OTT players aggressively acquiring movies, how has that impacted the value of satellite rights?

There are two reasons why satellite rights rates and monetisation has gone down. One is of course the digital premiere. Digital has replaced satellite as the port of call. Secondly, the tendency of advertisers to spend money on advertising has also come down. With ad revenue under pressure, the ability of broadcasters to pay a significant premium for satellite rights has gone down. So, both the ability to pay and the competitive intensity from OTT have led to a reduction in the kind of revenue we had from satellite rights compared to pre-pandemic. I feel that broadcasters will come back aggressively to compete for movie rights with OTT players once the ad revenue situation improves.