The government has been urged by the Cellular Operators Association of India (COAI) to establish a formal regulatory framework for over-the-top (OTT) communication platforms like Signal, Telegram, and WhatsApp. COAI claimed in a statement that these platforms are the “weakest link” in the nation’s communication security, providing message and voice services akin to those of telcos but functioning outside of the regulatory framework.
COAI emphasised the significance of controlling all communication channels to improve national security, citing a recent event in Pahalgam where satellite phone signals assisted in the capture of three terrorists.
OTT Apps Like WhatsApp & Signal Bypassing Compliance Norms
Since OTT players currently evade compliance obligations like lawful interception, subscriber verification, anti-spam protocols, and domestic infrastructure investment rules that telcos must follow, the industry body, which represents private telcos Reliance Jio, Bharti Airtel, and Vodafone Idea, said the regulatory gap presents difficulties for law enforcement.
Unified License System Suggested for OTT Communication Players
The DoT’s security directives under this act require authorised interception capabilities, local infrastructure, and the retention of domestic traffic—all crucial components for safeguarding user privacy for satellite communication services while guaranteeing national security. COAI suggested creating a specific OTT authorisation under the Unified License framework in order to close the gap.
Telecom Act 2023: Regulatory Gap Leaves Telcos at a Disadvantage
A specific OTT authorisation under the Unified License, according to COAI Director General SP Kochhar, will guarantee fairness, improve security, balance innovation with the nation’s security requirements, and establish uniformity across platforms. In order to alleviate the existing regulatory disparity, it was also suggested that OTT regulations be brought into compliance with the Indian Telecommunications Act, 2023.
OTT platforms that operate via the internet are not constrained by the infrastructure and interception constraints that apply to traditional telecom services. The Telecommunications Act 2023’s final text does not specifically place OTT platforms under licensing, despite telecom players’ calls for a “same service, same rules” approach.
OTT providers and tech groups contend that the IT Act 2000 already regulates them and that further regulation will impede privacy rights and innovation.
TRAI vs COAI: Spectrum Pricing Dispute Over Satcom Market
There is also a dispute between TRAI and COAI on the suggested satellite spectrum. Many satcom companies, including Starlink, Amazon’s Project Kuiper, and Airtel’s Eutelsat, are preparing to enter the Indian market.
However, Indian telcos are concerned about their entry into the global satcom market, particularly with regard to regulatory recommendations on satellite spectrum. Telcos criticised TRAI’s spectrum pricing strategy as “unfairly low” and predicated on “flawed assumptions” after the agency had suggested that satellite spectrum be priced at 4% of adjusted gross revenue (AGR).
Additionally, the COAI requested a second review. However, TRAI allegedly denied COAI’s request to reconsider its suggestions for satcom spectrum, claiming that the consultation process was exhaustive and open.
The Indian film industry has historically stood as a dynamic and captivating pillar of popular culture. It has delighted audiences worldwide with its extravagant productions, compelling narratives, and melodious soundtracks. However, in recent times, this industry has experienced a notable transformation fueled by the rapid ascent of over-the-top (OTT) platforms.
These digital streaming services, including but not limited to Netflix, Amazon Prime Video, Disney+ Hotstar, and SonyLIV, have brought about a revolution in how audiences engage with entertainment. They provide an extensive array of films, television series, and exclusive original content easily accessible at the viewer’s convenience. This shift in viewing preferences has unquestionably left an impact on the conventional movie theatre business, compelling it to undergo strategic adjustments to navigate the ever-changing landscape of the entertainment industry.
OTT platforms have garnered immense popularity in India, particularly during the COVID-19 pandemic when lockdowns restricted movement and encouraged home entertainment. According to a 2023 KPMG report, India’s OTT market is expected to reach a staggering ₹23,663 crore by 2026, driven by increasing internet penetration, affordable data plans, and a growing preference for personalized and on-demand viewing experiences. The convenience of watching movies and shows at home, coupled with the wide variety of content and affordable subscription fees, has made OTT platforms an attractive alternative to traditional movie theaters.
