Amazon Prime leads race to acquire Hindi blockbusters

Zee 5 only Indian OTT firm to challenge global peers

Video-streaming service Amazon Prime is leading the race to buy digital rights for blockbuster Bollywood films, with its global peers Hotstar and Netflix trailing far behind. The only Indian over-the-top (OTT) service provider challenging the might of international players is Zee5.

According to Kotak Institutional Equities research, of the top 25 box office grosser released between June last year and this year, Amazon has bought 13. In terms of net box-office collections (NBOC), this is 54 per cent. Paying a hefty price, they have got digital rights for hits such as Salman Khan-starrers Tubelight (NBOC: ~1.2 billion) and Tiger Zinda Hai (NBOC: ~3.3 billion), as well as Golmaal Again (NBOC: ~2.5 billion) and Padmaavat (NBOC: ~2.8 billion).

Zee5, an Essel group firm, is a latecomer in the OTT space, but it has been able to buy digital rights of six films, with 9 per cent share of the NBOC of these films. The three global players have 90 per cent share of the NBOC.

The strategy Zee5 has adopted is different from these international competitors. They have bought rights of films that are not only successful at the box office but also critically acclaimed. Also, it has taken non-exclusive rights — cheaper than exclusive rights — for all except one film.

The films for which it has acquired rights are Bareilly Ki Barfi, Pad Man, Parmanu, and Toilet: Ek Prem Katha. They share the rights for the last with Netflix.

Bigger Indian firms Reliance Jio and Voot (part of Viacom18, in which Reliance has a majority stake) have not even opened their accounts. Viacom18, of course, produces its own movies. Eros International’s OTT platform, in which Reliance has a minority stake, could buy only one film.

What international players are doing For Netflix and Star TV India’s Hotstar, getting Hindi films is a way of increasing their Hindi entertainment content. Earlier, Netflix had concentrated on international content; now, it also produces Hindi serials and shows. But, it’s lagging Amazon and Hotstar. Of the films it acquired, it has exclusive rights for three — Mubarakan, Jab Harry Met Sejal, and Secret Superstar.

Hotstar has invested in sports, especially the digital rights for the Indian Premier League. Of the films it has picked, it shares digital rights for Judwa 2 and Baadshaho with Netflix, and has exclusive rights to Raazi and Raid.

Expert opinion

Experts are of the opinion that the competition for digital rights is likely to get more intense.

Jio, with no paucity of funds, is likely to play a more aggressive role, either with partners Eros and Balaji Telefilms, or on it own. If it launches fibre-to-home across 50 million households, it could get a larger consumer base it can monetise.

Amazon and Netflix have identified India as a big market. They could also invest heavily to acquire local content — though the returns might not come soon.

With Star India being acquired by Disney, the sector might become bigger. The question for Zee5 is whether it can continue to invest as much as it has over the past two years. It has spent ~25 billion already.