Mumbai: Pure-play streamers have begun actively exploring and acquiring satellite rights, particularly for mid- and small-budget movies, over the past two months, according to producers and legal experts involved in negotiating these deals, marking a shift that could further cement the growing dominance of such platforms in the film distribution ecosystem.

A partner at a leading law firm in India said that, in the past two months, both pure and hybrid streamers had been showing clear interest in buying satellite rights.

"If streamers are in an advantageous position, then they ask for satellite rights. But if producers are in a precarious situation, then they bundle satellite rights with digital rights and sell them to streamers," said the lawyer, who didn't want to be named.

India's cinema ecosystem is witnessing a structural shift, said Suniel Wadhwa, co-founder and director, Karmic Films.

"Streaming platforms are moving upstream in the content value chain," he said. "Streamers are increasingly acquiring digital streaming and satellite rights, sometimes across all languages."

He cited films such as Kis Kisko Pyaar Karoon 2 and Mana Shankara Vara Prasad Garu (for all languages), the satellite and digital rights of which were acquired by streamers JioHotstar and Zee5, respectively.

According to film trade analysts, valuations of satellite and digital rights have changed considerably, largely because of meagre growth in television advertising (less than 5%) compared with the digital space (growing at over 20%). Consequently, digital rights contribute at least 75% of a film's non-theatrical revenue, followed by satellite rights, which contribute 20-25%, analysts said.

Also, the merger of Viacom18 and Disney Star has triggered a power shift as it has reduced opportunities for producers in satellite deals. "Today, satellite rights valuations have declined sharply, in the range of 80-90% in many cases," said producer Sunil Bohra, cofounder of Bohra Brothers. "Channels have become more selective in acquiring films. In this ecosystem, producers can no longer rely on satellite rights as a primary revenue stream. Therefore, producers are bundling satellite rights with digital rights and selling them to streamers."

Apart from the declining valuation of satellite rights, another factor behind pure streaming platforms buying satellite rights is their competition with linear television players. "For pure-play streaming platforms, acquiring linear rights is a defensive masterstroke," said Anushree Rauta, equity partner and head of media, entertainment and gaming practice at ANM Global. "By 'ring-fencing' content, these platforms can effectively limit competition with linear television to preserve digital exclusivity and drive subscriber growth."

In addition to reducing competition with television and enabling the migration of traditional TV audiences to streaming platforms, streamers may monetize these rights in the future, producers said.

"Streamers are building multi-language catalogues that can be monetized later through syndication, bundled licensing or strategic broadcasting deals," Wadhwa said.