Due to the massive rise of OTT platforms during the COVID period, the industry initially saw it as a golden phase for producers, as recoveries were assured regardless of a film’s theatrical performance. Because of this perceived security, producers offered huge remunerations to stars and directors, relying largely on paper recoveries.

However, the side effects of this model have recently started to show. Satellite values have crashed, directly impacting theatrical performance and overall profitability. Recently, OTT platforms have also begun closing deals at much lower rates compared to the past. Except for a few big-ticket combinations and highly anticipated films, most movies are now receiving only around 50% or even less of their expected OTT valuations.

The situation may worsen further. As a result, producers have started revising their financial calculations. Films that are already announced or on sets are facing serious challenges due to the OTT market slowdown. Going forward, producers are being far more cautious and are no longer committing blindly to inflated budgets or remunerations.

Instead, they are evaluating how much theatrical business a film can realistically generate and planning budgets accordingly. For some stars and directors, remuneration cuts have already begun, and this trend is expected to extend across the industry. Many may also be asked to reduce fees or take a share in the film’s business to help control costs.