During corona time the OTT platforms changed the South Indian film industries’ dynamics as they bought films for massive prices. Down the line five years, the situation has changed, and now the producers are struggling to sell the OTT rights of films.
Because of the sudden surge in the digital market during the COVID-19 period, the industries thought it would be a golden chance to recover the budgets irrespective of results, and with this, the budgets of the movies and stars’ remunerations also got increased.
The Rise and Fall of OTT Platforms effect movie production in South Indian Film Industry
But the rise of OTT unexpectedly decreased the theatrical performance of films, followed by the decline in the satellite rights and dubbing rights.
Later, even the OTT platforms also started reducing the prices, and due to this change, many projects that were announced were shelved. As a result, producers are finding it tough to sell the OTT rights for films.
The demand and importance of OTT platforms have significantly increased in recent years
This issue has been a big concern over the last few years, and Kollywood analyst Sreedhar Pillai from the Tamil industry has made an analysis of the entire issue.
Leading OTT platforms like Netflix, Amazon Prime Video, and JioHotstar have introduced stricter rules when buying digital rights from film producers. They are now less interested in star-driven films and are offering only 40–50% of what they paid in 2024.
Instead, they are focusing more on small-budget films with fresh and unique content. As a result, many big Tamil hero films are struggling to sell their OTT rights, making it harder for producers to start new projects.
Producers face tough times as the OTT platforms bring new rules
Another major change is that platforms now demand official box office reports for the first 25 days of a film’s release. These reports must come from certified auditors or chartered accountants and not from social media or unofficial sources.
If the collections are lower than expected, the platforms can reduce the payment amount. Also, unlike before, the final payment is made only 60 days after the film’s OTT release. If any legal or political issues arise after streaming, the producer must bear the risk. Some big films with political themes are still waiting to sell their OTT rights.
Additionally, platforms are now offering deals for exclusive one-year streaming rights at much lower prices compared to earlier long-term deals. These new conditions may lead to a drop in star salaries, as streaming rights no longer hold the same value they once did.
