Cinema in Transition: Marketing Myopia, Technology, and the Shifting Cultural Core

The term Marketing Myopia was coined by Theodore Levitt in his seminal 1960 Harvard Business Review article. It refers to the short-sightedness and inward-looking approach of companies focusing on their products rather than the needs and wants of their customers.

The case of American railroads is a classic example of marketing myopia, where companies focus narrowly on their products rather than the broader needs they serve. Railroads saw themselves in the railroad business instead of the transportation business, ignoring the rise of cars, trucks, and airplanes that better met customer needs for convenience and flexibility. As a result, they failed to adapt and lost market share. This same short-sightedness affected Kodak, which clung to film even as digital photography emerged, and Blockbuster, which stuck to physical rentals while streaming services like Netflix redefined home entertainment. These examples highlight how companies that define themselves by their product rather than the value they provide risk becoming irrelevant.

1^st wave of transformation

In 1990s India, single-screen theatres were still the primary venues for film viewing, but they stood at the crossroads of transition just as India was liberalizing and audience tastes were shifting. Post the 1991 liberalization, India saw a media boom, with cable television entering middle-class homes through networks like Star TV, Zee TV, Sony, and DD Metro. This gave rise to 24/7 entertainment—daily soaps, music videos, international movies, cricket, and later, Bollywood movie premieres—at home and at no additional cost beyond the monthly cable fee. Audiences flocked to colorful, dynamic private channels offering soaps, movies, and music, reducing DD viewership. This exposed Doordarshan’s inability to pivot quickly in a rapidly changing entertainment economy.

The 1990s piracy boom dealt a critical blow to single-screen theatres, disrupting their economic model.  With the spread of VCRs (Video Cassette Recorders) and video parlours, pirated VHS tapes of new films became widely available, often within days of theatrical release. By the mid-1990s, CDs and VCDs replaced VHS, further lowering cost and increasing piracy’s reach. Pirated content was cheap (₹10–₹30 per CD), easily accessible through street vendors, and didn’t require audiences to visit a theatre.

The late 1990s saw spiraling budgets and digital projection becoming essential. Multiplexes could recoup by charging premium ticket prices (₹500–700 versus ₹30–40 on single-screens). Rising costs meant fewer producers made films suited to single screens; distributors also avoided them due to poor economics and additional digital screening fees

2^nd wave of transformation

The recognition of film as an industry by the NDA government in 2001, under Prime Minister Atal Bihari Vajpayee, marked a turning point in the Indian cinema landscape. This moves formalized Bollywood and regional cinema as a legitimate sector of the economy, opening the gates for corporate investment, institutional financing, and structured business practices.

Media and entertainment arms of companies like Reliance, UTV (later acquired by Disney), Viacom18, and Balaji Telefilms began producing and distributing films. Inspired by Hollywood, corporate culture was adapted in Bollywood. Corporatization encouraged an export-oriented approach, tapping into NRI and overseas markets with subtitled and dubbed versions.

There was rise of multiplex chains like PVR and INOX during early 2000s. Policy changes—such as tax incentives, 100% FDI in exhibition, and entertainment tax waivers—favoured multiplex investment and expansion due to economic liberalization policies of the government. There was emergence of urban, low- to mid-budget, niche films that catered to a young, English-speaking, multiplex-going audience. Films like Jhankaar Beats and Joggers’ Park were products of the multiplex revolution, which enabled a new kind of Indian cinema—urban, experimental, dialogue-heavy, and targeted.  

Traditionally, films were distributed using bulky physical reels, which were expensive to transport and delayed releases in smaller towns. With the advent of digital cinema technologies like UFO Moviez and Qube, films could now be delivered instantly via satellite or hard drives, enabling simultaneous pan-India releases and faster revenue recovery for producers. While multiplexes quickly adapted to this model with multiple screens and upgraded digital infrastructure, most single-screen theatres could not afford the necessary technological upgrades. This shift in audience taste hastened the decline of single-screen theaters, which could no longer compete on experience, cost, or content viability.

