Research Project Report on

The impact of Over-the-top (OTT) media service industry on

the Movie Theatre industry and the effect of this disruption
on Consumer preferences and perception.

Under the Guidance of - Dr. Saswati Tripathi

Submitted By

Akshay Rajan

Roll No: 125KC

Section: C
MBA (IB) 2020-2022
Indian Institute of Foreign Trade,
Kolkata

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 Acknowledgement

I take this opportunity to express my deep gratitude to my esteemed institute, the Indian Institute of
Foreign Trade, which has helped me in having a keen understanding of International Business and in
particular the domain of General Management and International Marketing. The expertise of the
various professors in their respective domains has helped me immensely and equipped me with the
necessary skillsets and domain knowledge to excel in the professional world.

In view of that, I am deeply indebted to my project guide Professor Dr. Saswati Tripathi, for her timely
and patient guidance, mentoring, and constant encouragement throughout the course of this project.
Her valuable insights with regards to the project have helped me enrich my domain knowledge as well
as apply them in a structured manner.

I would also like to thank the IIFT administration for giving me access to various research papers and
journals. My batch mates have always been by my side, assisting me with the surveys and sharing their
valuable inputs for the project.

And last, my sincere thanks to all the respondents who helped me in filling the survey to complete the
research report.

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 CONTENTS

CHAPTER Page No.

1. INTRODUCTION 5
1.1 Introduction 5

1.2 Objective 5
1.3 Methodology 5
1.4 Expected Findings 5

2. ANALYSIS 6

3 RESULTS AND CONCLUSION 17

4 REFERENCES 18

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Introduction
Indian movie theatre industry is one of the largest of its kind in the world, which used to be the sole
outlet of more than 2000 films produced annually in India until quite recently. With a favorable
demographic dividend and a rise in young, middle class with disposable income, the movie theatre
industry reinvented itself with the introduction of multiplexes to consolidate its position as the
major go-to station for all movie-related needs.

However, the past few years have witnessed a significant change in this age-old this scenario. With
the increase in cheap internet availability and use, the ubiquity of smart phones, laptops and other
digital devices, the entertainment industry has also undergone a major flux like all other industries.
The OTT (Over the Top) media platforms which basically enable video to be delivered to any internet
enabled devices without third party interference have redefined and altered consumer goals and
needs completely when it comes to movie consumption. This is especially pertinent in the light of
the recent COVID-19 pandemic where the theatres where shut down for a large period of time and
people are reluctant to return to them because of health concerns.

This research project aims to evaluate the impact on customer perception, goals and habits due to
this disruption in the entertainment industry and what the future will be like for both the theatre
and OTT industry.

Objective
The objective of this project will be to study both the OTT and Movie theatre industry in depth. This
would be done for the purpose of examining the impact the rise of OTT has had on the movie-
viewing habits of the viewers and also on the market scenario of the theatre industry. Customer
perception regarding movie-theatres post COVID and post the advent of OTT will also be studied.
Journals, books, Industry reports, Interviews on the web, research papers, Official websites of
various OTTs and Multiplexes etc. Descriptive statistics methods such as frequency, mean, median,
mode, measures of dispersion such as range and measures of position such as percentile ranks are
used. This method is chosen based on the type of data anticipated during the research.

Methodology
The methodology would consist of primary data collection methods such as questionnaire and
interviews. This would help to define the variables, the sampling methodology to be used etc.
Interviews with the parties concerned can be carried out using phone, video call etc. Questionnaires
can be floated using Google forms and response can be collected. Secondary data will also be used
from sources such as

Expected Findings
1. Consumer behavior towards OTT w.r.t the time spent on different platforms.
2. The frequency with which people normally used to go to theatres.
3. Cost comparison between OTT and theatre.
4. Comparison between kinds of movies people prefer to watch on OTT and theatre.
5. Reasons consumers have for preferring OTT over theatre.
6. Reasons consumers have for preferring theatre over OTT.
7. Whether OTT is really a big disruption to theatres.
8. The change in theatre going preferences post-COVID.

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Analysis

Google forms were used to collect data online. There were 226 answers in all. Men and women
accounted for 65.1 percent and 34.9 percent, respectively. The bulk of respondents were
between the ages of 15 and 24, accounting for around 76.5 percent of all respondents. Students
make up the majority of responses, accounting for 74.2 percent of the total.

EXHIBIT 1
Time allocation towards Over the Top video streaming services

From the exhibit we can see that the majority of viewers who have been surveyed preferred to
allocate One to Two hours on an average everyday towards watching OTT content. This percentage is
closely followed by the people who spend Two to Three hours every day on these services.

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 EXHIBIT 2
Interest in theatre visits in terms of number of times visited

As we can see most of the respondents said they go to the theatre once a month. The second largest
group of moviegoers, go to the movies only occasionally. This is a rather interesting statistic as most
people in the young age group are reluctant to go to the theatres now as compared to 5 or 10 years
ago.