The rise of OTT platforms has brought about a revolutionary transformation in the global film industry, disrupting conventional distribution models and reshaping the entire process of film production, distribution, and consumption. Ritesh Sidwani, the co-founder of Excel Entertainment, highlighted the organic evolution of content creation that led to the emergence of OTT platforms in India. He noted that certain narratives were better suited for a digital format, exceeding the constraints of traditional cinema durations.
The lasting impact of the pandemic is evident in the sustained popularity of OTT platforms, diverting both time and money from consumers who, a decade ago, predominantly relied on cinemas for their movie-watching experience.
With smartphone subscriptions projected to exceed one billion by 2025, driven by increased internet penetration and affordable mobile data, there is a significant transformation in how content is consumed. Ritesh Sidwani further attributed the acceleration of OTT platforms to the shift in people’s preferences during weekend getaways, coinciding with traditional movie releases.
From the consumer’s perspective, the cost factor plays a pivotal role. In India, where movie ticket prices vary based on factors such as the film, showtime, and seat selection, OTT platforms offer a more economical alternative. With over 40 OTT platforms in India, boasting average fees ranging from Rs. 129 per month to Rs. 999 per year, the competition among global and local players has intensified, expanding the content library and providing consumers with a diverse range of options.
Kamal Gianchandani, CEO of PVR Pictures Ltd., explained the cinema industry’s stance on ticket prices, emphasizing the commitment to quality and the adoption of surge pricing. Despite the competitive pricing of OTT platforms, the cinema industry aims to enhance the overall cinema-going experience by reducing indirect costs.
Additionally, OTT platforms offer advantages such as convenience, on-demand services, a diverse content library, and the inclusion of genres like web series and sports that are not typically available in movie theaters. The continuous development of technology, coupled with the affordability of 4K and 8K televisions, contributes to an improved home viewing experience through OTT platforms.
The ease of access, flexibility, and shorter waiting periods for content release further incentivize consumers to opt for OTT platforms. Although the post-pandemic shift has extended the cinema-to-OTT release window to eight weeks, this change is anticipated to create a sense of urgency among viewers, potentially boosting box-office numbers.
From a producer’s standpoint, OTT platforms offer a broader reach, with platforms like Netflix investing significantly in original Indian content. This investment has provided opportunities for new talent and diverse storytelling, as seen in the international success of series like “Sacred Games” and “Delhi Crime.”
Karan Johar, a renowned filmmaker acknowledged that OTT platforms have democratized storytelling and provided a platform for diverse voices to be heard.
The demand for original content has fostered collaborations between OTT platforms and filmmakers, leading to high-quality productions catering to both domestic and global audiences.
The creative landscape has expanded, resulting in a surge of talent and increased production crew sizes. Ritesh Sidwani acknowledged the incredible talent emerging from the digital space, emphasizing the inclusivity of the once-exclusive Indian film industry.
Producers benefit from the flexibility of content censorship norms on OTT platforms, allowing the streaming of adult content that may not be suitable for traditional movie theaters. This flexibility provides a significant advantage over cinemas, with examples like the film “Gehraiyaan” passing with an A certificate on Amazon Prime Video in 2022, while a film like “Gangubai Kathiawadi” received a UA certificate despite having fewer intimate scenes and simpler themes.
The decision to release a film in theatres involves additional costs, including marketing, non-production, and print & advertising costs, amounting to 25% of a film’s budget. The unpredictability of box office collections, coupled with indefinite release dates and erratic consumer behavior, has compelled production houses to recognize OTT platforms as a growing and relevant medium for content release.
Comparison Between Pre-covid and Post-covid Statistics
The global pandemic, which brought the world to a standstill, significantly impacted the revenue earnings of the Indian Film Industry. Despite producing over 200 Hindi language movies annually, the industry witnessed a staggering 89.5% decrease in gross revenues, plummeting from 5611.83 Cr in 2019 to 586.4011 Cr in 2021.
Contrastingly, the Indian Over-The-Top (OTT) market, valued at $576 million in 2019, is projected to surge to $3.22 billion by 2025, as indicated by the Price Waterhouse Coopers Global Entertainment and Media Outlook Report 2019-23.
