Will Jio First Day First Show pose a threat to movie theatres?

What will be the impact of free Jio Fibre 4k LED TV offer on the television industry?

by Moumita Bhattacharjee & Anjali Thakur
Published - Aug 14, 2019 8:31 AM Updated: Aug 16, 2019 3:43 PM

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At the 42nd Annual General Meeting of Reliance Industries Limited, Chairman & MD Mukesh Ambani introduced a disruptive concept of watching movies on the day of the release itself, and that too in the comfort of one’s home. Named Jio First Day First Show, the service will be launched in 2020. Though a good news for movie buffs, the service could be a big threat for theatre and multiplex owners who are anyway fighting a battle with piracy.

We spoke to some players in the industry to find out what implication could Jio First Day First Show possibly have on the theatres. Interestingly, most multiplex owners feel the service will not really be a threat to theatres, and they have their reasons to say so. Some of them assert that producers have so far abided by the rule of keeping a difference of eight weeks between playing the content in theatres and on other mediums, and they will surely continue with it.

Supporting the argument, PVR Cinemas, in a media statement, said, “In India and globally, producers have respected the release windows and kept a sacrosanct gap between the theatrical release date and the date of release on all other platforms, i.e. DVD, DTH, TV, OTT etc.”

Multiplex owners also believe the experience of watching a film on the big screen will always be an attraction that will bring film lovers to theatres.

Asserting the point, INOX Leisure, in a statement, highlighted the investments that have been made by theatres to give a world-class experience to consumers. “The theatrical exhibition industry, led primarily by the multiplex industry, has made significant investments in world-class cinema theatres by bringing in state-of-the-art technology, luxurious ambiance, bespoke comfort and unmatched service, ultimately curating an experience which can never be matched by watching movies on television screens at home,” read the statement.

Echoing the belief, PV Sunil, Managing Director, Carnival Cinemas, said they believe the experience of watching a movie with a cross-section of the population in a theatre along with loud reactions takes it to a different tangent as compared to watching it in the solitude of a drawing room.

Preetham Daniel, Senior Vice President Sales and Marketing -Asia, Harkness Screens, too supported the argument. “Movie going is an event, and theatres eventise films. This is an experience people look forward to. As much as content is the king, without the experience factor of the movie theatre, the content doesn’t stand a chance.  The quality of home theatre systems and sound systems in the house does not match the sound quality and experience of a theatre,” he reasoned.

He, however, agreed that Jio First Day First show is definitely a very disruptive idea. “A few companies have tried this in the past, including Prima Cinema based in California. Also, back in 2016 Apple mulled over the idea of releasing films at $15 a movie on iTunes before it hit the DVD release,” said Daniel.

But there are also a few who believe Jio First Day First Show isn’t all bad for theatres.

Manoj Desai, Executive Director, G7 Cinemas, Gaiety Galaxy & Maratha Mandir Cinema, is confident the new service will completely eradicate piracy from the system. “It will be a loss for people who pirate films. Jio will provide high-definition digital print for viewing on the same day which will nullify the effect of piracy.”

When asked what if footfalls at the theatres dwindle, he asserted it will depend on people. “People who want to watch it on the big screen, will still come to the theatres,” he said.

Trade experts, meanwhile, believe the actual impact will depend on what business model Jio takes up.

Film producer and trade expert Girish Johar explains there are two ways Jio will get the content. Either they will acquire them or produce films. “If they are producing it, I don’t think anybody will have an issue. But what happens if they acquire the content? Now I am a producer. So, if for example, I invest Rs 10 on a film, I would obviously want a return of Rs 12. If Jio wants to acquire my film and release on digital only, and gives me Rs 14-15 for the right, I am okay. To me, as a content producer, the money will be another opportunity to make another film. There are films that may not be able to carry P&A or marketing and distribution cost. They will go on these platforms.”

Johar doesn’t believe Jio will disrupt the whole ecosystem, because multiplexes are anchor tenants to various malls across the country. It will affect the food business in these malls and footfalls as well. “The gamechanger would be, say a Varun Dhawan or a Shah Rukh Khan film. If I was in Jio, I would go to Akshay Kumar and say since you have three films, release one exclusively on OTT platform. Such things are happening in the West with Netflix and Amazon,” he added.

Another announcement by Mukesh Ambani that has caught everyone’s attention is the Jio Forever plans for customers opting for annual plans. Long-term subscribers will get an HD or 4K LED TV and a 4K set-top box free. So, what impact will this have on the smart TV brands? Well, while some are excited about the news, other gave mixed responses.

According to Pallavi Singh, Ecommerce Operations Director, Thomson TV India, Jio Fiber is a good thing that will happen.

“As far as the TV market is concerned, Reliance already makes television. I don’t think giving away TV with fibre would really impact their sales. Internet connectivity is obviously a big hit, but we still have to see how far will it reach and what is the quality of the product? A lot of customers like to know about the product before they buy it. We will see what kind of plan they roll out. Maybe then, we’ll plan our combat strategy,” said Singh.

Though consumption of video on digital platforms is on the rise in the country, good old television continues to score in terms of penetration and has a large headroom left to fill. According to the 2018 Broadcast India survey, the country has 197 million TV homes, up from 183 million in 2017.

According to Vishwajeet Parashar, Marketing Head, Bajaj Capital, the trend of offering freemium offers is a big hit in the industry.

“Freemium offers coupled with a rapid market penetration strategy has been an all-time win for the telecom giant. The traditional TV sector is definitely threatened as the new-age customers would seek more value for less. The Moore’s law may apply to TV, and smart TV would be the neo-normal. At the same time, the enhanced net speed would be a delight to the ever increasing netizens of India. This would usher a new era of IOT-enabled devices which would actually compensate the loss (if any) suffered by big brands by losing market share,” shared Parashar.

A highly placed source in the industry, meanwhile, said Relaince’s plan is not an immediate problem for television brands. “However, we have to watch when the plan actually rolls out. We have seen how Jio has disrupted the telecom market and we definitely do not want them replicate it in the television market. It will most likely affect the entry level brands, and also bigger brands as far as their entry level TV sets are concerned. But as of now, it is not an immediate threat.”

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