Traditionally, Malayalam films were released in theaters, followed by a home video release on DVD or digital platforms. However, with the proliferation of OTT platforms, Malayalam movies are now being released directly on these platforms, bypassing traditional distribution channels.

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OTT platforms have also increased the visibility of Malayalam cinema, providing a global audience with access to Malayalam movies and series.

Some Malayalam movies are now being released simultaneously in theaters and on OTT platforms. This strategy allows viewers to choose how they want to watch the movie, providing an option for those who prefer the comfort and safety of watching from home.

The Malayalam film industry, lovingly known as Mollywood, has long enjoyed a reputation for content-driven, realistic cinema. For decades, the box office collection was the sole barometer of a film's success, and the theatrical experience—with its community viewing and larger-than-life presentation—was considered sacrosanct. However, the advent of Over-the-Top (OTT) platforms such as Netflix, Amazon Prime Video, Disney+ Hotstar, and Sony LIV has fundamentally restructured this paradigm. The phenomenon of the "OTT Malayalam release" is no longer a mere distribution alternative; it has become a powerful cultural and economic force that has democratized access, redefined stardom, and saved the industry from near-collapse.

Several Malayalam movies are now being released directly on OTT platforms, eliminating the need for a theatrical release. This trend is particularly evident for films that might not have had a large audience or marketing budget to support a traditional theatrical release.