Video streaming platforms renegotiate deals for box-office duds

  • Film trade experts say Thugs is not the only instance of a Bollywood film being asked to renegotiate its digital deal
  • There have been others, such as the Gold, Yamla Pagla Deewana: Phir Se, and Aiyaary

New Delhi: Bad luck for Yash Raj Films’ Thugs Of Hindostan did not end with its lacklustre box-office performance. The film starring Aamir Khan and Amitabh Bachchan, which had dipped abysmally after its Diwali opening, had to renegotiate its digital deal with streaming service Amazon Prime Video, said film trade experts on condition of anonymity. The streaming service paid half the 35 crore it had initially promised Yash Raj Films.

A spokesperson for Amazon India said the company does not comment on speculation. Yash Raj Films declined to comment.

Film trade experts, however, say Thugs is not the only instance of a Bollywood film being asked to renegotiate its digital deal. There have been others, such as the Akshay Kumar-starrer Gold, comedy drama Yamla Pagla Deewana: Phir Se, and action thriller Aiyaary, all of whose box-office earnings fell below expectations, forcing their streaming partners to rethink acquisition prices.

Deals are struck for big-ticket movies before they are released as video streaming companies look to make their presence felt in a market cluttered with more than 30 services. And movies are the most heavily consumed properties on these platforms.

“It’s important for filmmakers to be responsible for the end creative, and box-office collections are a parameter for identifying the popularity of a product, which contribute to what the sale price should be," said a senior executive at a video streaming firm.

“Movies drive a large part of the consumption on over-the-top (OTT) video streaming platforms—even more than on television," said Ali Hussein, chief operating officer, Eros Now.

On the other hand, after investing a certain amount of money (in a film), every producer wants to ensure decent profit from the pre-sale. “If a film doesn’t perform that well at the box office and there is a subsequent renegotiation, it affects the whole calculation," said Shibasish Sarkar, group chief executive officer, content, digital and gaming, Reliance Entertainment. “The problem is the producer will not find another taker if the film has not performed and he doesn’t have an option but to sit at the renegotiation table. Plus, ultimately, he also has to take the next film to the platform; it’s not a one-off thing."

The buyer’s perspective, Sarkar added, is that so many players have come up in the OTT space that people are forced to compete and put money on the table.

And while some OTT players do not link the acquisition cost of a film to its box-office performance but pay a minimum guarantee depending on its likely resonance with the audience, the buoyancy for spending big bucks on big-ticket films will not die anytime soon.

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