PVR Cinemas, INOX Respond to Jio’s ‘First-Day-First-Show’ Initiative

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Less than a day since Reliance Jio’s “First-Day-First-Show” announcement, which promises day-and-date movie releases for premium broadband customers starting mid-2020, India’s cinema chains — including the likes of PVR Cinemas, and INOX — have responded to Jio’s strategy that represents a threat to their business model. In their statements, PVR and INOX emphasised the value addition and growth potential of theatres for the film industry, the shared experience it offers and how it’s different from watching at home, pointed out the eight-week exclusive theatrical window that’s contractually in place, and noted how the traditional model has mutually benefited both the context makers and the distributors. Essentially, it’s the kind of statement you’d expect from entrenched players that have a lot to lose if this comes to pass.

INOX was more assertive in its statement, as it concluded that film producers would have to “choose between theatrical exhibition or release on any other platform, since release on both simultaneously would breach the mutually agreed exclusive theatrical window”: the aforementioned eight-week period. PVR stressed more on the economics of the sector, noting that cinemas accounted for 75 percent of the Rs. 174.5 billion (about $2.453 billion) industry revenue in 2018. But in noting the growth potential given the low density of screens in India, PVR ended up arguing for its soon-to-be competitor. Jio will no doubt promise film producers that they have an untapped market — which doesn’t have access to cinemas — they can reach through its platform.

In its statement, PVR also brought up the fact such day-and-date movie release initiatives have already been tried out in more mature markets such as the US and Europe, name-checking Netflix, and that it hasn’t affected cinemas. But the statement overlooked the fact that American and European cinema chains have effectively barred Netflix from pursuing day-and-date releases, with countries such as France having laws that prevent films from appearing on streaming services until 36 months after release in theatres. India doesn’t have that problem thankfully, with movies regularly appearing on the biggest streaming services — Netflix and Amazon Prime Video — right after the theatrical window closes, which is two months for Bollywood, and can be as short as a month for south Indian films.

Speaking to Gadgets 360 in June, Prime Video’s India content chief Vijay Subramaniam said film producers were happy to bring films after such a short period because it helped dissuade piracy, for one. (That will be another argument that Jio will likely make as it prepares for “First-Day-First-Show”.) He also claimed that films in south India have continued to run in cinemas for 75-100 days, despite arriving on Prime Video after a month, pointing out the love people have for the theatrical experience. But if one were to solely measure audiences’ views on the matter from the comments on PVR Pictures CEO Kamal Gianchandani’s tweet, you’d think that Indians don’t care that much for the theatrical experience, with most complaining about in-cinema advertisements, and the pricing of food and beverages.

Reliance Jio had no comment to the response from cinemas chains, and it didn’t share any additional details on the “First-Day-First-Show” initiative, noting it was too early for anything. It will be interesting to see how it shapes up, given there’s still nearly a year to launch. But given the early pushback from PVR and INOX, and the inevitable concerns for filmmakers, producers, and distributors, it’s highly unlikely that Jio will be able to offer all movies under its day-and-date release strategy. Fortunately for Reliance, it has the benefit of also being a distributor itself in Jio Studios, which has been involved in the likes of Kartik Aaryan, Kriti Sanon-starrer Luka Chuppi, and Imtiaz Ali’s next directorial venture. It’s a safe bet that Jio Studios films at least will be part of its controversial “First-Day-First-Show” programme.

Here are the full statements from PVR Cinemas and INOX:

“PVR Ltd. (PVR) has learnt from various media reports that one of India’s telecom enterprise, or its premium fiber customers, will make movies available at home the same day these movies are released in theatres. As on date, the publicly available information regarding the proposed service is limited, however, given the wide coverage in various media reports, we would like to place on record our observations.

“Cinema exhibition remains the largest revenue contributor for the Filmed entertainment segment. As per FICCI report on India’s media and entertainment sector, March 2019, out of the total Filmed entertainment revenues of INR 174.5bn in 2018, theatrical box office (domestic & overseas) contribution was ~75%.Given India’ low screen density and the growth potential it offers, we expect Cinema exhibition to continue expanding its foot print in India for the next multiple years, which will continue growing it’s contribution to the overall revenue of the Filmed entertainment. It’s appropriate to point out that the year 2018 was a landmark year for global cinema industry with US/ Canada box office and China box office at record highs of US$ 11.9bn and US$ 7.9bn, respectively.

“For decades, theatrical release window has been a valuable model for exhibitors and producers alike. In India and globally, producers have respected the release windows and kept a sacrosanct gap between the theatrical release date & the date of release on all other platforms, i.e. DVD, DTH, TV, OTT etc. Cinemas continue bringing people together to share a communal experience, this unreplaceable element which is at the core of theatrical experience, continues to deliver a robust box office performance not just in growing market such as India but also in the more matured markets such as USA, China, Europe etc. where Cinemas have regularly competed with many similar initiatives, e.g. Netflix Original Movies etc.

“Theatrical and at-home are two completely different experiences, and each has their own places. Both these experiences have co-existed and prospered for decades and will continue to so in future. We are extremely buoyant about cinema exhibition’s growth prospects and remain committed to expand PVR’s reach in cities & towns across the country, while delivering an unmatched movie going experience to the Indian consumers.”

INOX statement on Jio “First-Day-First-Show”

“We note from various media reports, that one of India’s largest telecom enterprises, have announced that they intend to launch, by mid-2020, a service that would include, inter alia, making available movies for viewing at home, on the same day these movies are released in cinema theatres. While it is difficult to react based on the insufficient details available, given the wide coverage given to this announcement, and some queries we have received on the subject, we thought it would be appropriate to share our initial thoughts on the subject immediately. A more comprehensive reaction would perhaps require further details of the service being proposed.

“The theatrical exhibition industry, led primarily by the multiplex industry, has made significant investments in world class cinema theatres, by bringing in state of the art technology, luxurious ambience, bespoke comfort and unmatched service, ultimately curating an experience which can never be matched by watching movies on television screens at home. We strongly believe that Indian movie watchers’ love for cinema on giant screens is deep rooted and unshakeable, and this has kept, and will continue to keep, the industry alive and thriving for the past several decades, and for several decades to come.

“We would also like to point out that producers, distributors and multiplex owners in India have mutually agreed to an exclusive theatrical window of 8 weeks, between the theatrical release of a movie, and release on any other platform. This exclusive theatrical window is a model that is followed internationally, in order to ensure the robust financial viability of all the segments of the sector, and has been replicated in India.

“The producer of the film is the owner of the creative content and is therefore entitled to choose the platform for distribution and consumption of his content. However, in view of this mutually agreed exclusive theatrical window, he would have to choose between theatrical exhibition or release on any other platform, since release on both simultaneously would breach the mutually agreed exclusive theatrical window.

“It also needs to be pointed out in this context that anywhere between 60-70% of the revenues of any movie come from domestic theatrical exhibition. Hence, release of content on any other platform could potentially jeopardise a significant revenue stream for the content, and hence, is unlikely to be the preferred option for content owners.”

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