Major production houses like Dharma Productions and Yash Raj Films (YRF) were compelled to halt production activities in 2020 due to the pandemic, with movie theatres closing indefinitely. This shift prompted around 24 million moviegoers to transition from cinemas to online streaming platforms, leading to a considerable loss for the Indian film industry. Some producers even chose to release their films on OTT channels without waiting for a theatrical release.
According to Price Waterhouse Coopers, the streaming market is expected to witness a 31% growth between 2019 and 2024, generating revenues of $2.7 billion, while cinema revenues are projected to decrease by 2.6%. Despite intensifying competition within the OTT space, the overall outlook for OTT platforms remains optimistic.
Even with leading theatre chains like PVR and INOX adopting the latest technologies and innovations, footfall has declined since COVID-19, reaching only about 50–60% of pre-COVID levels at best. This decline is not unique to India, as global theatres are also experiencing a sharp drop in regular patronage. PVR and Inox recently merged to create economies of scale and control 43% of the multiplex screens in India, adapting to the competitive environment dominated by OTT platforms.
Telecom companies have entered the OTT landscape, introducing their platforms and streaming apps to align with the growing trend. The expansion of 4G and 5G, coupled with increased smartphone usage, broadband accessibility, improved payment infrastructure, and a dynamic local content ecosystem, contributes to the surge in digital content viewership.
A Juniper Research report predicts a 65% increase in video-on-demand subscription services from 2020 to 2025. The advent of 5G is expected to bring cloud computing infrastructures closer to end-users, enabling real-time processing and minimal latency. Apple’s recent announcement of ‘Vision Pro,’ offering quality higher than 4K on demand, further supports OTT platforms’ expansion, posing a challenge to multiplexes.
Impact on Content Consumption
The transformation in infrastructure and the growing popularity of OTT platforms have reshaped content consumption in India. The industry has come to realize that the traditional cinematic formula, including musical numbers, star-studded casts, and picturesque locations, no longer guarantees a blockbuster. Unlike in the past, there is no clear trend on the types of movies that succeed at the box office, introducing uncertainty into the industry.
For instance, in early 2022, “Bhool Bhulaiyaa 2” achieved a worldwide gross collection of Rs. 266.88 crores and was declared a hit. Conversely, “Phone Bhoot,” a horror comedy with a bigger star cast, including Katrina Kaif, released in November 2022, only garnered a worldwide gross of Rs. 18.73 crores.
Filmmakers now categorize small-budget films or those with a strong social message as suitable for OTT release. Movies offering a ‘cinematic experience,’ such as Sanjay Leela Bhansali’s “Gangubai Kathiawadi” or Ayan Mukherji’s “Brahmastra,” are released in theatres, as the same viewing experience cannot be replicated at home.
Senior executives note a shift where character-driven stories find a place on OTT, while event-based stories are reserved for cinemas. Producers, like those at Excel and YRF, decide on OTT or cinema release during pre-production, considering factors such as script, budget, and directorial vision.
India’s traditional daily soaps, which once dominated linear television, are experiencing a decline. The introduction of short episodes ‘web series’ influenced by Western culture has contributed to this shift. As people embrace curated series, the era of endless daily soaps appears to be fading.
This evolving landscape emphasizes the importance of content, compelling producers to differentiate between cinema, TV, and broadband. However, industry experts suggest that government initiatives like Bhaaratplex (subsidizing cinemas) could positively impact box office collections, particularly in two and three-tier towns. The need to build infrastructure for better cinematic experiences is highlighted, with comparisons drawn to China’s larger screen presence.
Forecast of Video Over-The-Top (OTT) Market Size in India From Financial Year 2021 to 2030
Adapting to Change: The Resilience of Cinema in the Digital Era
It’s crucial to emphasize that the cinema industry is far from dead. Despite a noticeable decline in traditional movie theatre attendance, theatres are demonstrating resilience by embracing innovation and diversification.
Siddharth Roy Kapur, President of the Producers Guild of India says, “The rise of OTT is not a threat to cinema but an opportunity to expand the audience for films.”
