Shares of multiplex operators plunged on Tuesday, a day after Ambani said premium users of JioFiber, a feature-rich wired broadband service, will get to watch the latest movies on the first day itself. On the BSE, shares of PVR Ltd and Inox Leisure Ltd, India’s largest and second-largest multiplex operators with 800 and 600 screens, respectively, fell more than 4% each. JioFiber will start offering the First Day First Show service from mid-2020.
RIL shares surged 9.72% on Tuesday, the biggest jump since February 2017, even as the benchmark Sensex shed 1.66% to 36,958.16 points.
In separate statements on Tuesday, both PVR and Inox said producers will need to choose between theatrical release and other platforms in the early days of a release.
However, for Jio to pull it off, it first needs a massive content library.
“A part of this could come from the films under production at Jio Studios," said film trade and exhibition expert Girish Johar. Known for hits such as romantic comedy Luka Chuppi released this year, Jio Studios has announced a bunch of Hindi movies for the next year, including Ayushmann Khurrana and Yami Gautam-starrer Bala and director Imtiaz Ali’s next with Kartik Aaryan and Sara Ali Khan.
The bigger chunk, however, will come from films acquired from other producers. Currently, there is an unspoken agreement to maintain an approximately eight-week window between theatrical release and digital premieres. Industry experts such as Johar said Jio will have to pay filmmakers a big chunk of their investment upfront and ensure smooth returns on investment because theatres may not screen films if they’re also streaming elsewhere. Jio will need to keep lead actors on its side as well, since they often ensure impressive opening figures by pulling in crowds. While digital deals for films are currently struck at ₹30-40 crore, Jio could take this several notches up, compelling streaming platforms such as Netflix and Amazon Prime Video to act.
Films such as Vikram Bhatt’s 1921 and Rajkummar Rao-starrer Shaadi Mein Zaroor Aana have had their day one shows disrupted when multiplex chains pulled them down as they appeared on over-the-top (OTT) platforms simultaneously or within days of their theatrical release.
“It could, however, be a good option for producers making small films that anyway don’t draw crowds to theatres," Johar said, adding that the exhaustive library Jio is looking at is likely to be built on the back of non-star driven, niche films.
To be sure, though, if Jio manages to pull this off, it could mean a serious threat to the Indian film exhibition business.
Domestic theatricals contributed about ₹10,210 crore of the total ₹17,450 crore generated by filmed entertainment in India in 2018, according to the Ficci-EY media and entertainment industry report 2019. Film exhibition chains are unlikely to take the threat lying down.
“For decades, theatrical release window has been a valuable model for exhibitors and producers alike," PVR said in a statement. “In India and globally, producers have respected the release windows and kept a sacrosanct gap between the theatrical release date and the date of release on all other platforms, i.e. DVD, DTH (direct-to-home), TV, OTT etc. Cinemas continue bringing people together to share a communal experience, this irreplaceable element which is at the core of theatrical experience, continues to deliver a robust box office performance not just in a growing market such as India but also in more mature markets such as the US, China, Europe etc. where cinemas have regularly competed with many similar initiatives like Netflix original movies," it said.
The producer of the film is the owner of the creative content and is therefore entitled to choose the platform for distribution and consumption of his content, Inox Leisure said in a statement.
“However, in view of this mutually agreed exclusive theatrical window, he would have to choose between theatrical exhibition or release on any other platform, since release on both simultaneously would breach the mutually agreed exclusive theatrical window (of eight weeks)," it added.
Cinepolis India declined to comment.
Actors such as Salman Khan, Ajay Devgn and Mahesh Babu have also announced forays into film exhibition in recent times.