Will Amazon digital rights cannibalize theatrical revenue?

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In olden days, producers used to get major revenues from theatrical run and a little more from audio rights. But later so many other sources of income have been evolved like – TV satellite rights and digital rights. Until recently these digital rights were a small portion but now this also has become as big as dubbing or remake rights. But there is a catch here and if producers do not understand the consequences, in long run it will hurt the very existence of cinema industry.

Nagarjuna – Samantha starrer “Raju gari gadhi2” is releasing within 1 month of release through Amazon. If more movies are screened this way, audience might just wait and watch on Amazon. Of course, this depends on how the deal is structured. To make little more money, producers signing the contacts to screen digitally in a week too. Amazon also will pay more money to producers if they are allowed to screen as soon as possible after the release. So producers are thinking, as the theatrical run is already over (nowadays theatrical run is almost over within 2-3 weeks after the release of the movie), we can get the best deal from Amazon and allow them to screen whenever they want.

But in long term this will have a huge blow on movie ecosystem. Audience who understand that movie can be watched within couple of weeks after release, they may get habituated to watch in Amazon and that will have a huge impact on theatrical revenue of the movie, which is still the number one source for any movie. TFI has to meet and agree on minimum number of days after which movie can be screened digitally or on satellite for the benefit of the industry in long run.

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