Embracing Immersive Experiences
Recognizing the need to adapt, many theatres are enhancing the viewer experience by incorporating immersive technologies such as IMAX and 3D screenings. These technologies aim to provide audiences with an unparalleled cinematic journey that goes beyond the capabilities of home entertainment systems. The goal is to transform a visit to the cinema into a multisensory adventure, enticing viewers back to the big screen.
Diversifying Content
To regain their appeal, cinemas are expanding their content beyond mainstream Bollywood blockbusters. The inclusion of regional films, independent productions, live events, and even sports broadcasts demonstrates a commitment to catering to a diverse audience. This diversification not only broadens the cinematic offerings but also fosters a sense of inclusivity for a wide spectrum of movie enthusiasts.
Strategic Partnerships with OTT Platforms
Acknowledging the digital revolution, many theatres are forming strategic alliances with OTT platforms rather than considering them adversaries. Collaborations, such as PVR Cinemas partnering with Netflix to screen select films before their OTT release, exemplify the synergies between the traditional cinematic experience and the digital realm. These partnerships expand content choices for viewers and attract a new demographic, fostering a symbiotic relationship.
Harmonious Coexistence
The future of entertainment in India seems to be a harmonious coexistence between movie theaters and OTT platforms. While cinemas offer the communal experience of watching on the big screen, OTT platforms cater to the convenience and personalization desired by modern audiences. As technology advances and viewing habits evolve, both industries are poised to adapt and innovate, ensuring they remain relevant to the dynamic demands of entertainment enthusiasts.
Shekhar Kapur, Veteran Director held “Cinema and OTT are not competitors but complementary platforms that offer different viewing experiences.”
The cinema industry’s ability to adapt, innovate, and collaborate paints a promising picture of its enduring relevance in the dynamic entertainment landscape. As audience preferences continue to evolve, cinemas are poised to remain a cherished destination for those seeking a shared, immersive experience.
Today, “Netflix and chill” is not just a phrase, but a synonym for our weekend plans.
It’s a cultural shift that has taken place between Gen X and Gen Z. Think about your favorite shows and movies— they’re just a click away.
All thanks to Netflix and the mastermind behind this entertainment revolution – Reed Hastings. Reed Hastings isn’t just a name; he’s one of the reasons our screen time is a whole lot more exciting.
He didn’t just create a streaming service; he created a whole new way for us to enjoy movies and shows whenever we wanted.
His ability to predict what we want to watch has made him a big deal in Silicon Valley, and as we get lost in the endless options on Netflix, we can’t help but appreciate the guy who changed the way we experience stories.
Let’s explore the world of this mastermind further in this article.
Reed Hastings – Biography
Name
Wilmot Reed Hastings, Jr.
Birthplace
Boston, Massachusetts
Born
October 8, 1960
Nationality
American
Education
Bachelor of Arts/Science, Bowdoin College and Master of Science, Stanford University
Born on October 8, 1960, in Boston, Massachusetts, Reed Hastings emerged as a key player in the tech and entertainment industry. Growing up in a middle-class family, his early life was marked by curiosity and a love for learning.
Hastings attended Bowdoin College, where he delved into mathematics, an interest that would weave its way into his innovative approach to the streaming landscape.
After earning his bachelor’s degree, Reed Hastings continued his academic journey at Stanford University, where he earned a master’s degree in computer science.
This educational background laid the foundation for his future ventures, combining a strong technical understanding with a creative vision that would redefine the way we engage with entertainment.
Reed Hastings – Career
Reed Hastings’ career is a narrative of great innovation. After completing his education, Hastings embarked on his professional journey, co-founding Pure Software in 1991, a company specializing in troubleshooting tools.
Although Pure Software faced challenges, Hastings’ ability to adapt and learn from setbacks laid the groundwork for his future endeavors. Rational Software eventually took over the company in 1997 for $750 million.
Post this, Hastings’ career took a significant turn when he founded Netflix alongside Marc Randolph.
