OTT players are splurging on content. What’s their game?

The platforms are driving themselves into a corner, and they may need a smarter strategy soon  

Published 2 years ago on Jan 01, 2021 12 minutes Read

Laxmii was jinxed from the start. This Akshay Kumar-starrer was one of the most anticipated movies in 2020 and it was scheduled to hit the theatres in May. But, the pandemic descended and the movie release kept getting postponed. Finally, it was scheduled to be screened in early November for Diwali, on streaming platforms. Just when everyone thought the worst was over, several Hindu groups raised objections to the movie’s original title Laxmmi Bomb. So, the makers changed the title to Laxmii.

Meanwhile, Fox Star had paid a hefty price for the movie rights, including digital, satellite and music, at Rs.1.6 billion. When the theatrical release became impossible, they had to sell it to Hotstar for Rs.1.2 billion. It was a marked down price, even then, Laxmmi Bomb was the most expensive digital or OTT (over the top) deal ever. Hotstar seemed confident that they would make good the investment since the movie was a remake of the superhit Tamil movie Kanchana and had a popular star leading it. Their promotions projected confidence. Sadly, the movie turned out to be one of the biggest disasters of 2020. A poor storyline was panned by critics and the wicked joke in the industry was that Laxmii had truly bombed.

This is a perfect illustration of the gamble that OTT players are taking, as they push ahead with their content acquisition spree. This shot-in-the-dark, it seems, is every big player’s strategy. All of them seem to be splurging on content, and throwing it at the audience to see what sticks. Hotstar has invested over Rs.35 billion to date, while Amazon Prime Video has spent upwards of Rs.20 billion on original content since its India entry in 2016. While there is no word on how much more Hotstar will spend in the immediate future, reports say that Amazon Prime and Netflix will together burn as much as Rs.75 billion over the next two to three years.