For decades, the arithmetic of Indian cinema was brutally simple. A film opened in theatres on a Friday, and by Monday morning everyone knew whether it was a hit or a disaster. That certainty is gone. Today, a film’s life has two acts — the big screen and the small one — and the money flows in ways that would have baffled producers even ten years ago.

The pandemic forced the experiment. With cinemas shut, dozens of films premiered directly on streaming platforms, and for a while the theatre looked optional. That moment has passed. Per a FICCI-EY industry report cited by The Economic Times, direct-to-digital premieres halved in 2025 — from 60 films in 2024 to just 30 — while 470 films released in theatres first, up from 440. Gross box office collections climbed 14 per cent to Rs 13,000 crore, an all-time high.

The industry has returned to a theatre-first strategy — but the economics behind that choice are more layered than they look.

How theatres make money for a film

A theatrical release is the only route with unlimited upside. Ticket sales arrive front-loaded, and a genuine blockbuster can earn many multiples of its production cost — trade observers quoted by Moneycontrol put the ceiling at five to seven times the budget, a figure no streaming deal can match.

The catch is that theatres are also the riskiest bet. India remains severely under-screened: the Hindi industry makes around 2,000 films a year, but roughly 9,600 screens can accommodate only a few hundred releases, as trade editor Atul Mohan told Mint. A studio must also spend around Rs 8–10 crore on publicity and distribution for a decent nationwide release — and an estimated 30–40 per cent of films made in recent years never released at all.

Theatres, then, are a high-stakes gamble: enormous potential, no safety net. Which is exactly why streaming changed everything.

How streaming deals work

Streaming platforms buy films in two main ways. In the acquisition route, a platform buys the digital rights of a finished film for a fixed sum, paid regardless of box office performance. In the commissioning route, the platform funds the project from the start. Either way, the producer gets assured money — for mid-budget films, often more than theatres would ever deliver.

Producer Mansi Bagla told Moneycontrol that a direct-to-digital release can deliver three to five times the returns on investment, depending on how satellite and digital rights are packaged. The trade-off: a one-time payment, with no share in any upside. In theatres the earning potential is unlimited — and so are the risks. On streaming, the earning is capped but certain.

The guarantee has become so central that some producers treat streaming money as the primary recovery mechanism, with theatrical collections secondary — “unfortunate but true,” as one industry voice told the Deccan Chronicle.

The new playbook: theatres first, streaming second

What has emerged is a two-step rhythm: a film opens in cinemas to build buzz, then arrives on streaming roughly eight weeks later — about four weeks for South Indian films, per trade discussions reported by the Deccan Chronicle. The theatrical run does two jobs at once: it generates ticket revenue, and it sets the price of the streaming deal. PVR INOX managing director Ajay Bijli told The Economic Times that box office performance remains the benchmark for OTT deal-making — and that a strong run lifts viewership when the film reaches streaming.

A cinema release has also become a precondition for other revenue. Even Amazon Prime Video insists on picking up only films that have released theatrically, and satellite deals treat it as mandatory, as Mohan noted. Selling satellite and digital rights together after release can recover 50–60 per cent of a film’s investment.

The maths a producer now does looks like this:

• Theatrical costs: production plus Rs 8–10 crore in publicity and distribution for a wide release.
• Guaranteed income: fixed payments from streaming and satellite rights, often the largest assured chunk.
• The window: roughly eight weeks of cinema exclusivity before the film moves online.
• The multiplier: a strong box office run raises the value of every subsequent deal.
• The risk valve: a flop can still recover much of its cost if the streaming deal was signed early.

Theatres and streaming are not at war; they are two halves of the same business. The cinema is the shop window where a film proves its worth, and streaming is the long shelf where it keeps earning. The producers who thrive are the ones who stop asking which screen matters more — and plan for both.

Compiled by the Khabar 24h Editorial Desk from publicly available sources.