Initially conceived as a DVD-by-mail service, Netflix disrupted the traditional video rental industry. In 1998, they launched Netflix.com, the first DVD rental and sales site. Some new innovations were brought into it like personalized movie recommendations based on members’ ratings on past titles.
Hastings’ insight into changing consumer behavior and his willingness to embrace emerging technologies led to the introduction of the streaming model of Netflix in 2007.
This shift catapulted Netflix into a global powerhouse, fundamentally altering how audiences consume entertainment. Today, Reed Hastings’ career stands as a testament to his strategic foresight, adaptability, and dedication to redefining the boundaries of the digital media landscape.
Hastings lives in Santa Cruz, California. He is married to Patricia Ann Quillin and is a father to two children. In an interview, Hastings admitted, “Unfortunately, and weirdly, I have almost no hobbies.” He is more of a person who is completely passionate and thus occupied with his work.
Reed Hastings – Company Name
Netflix, Reed’s masterpiece, has almost become a part and parcel of the lives of millions around the world. By 2022, the membership of Netflix crossed the 200 million milestone.
In the next year, Netflix rolled out spatial audio to bring the cinematic experience to any device and added Category Hubs for TV. In the latest, Netflix won many Academy awards, for its creations like “The Elephant Whisperers”.
In this manner, Netflix has always come up with new ways to engage the audience with maximum entertainment.
Reed Hastings – Investments
Hastings has made the following investments:
Announced Date
Organization Name
Lead Investor
Funding Round
Money Raised
September 7, 2023
Ello
–
Series A
$15 million
December 17, 2013
DreamBox Learning
Yes
Series A
$14.5 million
December 7, 2011
DreamBox Learning
Yes
Series A
$11 million
October 1, 1997
Netflix
Yes
Series A
$2 million
Reed Hastings – Philanthropy
In 2012, Hastings and Quillin signed The Giving Pledge, the pact founded by Bill Gates and Warren Buffett mandating that billionaire signatories give away most of their fortunes
In 2020 Hastings and his wife donated $120 million to fund scholarships at two historically Black Colleges and the United Negro College Fund
Reeds built a $20 million training camp for teachers in Colorado
To quote Hastings & Quillin, about their philanthropy,
“It’s an honor to be able to try to help our community, our country, and our planet through our philanthropy.”
The future of Netflix: Will subscriber growth continue?
Reed hastings – Awards and Recognitions
He was placed at number #5 in the list of America’s most innovative leaders in 2019
He has been given the Television Academy’s Charles F. Jenkins Lifetime Achievement Award in 2021
He has been enlisted in Forbes 400 Richest People In America 2023
He has also been enlisted in Forbes World’s Billionaires List 2023
He was listed under The World’s Most Powerful People in 2018
UCLA Anderson honored Reed Hastings with its 2018 John Wooden Global Leadership Award at Hollywood’s Raleigh Studios
The Henry Crown Leadership Award was presented to Reed Hastings in 2014
Reed Hastings – Latest
After 25 years, by the beginning of 2023, Reed stepped down as the CEO of Netflix. Ted Sarandos and Greg Peters have taken over as co-CEOs, while Reed continues as the Executive Chairman.
A few months later, he became the co-owner of Powder Mountain, a ski resort in Utah.
Reed Hastings – Interesting Fact
Before founding Netflix, Hastings spent one year teaching in Swaziland with the Peace Corps.
Reed Hastings – Quotes
“Being an entrepreneur is about patience and persistence, not the quick buck, and everything great is hard and takes a long time.”
“I think if you can make a contribution to solving one significant problem in the world, that’s amazing.”
“Incredible people don’t want to be micromanaged. We manage through setting the context and letting people run.”
Netflix is a paid online streaming platform that enables its subscribers to enjoy a wide range of television shows and movies on internet-connected devices.
Who are the founders of Netflix?
Reed Hastings and Marc Randolph are the co-founders of Netflix.
Who are the CEOs of Netflix?
Ted Sarandos and Greg Peters are the co-CEOs of Netflix.
What are the subscription plans offered by Netflix?
Netflix offers three subscription plans: Basic, Standard, and Premium.
