Emerging out of its linear TV shadow, the OTT space in India has come a long way in a very short span of time. It is no longer a mere platform for catch-up shows or mini web-series, but has redefined entertainment like never before. The year 2018 had been quite special for the video streaming platforms
With smartphones becoming ubiquitous and an integral part of our lives, entertainment too has undergone a massive change in today’s digital age, thanks to the over the top (OTT) platforms such as Netflix, Amazon Prime Video, Hotstar, SonyLiv and Eros Now, piggybacking on our telecom/ internet carriers. The recent popularity of ‘Sacred Games’, ‘Ghoul’, ‘Mirzapur’ etc. speaks volume about video-streaming platforms becoming our ideal companion while travelling or before going to bed. The trend is catching up in such a way that people’s preferences are shifting from big screens to smartphones, and that too as per ones mood and convenience, unlike televisions and celluloid where one has to wait for a particular show to start.
Emerging out of its linear TV shadow, the OTT landscape is in fact getting its own band of subscribers in India. It is no longer a mere platform for catch-up shows or mini web-series. These platforms, which provide video content over the Internet, are coming up with compelling original content that is finding great traction with viewers. According to a Frost & Sullivan study released last year, the OTT video market in India is beginning to see real traction with more competitors and new innovative platforms on the back of cheaper data bundles. With 180.3 million active online video viewers and almost 4 million registered subscribers (until June last year), the OTT video services market earned over Rs 37 billion in 2017, and is expected to grow at a CAGR of 17.3 per cent over the next five years, the study said.
The OTT video market in India is gradually becoming a mainstream entertainment destination with the rapid rise in the internet user base and cheap smart devices which are now easily available across the globe. Content genres like entertainment, sports, and regional are emerging as the key focus areas for the OTT platforms. Most of these players are at early stages of their maturity and are focusing on rapid consumer aggregation and driving engagement.
Although SonyLiv and Hotstar were already in the business of live streaming of sporting events, it was in 2017 when the OTT platforms made their presence felt in the Indian market with shows like ‘Inside Edge’ starring Vivek Oberoi and Richa Chadha and a couple of the then recent Hollywood and Bollywood hits on Amazon Prime Video. Interestingly, 2018 witnessed expansion of a robust roster of content—the year turned out to be one of big wonders on the small screen, as 32 video streaming platforms came into picture. Whether it’s Amazon, Netflix, Hotstar, Voot, Zee5, Eros Now, Viu, SonyLiv or ALTBalaji, the increasing number of mobile applications has proved to be a boon for all- the audience, operators and the creators.
According to Sunil Lulla, Group CEO, Balaji Telefilms, the firm behind ALTBalaji; the audiences today have become more accepting to new concepts. This has led to major OTT players now heavily investing in exclusive original content across languages on the platforms. Lulla further believes that 2018 had been an absolute game-changer with regard to the changing perception of digital audiences. Reports say the growth in mobile broadband speed and 4G services by Reliance Jio saw a rapid increase in data consumption across the country out of which video streaming accounts for 70 per cent of the total data consumption on mobile.
Similarly, Shilpa Taneja, Senior Manager (Strategy and Operations) at Deloitte India is of the opinion that the growing penetration of smartphones and roll-out of 4G in the last couple of years has widely promoted the overall digital access and consumption across the country. This has led to an increasing demand for premium digital content and across categories such as movies, music, live sports. This increased consumption, as per Taneja, has come on two fronts – more number of people viewing content over OTT apps and people spending, on average, greater amount of time on digital media.
As per a recent report by The Boston Consulting Group, titled ‘Entertainment Goes Online’, the OTT content market in India is at an inflection point now. The report pegs the Indian OTT market to reach $5bn in size by 2023. This growth is being driven by rising affluence, increase in penetration of data into rural markets and adoption across demographic segments including women and older generations. The report is based on a first -of-its-kind consumer survey that seeks to understand consumers’ motivations in adopting OTT content over other conventional modes of content delivery. The survey results showed that there is a room for many types of OTT models such as SVOD (subscription-based platforms), AVOD (advertising-based platforms) and TVOD (transaction-based platforms) to succeed in the market.
Kanchan Samtani, Partner and Director, BCG, said, “Majority of India has a single TV per household. Affordable data has created an alternate medium where consumers, for the first time, can tap into content basis individual preference at a time and space convenient for them. Whilst the current market operates with a largely advertising paid content paradigm, consumers are not averse to paying for convenient content access that OTT unlocks.” Affluence and wide variety of content being developed for OTT market including diversity in genres and language gives OTT market a favourable edge over its traditional counterparts.
