Is it the end of an era for the theatre business due to the emergence of OTT platforms?

 

For decades, the theatre was the primary mode of viewing newly released movies. A new film would release and subsequently, individuals would plan outings with their families, friends or they could just go at it alone and spend 2 hours or so enjoying the majesty that is cinema. We all know this. We've all been there. We know the feeling. Staring at a huge screen in the dark with dozens of strangers and a few shrieking hooligans.

Now, we have another way of viewing newly released content. It's aimed towards delivering convenience and comfort instead of a grand experience of auditory and visual magnificence. We have apps on our phones, tablets, and other modern digital devices with a screen allowing us to view movies and television shows as an Over-The-Top (OTT) service. 

The existence of such services is nothing new of course. Hundreds of millions have embraced this new age of almost seamless content streaming and film industries all over the world have done so as well. However, this brings up an important question - what is the relevance of the local theatre if a newly released film can be viewed within the comfort and convenience of one's own home?

This question proved even more relevant with the advent of the COVID-19 crisis. People were stuck at home for months, and theatres were closed to all. The production of most films was stalled if not stopped temporarily. It seemed as though the likes of Netflix, Amazon Prime and Disney+ had all but won the battle. 

However, there was one particular film released towards the tail end of 2021. The third entry to the Marvel Cinematic Universe's Spiderman: No Way Home proved to all that the theatre remains relevant even now. The film grossed well over a billion USD and I can personally say that while I was in the theatre watching the movie with my father, I was keen to notice the people, feel their energy and I realized that none of the magnificence or the grandeur had been lost due to the COVID-19 crisis. 

Therefore, a new question arises - one seeking to understand the degree of relevance of the theatre business now that we know that for the release of certain films, it can be truly successful. It is quite difficult to outright the earnings and revenue figures of the OTT streaming companies with the box office earnings of any particular country. Most of these companies do not disclose viewership numbers and even if they did - an accurate earnings-per-view model is not yet known to us. It should, however, be noted that Netflix has recently partnered with the TV ratings agency Broadcasters Audience Research Board (BARB) to disclose it's viewership metrics but the numbers shall only reflect the viewership of people living in the United Kingdom.

Hence, we cannot speak to the actual earnings of OTT platforms but it is safe to assume that they are doing quite well owing to the fact that OTT content is being created and released at an increasingly rapid pace. So, we must compare the global box office earnings of recent years to try and figure out where the theatre business might be heading. In 2021, the global box office ended the year with earnings valued at $21.4 billion, with an increase of 78% over the earnings of 2020. It is understandable considering that the 2020 earnings would be highly impacted due to the pandemic and the world opened up once again in 2021. 

However, 2019 was an extremely good year for the worldwide box office when $42.5 billion was the final figure at the end of the year. The theatre business was doing exceptionally well until 2019 and if anyone were to wonder if streaming services could pose a threat the answer would almost definitely have been a resounding "No". However, the pandemic appears to have put a damper on the party and it allowed the OTT companies to really innovate and amaze people by serving as their primary mode of entertainment and relaxation during a time of great human struggle. 

Hence, it is safe to say that the business has definitely recovered to some extent from the troubling era of the pandemic but it is still nowhere near what it used to be only 3 years prior from now. 

I believe that people are not opposed to viewing a new film in the theatre as long as the film is required to be viewed in the theatre. As of December 18, 2022, the long-awaited sequel to 2009's Avatar is out right now and being viewed all over the globe. I believe this is one of those films which must be viewed in the theatre purely because of the impact that it's predecessor had on the global box office. The overall earnings are yet to be released for the first week but I would be truly surprised if the numbers were anything short of ridiculous.