Recent trade chatter suggests that Netflix has agreed to pay Rs. 130 cr approx for the streaming rights of Dhurandhar, covering both parts of the franchise. A few years ago, that number may have raised eyebrows for being too low. Back then, Netflix, Amazon Prime Video and Disney+ Hotstar were cutting much bigger cheques and asking far fewer questions.

According to trade analysts, film acquisitions have swung through multiple boom-and-bust cycles since the pandemic. A trade business analyst says, “What the OTT industry is seeing now isn’t exactly a correction, but equilibrium. And Rs. 130 cr is a huge amount in the current phase of streaming film acquisitions.”

We take a look at what goes on behind streaming platforms calling the shots on film pricing and how the system has changed.

During the pandemic, big titles sparked bidding wars among OTT platforms, which is not the case at wars among OTT platforms, which is not the case at present. Trade experts estimate that OTT rates for big-budget films have fallen, with platforms unwilling to pay premium pricing when theatrical performance is to pay premium pricing when theatrical performance is uncertain.

Post-pandemic, several films for which streaming platforms paid a huge sum delivered neither box office platforms streaming traction. Platforms took note

Film business analyst Girish Johar says, "In the last two years, platforms discovered that acquiring a big-star film – no matter how expensive – doesn't necessarily translate into new subscribers. At the same time, box office collections have also faltered, with several high-profile releases underperforming across languages. What was failing in cinemas, platforms realized, was also failing on their apps. Hence, streaming services revised the rules of acquisition, linking the price of digital rights directly to theatrical performance."

A film that worked in theatres, platforms reasoned, A film that worked in theatres, platforms reasoned, had already cleared the hardest test – audience had already cleared the hardest test – audience acceptance. Paying more for such a title was not a risk acceptance. Paying more for such a title was not a risk but a calculated bet, say OTT executives. but a calculated bet, say OTT executives.

Trade analysts say that during the pandemic, streaming services were in a kind of gold-rush mentality. Cinemas were shuttered, audiences were captive at home, and platforms were under pressure – from investors and global headquarters alike – to grow quickly.

"Producers, sensing leverage, began demanding prices that were two or three times the perceived value of their films. Platforms not only agreed, but in several cases, bidding wars emerged around major releases,” says Girish Johar.

As audiences returned to theatres, subscriber growth slowed, and engagement dipped as box-office flops flooded OTT platforms.

Under the new model, negotiations have become more measured and more conditional. Producers open talks by asking for 60 to 80% of their production cost to sell streaming rights. What they often receive instead is a base price closer to 40%, with additional payouts tied to box office.

Trade analysts say, “If a film performs well theatrically, the final price rises in slabs – 5-10% at a time for all languages.”

For context, satellite television rights, which were once the backbone of nontheatrical revenue, now fetch barely 10% of a film’s budget.