Mumbai: India’s media and entertainment industry is undergoing a structural shift in content financing, with production houses increasingly raising capital against confirmed OTT, television and music contracts rather than relying on box office performance, industry executives said.

As streaming platforms and broadcasters typically release a large portion of payments only after content goes live, producers often face cash-flow gaps during production. This has opened up opportunities for structured credit platforms such as BetterInvest and NV Capital. These platforms provide short-term financing to producers against their contracted receivables from broadcasters and music labels, who need to route payments through escrow accounts.

This model allows production houses to access working capital faster, while offering investors a relatively lower-risk way to participate in content financing, backed by contracted cash flows instead of unpredictable returns.

“Traditionally, the media and entertainment industry has been funded by private financiers within the ecosystem. We saw an opportunity to convert this into a more secure asset class and allow investors outside the industry to participate,” BetterInvest cofounder Sedhu Manikandan said. “We wanted to position this as an investment product through which investors can diversify into the media sector.”

Over the past three years, BetterInvest has executed transactions worth close to Rs 800 crore and funded more than 230 projects, largely with big production houses. Films account for nearly 80% of its funding portfolio, with the rest spread across television shows and web series. The company operates across multiple languages, including Hindi and southern regional markets.

“Multiple non-theatrical revenue streams such as OTT, satellite, music, dubbed and overseas rights, along with recent equity deals in production houses, have strengthened organized financing in the film industry. These developments are positioning films as an alternative asset class, offering investors more predictable revenues than theatrical releases," said NV Capital managing partner Vivek Menon.

With rights monetization possible for up to 60 years, the sector provides long-term upside, a balanced risk-reward profile and security backed by content rights, he added.

Structured credit platforms are also addressing two long-standing challenges in content financing: the cost and speed of capital. In several regional markets, private financing rates range between 24% and 36%, industry executives said.

“Our offerings typically fall in the 18% to 24% range, depending on the project and producer profile,” Manikandan said.

These platforms fund production houses against confirmed receivables from OTT platforms such as Netflix, Amazon Prime Video and JioHotstar, broadcasters including Zee Entertainment and Sony Pictures Networks India, as well as music labels. In a typical deal, an OTT platform may pay only 10-30% upfront at the time of signing, with the balance released after the content goes live, often six months later.

“We enter into an escrow arrangement with the platform. Once the remaining payment is confirmed to be routed through the escrow account, we fund about 50% to 80% of the receivable, depending on the project timeline and risk profile,” Manikandan said.

As content budgets rise and deal sizes increase, BetterInvest is moving towards a more institutional funding model. The company has registered with the Securities and Exchange Board of India to launch a Category II alternative investment fund to back film, TV and digital content projects, after encountering several large-ticket contracts in recent years that could not be financed under its existing marketplace structure.

It is also evaluating an NBFC licence to offer customized financing products, as big-budget, star-led projects require large pools of capital and fast turnaround times.