Production Houses Tap OTT Deals for Faster Project Funding

MEDIA-AND-ENTERTAINMENT

Overview

India's media sector is pivoting content financing. Production houses now secure capital against confirmed OTT, TV, and music contracts, moving away from box office reliance. Structured credit platforms offer faster working capital by discounting receivables, providing lower-risk investments backed by contracted cash flows.

Media Financing Shifts Away From Box Office

India's media and entertainment industry is undergoing a significant shift in content financing. Production houses are increasingly raising capital against confirmed OTT, television, and music contracts rather than relying solely on box office performance. This move addresses cash-flow gaps that arise when streaming platforms defer payments until content goes live.

Structured Credit Platforms Emerge

Structured credit platforms like BetterInvest and NV Capital are stepping in to fill this void. They provide short-term financing by discounting contracted receivables through escrow-backed arrangements. This allows production houses faster access to working capital.

The model offers investors a relatively lower-risk way to participate in content financing. Investments are backed by contracted cash flows, a more predictable stream than speculative box office returns. Sedhumanikandan, co-founder of BetterInvest, noted their aim to convert this into a secure asset class for external investors.

BetterInvest has facilitated transactions worth nearly ₹800 crore, funding over 230 projects, primarily films. The platform offers financing rates typically between 18% to 24%, significantly lower than the 24% to 36% seen in private financing in some regional markets. These deals are against confirmed receivables from major players like Netflix, Amazon Prime Video, JioHotstar, Zee Entertainment, and Sony Pictures Networks India.

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