Are we living in the age of a Netflix led Streaming Rights Bubble?
Are we living in the age of a Netflix led Streaming Rights Bubble?
Plus Indian Blockbusters and their Streaming Rights
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Agenda
The Big OTT Deals: Indian Blockbusters and their Streaming Rights
How does Netflix decide the price of streaming rights?
And….Action!
The Big OTT Deals: Indian Blockbusters and Their Streaming Rights
In recent years, the OTT landscape has witnessed some astonishingly expensive deals for streaming rights, driven by a combination of blockbuster content, star power, and the increasing appetite of platforms like Netflix, Amazon Prime, and others to grab the best of Indian cinema. Here’s a look at some of the most expensive OTT streaming rights acquisitions for Indian films in recent times:
Pathaan
Shah Rukh Khan's much-anticipated return to the silver screen with Siddharth Anand’s Pathaan proved to be a monumental success. With Deepika Padukone and John Abraham in pivotal roles, the film collected a whopping ₹1,050.30 crore globally at the box office. The digital rights of Pathaan were reportedly sold to Amazon Prime Video for ₹100 crore, adding to the film's massive revenue generation.
Leo: Bloody Sweet
Leo: Bloody Sweet, starring Tamil superstar Thalapathy Vijay, marked his reunion with director Lokesh Kanagaraj. The film was a blockbuster hit and became one of the most expensive OTT deals for a Tamil film. The digital rights for Leo were sold for ₹120 crore, setting a benchmark for Tamil cinema.
Salaar Part 1: Ceasefire
Directed by Prashanth Neel and featuring stars like Prabhas and Prithviraj Sukumaran, Salaar Part 1: Ceasefire has reportedly secured the highest OTT deal for a South Indian film. Netflix is said to have acquired the film’s streaming rights for ₹162 crore, making it a much-anticipated release across digital platforms.
Jawan
Another Shah Rukh Khan starrer, Jawan, directed by Atlee, shattered records at the box office, grossing ₹1,148 crore globally. The film, which also stars Vijay Sethupathi, Nayanthara, and others, sold its OTT rights to Netflix for ₹250 crore. Jawan’s pan-India release in multiple languages, including Hindi, Tamil, and Telugu, only bolstered its appeal.
Pushpa 2
Even before its release, Pushpa 2 has already made headlines with its OTT deal. Netflix acquired the digital rights for ₹275 crore, making it one of the most significant deals in Indian cinema. Starring Allu Arjun, the sequel is set to hit theaters soon, but the buzz around its OTT release is already soaring.
KGF: Chapter 2
KGF: Chapter 2 by Prashanth Neel, starring Yash, set new benchmarks both in box office collections and OTT deals. The film was a massive success globally, grossing between ₹1,200-1,250 crore. Amazon Prime Video reportedly purchased the digital rights for ₹320 crore, one of the biggest OTT deals for an Indian film.
Love & War
Sanjay Leela Bhansali’s upcoming Love & War, starring Ranbir Kapoor, Vicky Kaushal, and Alia Bhatt, has reportedly secured a base price of ₹130 crore for its streaming rights with Netflix. Insiders believe this figure could rise depending on the film's box office performance, setting up Love & War as another grand Bhansali project to watch out for.
RRR
SS Rajamouli’s RRR, starring Ram Charan and Jr. NTR, took the world by storm, grossing approximately ₹1,200 crore globally. The film’s OTT rights were reportedly sold for ₹350 crore, making it the most expensive digital deal for an Indian film. The film also garnered international accolades, including an Oscar and a Golden Globe Award, further amplifying its value on digital platforms.
[With some inputs taken from Mathrubhumi]
How does Netflix decide the price of streaming rights?
Netflix considers several key factors when deciding how much to pay content creators / film studios for streaming rights’ acquisitions, ensuring a balanced approach that aligns with their platform’s needs:
Popularity and Demand: Netflix carefully evaluates the potential popularity and demand for content among their subscribers. This involves analyzing viewership data, social media trends, and audience demographics to forecast the content's appeal.
Quality and Originality: High-quality, original content is highly valued by Netflix, especially if it can help differentiate their platform from competitors. They’re often willing to pay a premium for well-produced or critically acclaimed shows and movies that offer a fresh or unique concept.
Competition: The level of competition plays a significant role in Netflix's pricing decisions. With competitors like Amazon Prime Video, Disney+ etc vying for the same content, Netflix must often match or exceed offers from other platforms to secure exclusive rights.
Long-Term Value: Netflix assesses the long-term potential of content to drive subscription growth and retention. If they believe that a movie or show will have lasting appeal, they may invest more upfront.
Audience Size and Engagement: Netflix also looks at the potential size and engagement level of the audience. Content with the ability to attract large, engaged audiences is often more valuable and commands a higher price.
Production Costs: The production costs of content are factored into negotiations. High-budget productions, like blockbuster films or big-ticket TV series, often come with higher price tags, and Netflix accounts for this in their deals.
Exclusivity: The value of exclusive rights is crucial for Netflix. Exclusivity ensures the content is only available on their platform, which can drive subscriptions and brand loyalty. This can result in Netflix paying a higher amount to secure exclusive content.
Forecasted Revenue: Netflix estimates the potential revenue that content will generate through subscriptions and any ancillary streams, like merchandise or licensing deals. The projected financial return often justifies their investment.
Prime Video OR Netflix ~ Every Movie Producer’s Dream for Streaming Rights’ $$
It's clear that in many streaming markets, especially in India, two dominant players—Netflix and Amazon Prime Video—are the ones with the financial clout to secure streaming rights for major content and big star cast releases. If these two platforms pass on a deal, the content is typically offered to Disney+ Hotstar, followed by SonyLIV and Zee5. JioCinema, however, plays a secondary role as they focus primarily on their own content production through Jio Studios and reserve their significant investments for sports streaming rights.
Speaking with industry insiders, it becomes evident that this near-duopoly in the Indian streaming rights market for mainstream movies’ streaming rights has an impact on the entire film economy. The limited options outside of Netflix and Prime Video lead to constraints for filmmakers, especially when it comes to paying the hefty fees that top stars demand. For instance, actors like Ranbir Kapoor are known to charge as much as ₹75 crore per film, making the economics challenging without multiple strong bidders in the OTT rights market. This lack of competition ultimately distorts the economic landscape for big-budget films and raises the question: Are we living in a Netflix financed rights acquisition “bubble”?
JioCinema carries all the HBO content in India and the first episode of “The Penguin” does not disappoint (8 episodes until November 10th ‘24) - Colin Farrell in the lead role is a rockstar and reminds us again of his unquestionable talent. Not exactly a Sopranos, however gritty, smart and slick + if you are a fan of all things “Italian”, “Mafia” and “Gotham / NYC”, you will love this one. Next episode is Sunday, 29th September.
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