Yet, PVR and INOX found themselves squeezed between rising operational costs and shifting consumer attention, highlighting how entertainment consumption evolved faster than the cinema exhibition business could adapt.  Multiplexes promise to support smaller-budget content alongside mainstream blockbusters—but the reality diverged significantly.  Since multiplexes were investing heavily in premium infrastructure—multiple screens, luxury seating, parking, food courts, and digital projection—all of which required high ticket prices and limiting their focus among urban, middle-class viewers.

There was parallel exponential growth of television entertainment in the 2000s, driven by daily soaps, reality shows, and movie premieres on satellite channels, offered families a convenient and cost-free alternative to cinemas. The boom of D2H happened in the mid-2000s to early 2010s, as it transformed television access in both urban and rural India. This trend deepened with the advent of IPL in 2008, which combined cricket with celebrity culture and prime-time entertainment. IPL became a cultural phenomenon, drawing massive viewership away from theatres during its season—leading to a noticeable dip in footfalls at multiplexes.

3^rd wave of transformation

In the early 2000s, as internet speeds improved, audiences wanted instant, affordable access to music, movies, and TV shows. However, legal distribution channels were slow, expensive, or unavailable in many regions. This gave rise to peer-to-peer (P2P) file-sharing platforms like LimeWire, and BitTorrent, which enabled users to download and share media globally. Sites like Torrentz, KickassTorrents, and 1337x became gateways to Bollywood, Hollywood, and even TV shows not aired in India.  In engineering colleges and hostels, tools like DC++, LANShare, and Torrents over LAN enabled students to share movies, games, and TV shows without internet. As broadband spread post-2005 (thanks to BSNL, Airtel, etc.), Indians embraced BitTorrent clients like uTorrent and BitComet.

The 2010s saw a shift from downloading to streaming, with the emergence of platforms like YouTube, Netflix, and Hotstar. Legal streaming reduced piracy temporarily by offering affordable, on-demand access.  Jio launched its 5G services (Jio True 5G) in October 2022, followed by Airtel 5G Plus. The networks lead to buffer-free streaming of HD and 4K content on mobile devices.

Film production and consumption

In contrast to the early 1990s, the Indian film industry today sees fewer independent producers, largely due to the escalation in film production budgets. In the 1990s, films were often made on modest budgets with manageable risks, allowing a wide range of individual producers to participate, including regional backers and small-scale financiers. However, with the corporatization of Bollywood, rising star fees, expensive marketing campaigns, and reliance on high-end technology, the cost of making and marketing a mainstream film has skyrocketed.

Bollywood’s box office failures today are less about audience disinterest and more about the industry's inability to evolve with changing tastes, especially ignoring India’s linguistic, cultural, and literary diversity. As regional films (e.g., Kantara, KGF, RRR) thrive by staying rooted in local ethos with fresh narratives, Bollywood is being challenged to reinvent itself beyond the Mumbai-centric, star-driven template. Today’s mainstream Indian cinema, especially Bombay-centric filmmaking, is increasingly shaped by corporate interference. Films are often pre-sold based on star power, with legal and finance teams influencing scripts, leaving little room for creative risk or originality. End credits are crowded with corporate names unrelated to the storytelling.  

Historically, producers held the creative power in Indian cinema, but today, OTT platforms are increasingly dictating what kind of content gets made. Bollywood, after being stagnant for nearly a decade, has lost a large part of its audience—some have shifted to Hollywood and global content, while others now prefer masala-heavy South Indian films.

High ticket prices, inflated star fees, and weak storytelling have pushed viewers away from theatres. The rise of OTT coincided with a decline in the middle class’s disposable income, making on-demand, affordable streaming more appealing. Moreover, rising ticket prices, especially in multiplexes, have pushed audiences to wait for digital releases rather than spend ₹300–₹500 on an average theatrical experience

The high cost of tickets and food at multiplexes is not just about pricing—it reflects a deeper disconnect between theatre chains and film production houses and the changing entertainment habits of their audiences. By not making films for these smaller centres or not giving them films, film industry is driving audiences to OTT platforms. Corporates and studios prioritize profits and early returns, often by inflating ticket prices, even if it means losing the broader audience. The content audiences get at such high prices often doesn’t justify the cost, which further alienates viewers.

