Change is the only Constant……

Change is the second name for life and one needs to endure and accept it as a rule rather than an exception. However nobody could have anticipated a change that we are currently seeing due to Covid 19 challenge. This is true for every facet of life as we have known and the Entertainment & Media is not different , in fact more accentuated than some of the other business sectors. Move towards Digital and video is the change and while this move was already apparent before this lockdown, the resultant pace has quickened manifold. The areas which have really started to pose existential questions is the ticketed live events, theatrical distribution of movies and the print business. Print business has been in decline the world over though India, because of regional languages and rural penetration, it was still showing a single digit growth which may now have premature decline should the lockdowns continue for sometime. Let’s go a little deeper into the discussion on the theatrical distribution of filmed content which is hot topic of discussion the world over including India and then look at the ticketed Live events.

Filmed content since time immemorial has been characterised by theatrical distribution of the same. There is certain mystique of larger than life characterisations which can best be enjoyed in a theatre setting with large curved 70mm screens, Dolby sound and 3D effects. It gives the actors larger than life personas making them stars enjoying a fan following either local or international not rivalled by any other video medium. Theatrical exhibition is unique combination of prime real estate, good content and in house dining which has been the defacto standard for long. The current pandemic has hit hard. With real perceived threat of being conduits of infection either through close contact, the air one breathes in air conditioned places, they were the first to be shut down and they still remain closed. Filmed entertainment suddenly found itself without an exhibition vehicle with some digital alternatives but not equal to the style, panache and the financial feasibility of a theatrical release. The lockdown and the pandemic will ease with time and a vaccine sometime in the future but will the theatrical business come back to its preeminent place in the chain, may not be a certainty, specially with fear still pervading the consumers mind. The ticketed live theatre and live events whether sports, music or other content are affected similarly as the theatrical films business. Risk of infection, fear surrounding the same and the fact that the facilities are closed is likely to change this business, the question remains for how long and whether there are any alternatives.

If one were to look at the precedence,the current disruption and the crystal ball, the following facts become apparent –

1. The theatrical business is still the vehicle that defines enjoyment of content whether it is a film or a music concert or a sporting event. The core is watching the content live, with people as well as friends which may not be replicable with any other mode at present. The experience of watching a movie made on a grand scale needs to be in the theatres equipped to give you that experience with real life like effects and sound systems. Pandemic has put a temperory stop to that experience but unless the same is incurable for a long time, the same will be back bigger and better as soon as the things stabilise. The question should be how does one survive till the pandemic goes away and not whether it will be there in the future or not. Costs of real estate, the cost of the workforce should be the topics to worry on for the theatre owners while the money riding on the content made for this medium and its currency should be content owners worry.

2. While the theatrical release is life blood for a movie content and other live content, the cost of putting up new theatres/screens with access had become a drain even before the pandemic. India has been stuck with around 10000 screens for a while now with new screens not being added in adequate numbers. Digital distribution of content, though not the epitome of grandness has made significant strides in making that content accessible in every home and on every screen big or small. It has been an additional revenue generating platform though not the primary one. With its ever increasing technological features, artificial intelligence and global coverage it slowly has gained precedence. Netflix , is today a highly valued digital OTT platform which is dominating attention of all the large players having bested the capabilies of the traditional TV platforms both as a distributor and producer of content across geographies. Regardless of what our feelings are about the theatrical distribution,digital distribution of movies is an event whose time has come. It may not be apparent for the live theatre or the events but they may not be far behind. It’s possible that these systems will exist side by side but it is starting to happen and will get mainstream with time.

3. Two other changes again which have been on the anvil will now accelerate. The first change will be the merging of the two distribution systems with both theatres and the digital channels releasing content simultaneously or with reduced intervals. It’s already happening in the US with one of the large theatre chain AMC having reached agreement with the digital side for reducing the interval to 17 days from 70. The second change is the rapid rise of tech behemoths first as providers of technology and now slowly as producers and distributors of content. The real change is the strength of their balance sheets and the inexhaustible ability to spend on content. They are the new entertainment moguls and with this disruption, there is all likelihood that it will happen much sooner than expected.

4. While the digital systems still are not completely transparent on the profitability, probably because profitability is not a criteria but domination of market and subscribers is. I believe that here too change will happen and soon. We are already seeing the pay per view models emerging with one having been launched in India by Shemaroo. There will be more

Change has been the only constant and it’s time to realise that the world has changed. Time to change our thinking and actions too to welcome the new world.


Published by eyeonmediablog

Professional Chartered Accountant and presently the founder and chairman of Sapphire Professional Services Pvt Ltd - a boutique advisory firm in M&A,Strategy and Structuring ( ). Previously a senior partner with PwC and leader of the Entertainment & Media industry in India for 7 years.

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