Despite being infamous for box office volatility, the theatrical business is fast drawing digital-first players seeking scale beyond streaming.
Kuku, the digital entertainment company behind platforms like Kuku FM and Kuku TV, has announced its expansion into theatrical-led cinema with its first Hindi feature film, Indian Institute of Zombies.
Firms like Collective Media Network and TVF (The Viral Fever), known for OTT and digital projects, also have theatrical releases scheduled.
Industry experts say that while cinema remains unpredictable in the short term, films continue to be one of the most powerful formats for building large-scale intellectual property and cultural relevance.
Beyond box office
Digital-first companies are not looking at films only through the lens of theatrical box office—they see them as long-term content assets that can travel across streaming, satellite, music, and international platforms. For many, film production is a natural extension of an ecosystem already built around audience data, creators, and cross-platform storytelling.
“Digital platforms have spent years building audience trust, understanding consumption patterns, and identifying what truly resonates. Film production is a natural extension of that insight. It allows you to take stories that have already connected with audiences and scale them into cinematic experiences designed for the big screen,” said Anuj Gosalia, founder and CEO of Terribly Tiny Tales (a part of Collective Artists Network).
At the same time, the economics of filmmaking are evolving, Gosalia pointed out. Technology and AI are making production more efficient, allowing creators to focus budgets on what really matters—story, performances, and visual ambition. Add to that brand partnerships and diversified revenue streams, and films today are less dependent on opening weekend pressure alone. Theatrical becomes the centrepiece of a larger content lifecycle, not a standalone gamble.
Data-driven bets
Kunj Sanghvi, producer and senior vice-president at Kuku, said the company is targeting the sweet spot that has consistently outperformed in Indian cinema: low-budget, high-concept films made without stars, where the idea does the work that star power used to do.
“Established studios have advantages in theatrical distribution muscle and legacy talent relationships, and we respect that which is why co-production and smart partnerships are part of our playbook. But what they don't have is what we do: a direct relationship with over 100 million users, proprietary data on what stories resonate, and an AI-native production pipeline that lets us move faster and leaner than any traditional studio setup,” Sanghvi added.
Companies like Kuku and Collective believe their strengths lie in insights on genre preferences, narrative hooks, and viewing behaviour across languages and geographies. That means when they do make a film, it's a calculated, high-conviction bet on a specific story with a defined audience.
Sanghvi said the firm will pick titles where it believes the IP has legs across formats and where the concept is native to the mobile-first audience it serves.
“The move is not primarily about chasing the box office. It is about format diversification using existing assets — audience data, IP libraries, AI tooling, and creator relationships — to enter a high-profile medium at a structurally lower cost and risk threshold than incumbents face,” agreed Tarunesh Madan, co-managing partner at Amrop India, a global executive search and leadership advisory firm that closely works with companies in the media and entertainment sector.
“Unlike traditional studios, digital platforms can test genres at a micro scale first. Kuku validates stories as audiobooks or microdramas before greenlighting theatrical projects, transforming a blind bet into a data-informed decision. These digital-first companies also use proprietary AI models to predict potential hits, score incoming story pitches, identify weak plot points and cliffhangers, and analyse user consumption behaviour,” Madan explained.
Capability gap
That said, several new capabilities still need to be acquired or strengthened. These include risk capital governance, such as film-level financial oversight, co-production structures, and revenue waterfall modelling—areas that are relatively new for platforms accustomed to subscription-led metrics. They also need deeper expertise in physical production management, long-format creative leadership, and theatrical P&A execution, including exhibitor relationships.
“Initially, most digital-first entrants are likely to focus on content-driven films, youth-oriented stories, and mid-budget projects where creative differentiation matters more than sheer scale. Their strengths often lie in understanding younger audiences, digital marketing, and creator-led storytelling,” said Sanjay Dwivedi, group CEO and group CFO, Balaji Telefilms Ltd.
“Established studios, on the other hand, still hold advantages in large-scale execution, theatrical distribution relationships, and experience in managing big-budget productions. However, the industry today is increasingly collaborative, and new players can carve out meaningful space if they remain disciplined about budgets, content selection, and audience targeting,” Dwivedi added.