EXHIBIT 3
When do you choose to view OTT Platforms?
According to the data in the graph above, more than half of Indian audiences, almost two-thirds,
watch media between the hours of 6 p.m. and 12 a.m. And about One-third of users use such
platforms throughout the afternoon and early evening, which corresponds between 12 and 6 in Figure
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 EXHIBIT 4
In which show times do you generally prefer to watch movies?

As to be expected normally, most audiences like to watch movies from movie theatres during
the evening as it will be during this time that most people get back from work and then they still have
some time left before it gets too late and nearer to sleeping time. This group of people constitute
nearly two-thirds of the total theatre going crowd.

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 EXHIBIT 5
Average monthly amount used on video streaming platforms

According to the graph, around 40.5 percent of consumers use a free membership, implying that they
choose freemium video content or a group subscription for their needs. According to the responses
received, 22.1 percent of viewers spend between 100 and 200 rupees each month, with 19.6 percent
spending more than 200 rupees per month.

EXHIBIT 6
The average amount of money spent on a movie ticket
According to the data, majority of customers spend between 150 and 200 rupees on a movie ticket.
The next largest group of moviegoers, pay between 100 and 150 rupees on a movie ticket. People
rarely spend less than 100 rupees on movie tickets.

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 EXHIBIT 7
What people usually choose to watch on Over the Top Platforms

It has been observed that people generally choose to watch movies in these platforms closely followed
by Web series in different languages. Other video content people choose to catch up on include;
Regional TV serials, Reality shows, Documentaries, Live sport events, news, educational videos etc.

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 EXHIBIT 8
Kind of movies audiences regularly watch in movie theatres

Here we can see a major shift in the kind of movies enjoyed by a new generation of film- goers. There
is markedly a preference towards Offbeat, medium budget films targeted towards a more serious
audience as compared to Commercial, mega-budget star vehicles. This tilt in audience taste is
something the OTTs have also been viewing with interest and have been basing their business model
on.

EXHIBIT 9
What drives people towards watching a new movie in theatre

As demonstrated by the above graph, we can see that people are most influenced by the various
Reviews and Ratings related to movies which appear on Social Media, Newspapers, Websites etc.

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 EXHIBIT 10
What drives people towards watching a new movie in Video
streaming platforms

Quite different from what we have seen in the case of movie theatres, here we can see that people are
more interested in listening to word of mouth reviews when it comes to selecting what to see on OTTs.
Also unique to OTTs is suggestions recommended based on previous watch history of the viewer.

EXHIBIT 11
Reasons why Video streaming platforms are the current favorite
over movie theatres

As we can easily guess and also see, Convenience comes on top as one of the main reasons why OTT
platforms are the current favorite for fulfilling people’s entertainment needs. People like to carry their
entertainment on the go and like to avoid travel and encountering huge crowds because of COVID. The
vast array of quality international and national entertainment provided by these platforms are also
another reason why they are so popular.

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 EXHIBIT 12
Reasons why people still prefer to go to movie theatres

Despite the onslaught of Over the Top video streaming services people still prefer to go to the movie
theatres because of the better-quality infrastructure provided by theatres in the form of better
screens and sound. They are also attracted by the ambience and the experience provided by theatres.

EXHIBIT 13
Preference of ways to watch new movies

The responses to the above question go on to show that Video streaming platforms have

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fundamentally altered our viewing habits with reference to new releases. As we can see, most viewers
like to go only occasionally to theatres to catch new releases as they would much rather watch them
later in any of the video streaming platforms.

EXHIBIT 14
Even though people prefer to watch new movies in streaming services, they do not prefer to spend
extra money for it as evidenced by the above graph.

EXHIBIT 15

While it is observed that most people would like to go for a subscription based model as far as movie
theatres are concerned, it seems unlikely that many people will be able to make full use of it because
as we have seen in an above chart, only very few people go weekly to theatres to watch movies.

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 EXHIBIT 16

How long the audiences would take before resuming their movie-
theatre going
Audiences tend to be wary of returning immediately to the theatres even when they are reopened in
full capacity as shown by the above chart. This is possibly due to fears induced by COVID which is
difficult to change even if the theatre industry assures the audience of their safety. As we can see
more than three-fourth of the people are willing to go to the theatres only after a month after they
reopen fully.

EXHIBIT 17
As shown in the graph, 45.1 percent of viewers believe that OTT platforms are a threat to movie
theatres, with explanations as to why they think so given in Exhibit 18.

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 EXHIBIT 18
Viewers believe that streaming services are a disruption to movie theatres because of its ease and
mobility. The movie theatres must actively consider these factors in order to compete and overcome
the challenges mounted by the streaming services. Many other factors also contribute to the rise of
streaming. Namely; the increased penetration of smartphones, the digital revolution prompted by
lower data charges, advent of the pandemic etc.

