OTT Vs Theater: Which Is The Dominant Movie Watching Platform Today?

Rishabh Jain Aug 8th, 2022


The coronavirus induced lockdowns and restrictions have significantly altered the culture of movie consumption in the past two years. More people continue to stay home and the most sought after place where they get their daily diet of entertainment is from over-the-top video streaming platforms. This shift has prompted more studios and media distributors to develop their own direct-to-consumer streaming services. 

To better understand the multi-faceted strategic choices that particularly movie studios make, one has to keep in mind the various factors that govern those choices. A look at the film industry’s shrinking theatrical window,uthe divide between theatrical and streaming intellectual property and the value of streaming subscriptions versus box office totals give us a fair idea at how a movie studio makes its decision. Studios are always concerned about box office sales and it is understandable that they would feel the pinch when it came to distancing themselves from theatrical releases in favour of digital streaming. In 2019, theatrical releases accounted for nearly 46% of total global revenue (Source) Therefore this shifting landscape has put studios in a difficult spot. They potentially can reach more people through streaming platforms but at the same time they may not get that hulk of a revenue share that a theatrical release guaranteed. 

Having no choice but to release movies online has made the Premium Video on Demand (PVoD) subscription option the most viable way for studios to reach movie fans. A Deloitte study in 2020 showed that 22% of consumers paid to rent or watch a PVoD movie and 90% of those said they would do so again (Source) But monetization of streaming can be a challenge for studios specially when they don’t have control over their own distribution channels. In case of major studios who also own video streaming services, offering subscribers exclusive access to PVoD when a movie is released in theaters could be the kind of perk that prevents customer attrition. 

But the way over-the-top has taken the market by storm in the last few years, it would seem appropriate to say that they have the larger share of the pie when it comes to movie watching experiences. But the fact of the matter is, one still cannot rule out the movie theater. If you see from a purely psychological point of view, with theaters shut for so long, that gap period by itself of not having access to something that was so easy to go to, has made people miss the experience of watching a movie in a cinema hall. Besides, as humans, we constantly have involuntary cravings for some new experience on a regular basis. And if one is of the view that the video on-demand market has become quite saturated, then that longing for ‘something new’ would by itself become the theater watching experience which people have not really enjoyed for two years altogether. So, in essence, the boat can rock both ways. It is just a matter of time to see how the movie industry and its consumers adapt to life in a post-pandemic world. 

In conclusion, as goes the old saying ‘there is light at the end of every tunnel’, the setbacks faced due to the pandemic induced lockdowns surely offer opportunities for aging business models to reinvent and meet modern day challenges of a digital world. Every player in this field, namely streaming video platforms, movie studios and theaters need to navigate these shifts with patience in order to succeed. 

If you are a content producer looking to transform your content into a thriving digital product, then connect with Enveu right away! 

Rishabh Jain - Director, Product Development, Enveu
Rishabh Jain is one of the co-founders and heads the Product Development at Enveu. A tech evangelist and deep tech advocate, he has been working in the Technology space, being part of many Big Data and IoT initiatives for over 10 years.

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