Movie theatres should try and build a working relationship with streaming platforms

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Recreate viewing experiences will be crucial for movie theatre operators. They can do so by seeking a closer alliance with streaming providers, who are now creating content as well. Image Credit: Agency

The way we consume content has transformed significantly and is happening at multiple levels. We now consume content on more screens and the amount of content produced has also increased exponentially as new digital mediums make the economics of niche content viable.

Currently there are four dominant channels to consume paid content:

Movie theaters: This is the one of the oldest modes of content consumption. Consumers generally go there for the immersive experience and pay on a per-view basis.

Cable TV: This is largely streaming for sitcoms and live TV driven content. The most common model is the monthly subscription plan. Many of us would have this as they are typically bundled with telephone and internet connectivity.

Over-the-top (OTT) bundles: These are on-demand content providers – typically through an app on a smart device. The pricing model is generally monthly subscriptions that allow users to watch all of the content on the platform. Netflix, Amazon Prime and Shahid are some dominant players in this category.

Pay per-view (PPV) OTT: This mode is generally for live events and to watch content on a pay-as-you-go basis. Apple’ iTunes, GooglePlay, Zee5 and Mxplayer are some OTT players who have pay-per-view options.

Taking them inhouse

Recently, the biggest OTT platforms such as Netflix and Amazon have started producing movies for their own platform. In this model, they pay a bulk fee for an already produced movie or produce it themselves.

Over-the-top players are now the dominant entertainment channels with consumers spending almost 20 hours per week in Middle East. This is twice the time consumers spent on OTT platforms just two years ago – and many times more than spent in movie theatres. Such large-scale OTT usage presents an opportunity for the movie ecosystem to reinvent and provide more choices to consumers.

Link up on OTT

For example, new movies can be released on a per-view model on OTT platforms, thus providing more choices to movie studios and also to consumers. It can make economics of niche movies viable and can drive Arabic content production in the region.

Even movie theatres can reimagine themselves and create a pay-per-view revenue sharing channel that complements the existing physical movie business. That way they will be able to ride the OTT wave and make it more efficient for all stakeholders in the process.

Movie theatres will continue to be relevant for the immersive and social experience they provide. For this to really take off, privacy concerns will need to be addressed. But OTT does open up more possibilities for new movies.

We are already seeing in this in some form – it is only a matter of time for it become mainstream.

Sandeep Ganediwalla

The writer is regional Partner at RedSeer Consulting.