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Results and Conclusion
When it comes to Streaming websites, the average user owns at least two of them and spends 1-2
hours each day on them. Early evening is the most popular viewing period, while English is the most
popular language. They mostly pursue a freemium model, where OTT platforms give free material
within a certain collection and there is an incentive to switch to a paying membership. The primary
advantage of Streaming sites is that customers have access to a lot of content. This new business
model has resulted in a shift in viewer viewing habits, as it leads to the paid subscription model.
Viewers who choose OTT platforms benefit from the ease and mobility that OTT platforms provide
over traditional movie theatres. OTT platforms have enabled users to access a range of content at their
leisure and at a reasonable cost.

With regards to movie theatres, both single screen as well as multiplexes are preferred by moviegoers.
The majority of moviegoers see a movie once a month, and the evening show is the most favored
show time period. Viewers are willing to pay between 150 and 200 rupees to see a film. Both English
and regional language content is encouraged. When it comes to extremely content-driven films, the
majority of moviegoers prefer to see them at the theatre. As a result, there has been a shift in
consumer viewing preferences, with commercial/big-star films formerly being preferred, but now
being supplanted by content-driven films. Reviews and ratings play an important role, and they have
become a deciding element for the new generation of moviegoers when it comes to seeing a film in a
theatre. Theatrical experience, screen size, sound quality, and ambience, according to moviegoers, are
essential characteristics that give them an advantage over watching on OTT platforms. Movie theatres
allow consumers to have a completely transformational experience while watching a film.

According to the data, individuals majorly prefer to watch new movies on OTT platforms and less
frequently in movie theatres. OTT platforms, according to nearly half of the respondents, constitute a
challenge to movie theatres. The most important reason for using an over-the-top video streaming
services is convenience. The availability of a diverse range of media is the second most important
factor. The third point is the availability of on-demand entertainment. The convenience of the service,
the safety reasons due to the pandemic, and the availability of international movies and Web series
are all reasons for the transition. Despite this, moviegoers prefer to watch a new film at a movie
theatre, which provides them with the visual experience, atmosphere, bigger screen, and great sound
that OTT platforms cannot match.

The reception of changing trends in the Indian media and entertainment business by the Indian
audiences are overall positive in nature. The Indian audience firmly believe that these new modes of
mass entertainment are revolutionizing the Indian media and entertainment sector, citing
convenience, efficiency, cost-effectiveness, safety and access to hitherto unreachable content as
reasons for the changes. According to this research paper, the future of Over the Top applications in
India is bright. The Indian public believes that these video streaming platforms have a bright future in
India, citing convenience and mobility, content variety, smartphone penetration, and cost
effectiveness as reasons for its widespread adoption. However, certain aspects of theatres, like as
screen size and sound quality, as well as the theatrical experience and atmosphere, cannot be
replicated by OTT platforms. So, to summarize it broadly, the Over the Top platforms have indeed
caused a disruption in the movie theatre industry. However, these two forms of media will mostly co-
exist and complement each other.

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References

1. Financial Times (2020). https://www.financialexpress.com/entertainment/bollywoods-big-

but-regional-cinema-is-also-raking-in-the-moolah/2020134/
2. Central Board of Film Certification (2018). http://filmfed.org/downloads/Language-wise-
Region-2018-19-26062019.pdf
3. OTT V THEATRE: ANTICIPATING TRENDS POST PANDEMIC. Retrieved from
https://archives.palarch.nl/index.php/jae/article/download/6804/6557
4. Analyzing the Influence of OTT Platforms over Movie Theatres in the Light of Post Pandemic
Scenario. Retrieved from http://www.jctjournal.com/gallery/22-july2021.pdf
5. Globalization propelled technology often ends up in its micro localization: Cinema viewing in
the time of OTT. Retrieved from
http://gmj.manipal.edu/issues/june2020/2%20Cinema%20viewing%20in%20the%20time%20o
f%20OTT.pdf
6. The Future of Movies: Will OTT Take Over Theatres? Retrieved from
https://www.mazsystems.com/en/blog/the-future-of-movies-will-ott-take-over-theatres
7. OTT Disruption in The Indian Media Sector. Retrieved from
https://2point2capital.com/blog/index.php/a2018/04/10/ott-disruption-in-the-indian-media-
sector/
8. Theatres to OTT: A shift in the wake of pandemic. Retrieved from
https://brandequity.economictimes.indiatimes.com/news/digital/theatres-to-ott-a-shift-in-
the-wake-of-pandemic/84666148
9. Are OTT platforms taking over theatrical experience? Retrieved from
https://brandequity.economictimes.indiatimes.com/news/media/are-ott-platforms-taking-
over-theatrical-experience/73887372
10. Covid-19 Lockdown, Entertainment and Paid OTT Video-Streaming Platforms: A Qualitative
Study of Opinions on Preferences, Theatre or Home. Retrieved from
https://www.researchgate.net/publication/348929029_Covid-
19_Lockdown_Entertainment_and_Paid_OTT_Video-
Streaming_Platforms_A_Qualitative_Study_of_Opinions_on_PreferencesTheatre_or_Home
11. Theatres to OTT: A shift in the wake of pandemic. Retrieved from
https://www.credable.in/business-insights/theatres-to-ott-a-shift-in-the-wake-of-pandemic/

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