At Reliance Industries Limited's 42nd annual general meet on Monday, the company proposed a plan to bring movies on its Jio GigaFiber powered set boxes to an estimated 20 million Indian homes with a "First-Day-First-Show" experience. Within less than 24 hours of such an announcement, two leading multiplex majors in India, PVR and Inox, have raised concerns of such a service posing a threat to their business models.
The Jio service is scheduled to roll out by mid-2020 and will make the first-of-its-kind experience available to all the users of Jio Fiber.
PVR Cinemas pointed out the contractually placed eight-week exclusive theatrical window that has helped both the context makers and distributors.
In an exchange filing, it said, "For decades, the 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."
"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," Inox Leisure said in its press release.
Further Inox said that since the producer of a film is the owner of the creative content created, he/she would have to choose between theatres or other digital platforms and not both due to the above mentioned theatrical window.
"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 said.
While Reliance Jio has not made the complete details of this facility available yet, these leading multiplex are clearly worried of losing their significance. These concerns are valid considering how RIL almost killed all other players in the telecom sector after the launch of Jio and changed the way India used data and calling services.
For the first quarter of the financial year 2019-20 (the most recent quarter), PVR Cinemas reported a 69 percent dip in its profit over sharp increase in financial costs.
On Tuesday, shares of PVR Cinemas dipped over 8 percent to hit an intraday low of Rs 1,345.25 per share on NSE, while Inox Leisure saw its shares fall by 10 percent to an intraday low of Rs 270.95 apiece.