The statement “Films don’t fail, their budgets fail” underscores a crucial insight into the economics of modern filmmaking. There has been lot of commercial failure of films in Bollywood. This is often less about the quality of the content and more about misaligned expectations, overestimated revenues, or poor budgeting decisions. Meanwhile, rising ticket prices due to inflated film production and marketing budgets have created a growing disconnect with audiences—something clearly visible when theatres are packed on discount days like World Cinema Day. This proves that pricing, not just content, is a major barrier.

Present Ecosystem

Meanwhile, OTT platforms like Netflix, Amazon Prime, and JioCinema recognized the shift in consumer behavior—demand for on-demand, affordable, and home-based entertainment. OTT Platforms like Netflix and Prime Video have also highlighted films giving visibility to world cinema & TV series that traditional Bollywood ignored. For instance, a global push behind shows like Nanette turned them into cultural events through sheer network effect.  

Netflix’s success is a clear example of how technology can drive both customer acquisition and content delivery backed by a strong risk-taking culture. One of its first major innovations was the Cinematch algorithm, a collaborative filtering system designed to predict whether a customer would enjoy a particular movie based on past viewing habits. To refine recommendations further, Netflix introduced the Queue Add Confirmation Layer (QUACL), which suggested similar titles when a user added a movie to their watchlist. This system also served as a testing ground for Netflix's initial machine learning experiments.

Conclusion

Multiplexes did initially open space for art and parallel cinema, in line with their stated goals—but over time, urban market preferences, financial incentives, and rising production and exhibition costs shifted their focus toward mainstream, premium content.  PVR and INOX largely have defined themselves as cinema experience providers, focusing on the premium in-theatre model. Their initial premium model, once a strength, became a vulnerability in a fragmented media landscape. PVR now depends on big hit movies to earn good profits, as smaller films don’t bring in enough money. To reduce losses, PVR is selling off parts of the business that aren’t essential, closing theaters that aren’t doing well, and trying to lower rent costs. While PVR makes money from tickets, food, ads, and events, it only works if people actually come to the theaters — and that’s happening less and less.

What started as an affordable and accessible alternative to cable TV and cinemas is now becoming expensive, with viewers often needing to subscribe to multiple platforms—such as Netflix, Amazon Prime, Disney+ Hotstar, Zee5, Sony Live, and JioCinema Premium—to access diverse content.  As the subscription costs of OTT rose, content got fragmented, and paywalls increased, many users have reverted to pirated streaming sites and Telegram channels offering movies, series, and even live sports for free.  The OTT fragmentation not only raises overall entertainment costs but also leads to confusion and frustration as content is scattered across services. Free or ad-supported access is shrinking, making quality content less accessible to budget-conscious or rural users, thereby deepening digital inequality. Moreover, the overload of options behind paywalls is causing content fatigue, while poor content discovery algorithms often push mainstream titles over niche or regional ones.

However, there’s growing concern that OTTs—especially international ones—are dumbing down content to gain subscribers and avoiding culturally rooted risks due to limited understanding of Indian diversity. Cinema should challenge us and spark dialogue, but today’s ecosystem often prioritizes reach over depth. Instead of offering easier access to our cinematic heritage, streaming has made it tougher than ever to find and watch classic Indian films in their original form.

The future of OTT platforms is increasingly shifting toward paywalls across all content, moving away from the earlier "freemium" or ad-supported models. The battle continues, but until content becomes more inclusive and accessible, piracy will remain a parallel—and powerful—force in media consumption. The direction OTT takes will shape whether content remains a tool of democratization or becomes a commodity of privilege.

Marketing myopia teaches us that cinema stakeholders must see themselves not just as filmmakers, distributors, or exhibitors, but as part of the broader experience economy. Those who focus on customer preferences, accessibility, and evolving viewing behaviour will survive this evolutionary tale. Those who cling to outdated models or prestige assumptions may become irrelevant—just like railways, Kodak, or Blockbuster in their industries.