The BCG study identified three archetypes of customers in the Indian market, 1) traditionalists – who primarily consume on other than OTT platforms, 2) OTT Experimenter – who has significant consumption on both conventional and OTT platforms 3) Early Adopter – whose primary consumption occurs on OTT platforms. While early adopters are still a more urban phenomenon, going forward it will be more equally distributed. 48% of India’s internet users (~650 million by 2023) are expected to be from rural areas. With development of regional content by various players, the rural market is poised to become a significantly large opportunity for players. OTT is riding the wave of increased data consumption and internet access in rural India, has opened a new distribution channel that is viable for regional and niche content.
“One of the key insights of our consumer work was that, while OTTs rely on top-notch hero content to attract consumers to the platform, the stickiness of these consumers is not very high unless accompanied by ways in which they engage more deeply with the platform and is associated with strong marketing efforts,” said Samtani.Indian content including music, Bollywood content and cricket have large following in the Indian diaspora also. OTT players with Indian content have potential to tap into this market too. “While the NRI content market is huge and demonstrates willingness to pay, it is not only dominated by cricket – Bollywood music and films are very significant. With their large content libraries, Indian OTT players are sitting on a metaphorical gold mine to serve this increasingly important customer base,” said Gaurav Jindal, Principal, The Boston Consulting Group.
If we talk about investment, US-based Netflix and Amazon have infused far more in creating original content in India than their domestic counterparts. Netflix and Amazon spent about Rs 600 crore and Rs 500 crore respectively for India originals in 2017, while players like SonyLiv, Eros Now and ALTBalaji together invested under Rs 1,000 crore, the BCG study found. Netflix’s Sacred Games and Amazon’s Mirzapur are some of the India originals that these players have spent significant marketing bucks on.
The report says online video streaming apps constitute the only segment seeing higher amounts of time being spent by Indians in a day. Most other categories, including social media and chat, are seeing a downfall. The investments in local originals are expected to go up. This has led to homegrown players too bringing original contents. Star India’s Hotstar too has invested heavily in India, but a lot of that has gone into a single live sporting event – the digital rights for IPL for five years, where it is estimated to have spent Rs 4,000 crore. The industry typically sees multiseason productions of local content as originals.
While Hotstar and Amazon Prime Video have almost similar subscription charges, Netflix has positioned itself as a premium player. Hotstar is said to have the highest number of paid subscribers, at about 7 lakh. Besides Hostar, the other content king that has emerged in India’s OTT market is JioTV, which was installed on over 30% of Indian smartphones, says Kalagato, a Delhi-based market intelligence firm. JioTV, a live TV app specifically available to customers of Reliance Jio, launched in August 2018, has beaten the likes of Vodafone Play and AirtelTV by offering over 600 free live TV channels. JioTV has been able to penetrate so much of the market because it comes pre-bundled with Jio’s devices and SIMs.
JioTV, which is said to be a bigger threat to Hotstar than Amazon and Netflix due to its strong distribution network, has been bullish at driving customer adoption that it actually captures a larger share in tier 3 cities, where smartphone penetration is thin and network patchy. Following Jio’s accomplishment in reaching far off areas, ErosNow, owned and controlled by Eros Digital, the digital media management arm of Eros International plc, recently tied up with state-owned BSNL to take its content to villages.
Balaji Telefilms-owned ALTBalaji, which is famous among Indian housewives due to their impressive library of shows that suit their mindset, is putting its best foot forward in cashing in on the trend and building a business for the future. Sony Pictures Network-owned SonyLiv, which entered into a multi-year content deal with American entertainment company Lionsgate recently, has tapped the heartland of the country with over 85 web-originals spread across various Indian regional languages. It pioneered at addressing the need for regional language content on web by launching India’s first ever Marathi web series to cater to the Marathi milieu, early in 2017.
Similarly, Viacom18-backed Voot, Zee5 from the Zee Entertainment Enterprises, Sun NXT from south Indian language broadcasting power player Sun Networks, and Southeast Asian player Viu are leveraging the trend with their content in different categories.
Content is the King
Amid shrinking size of screens that’s in no way a measure of the size of the entertainment, content has emerged as the undisputed king not just in a proverbial sense, but even in terms of what clicked with the audience. “Since the audience is becoming increasingly diverse, storytellers have the option to explore narratives that resonate at a hyper-local level, yet, can be appreciated by a global audience as well,” said Siddhartha Roy, COO, Hungama Digital, in a recent report.
The success of Sacred Games, Ghoul, Breathe, Mirzapur, Selection Day, Lust Stories and Love Per Square Foot – to name a few – in recent times shows how audiences today have the liking for new concepts. According to Manish Aggarwal, Business Head, Zee5 India, the digital viewers today are seeking fresh, edgy, relatable and engaging content, which is changing the landscape of the content being produced.
ALTBalaji has about 3.3 million subscribers and a roster of around 30 originals apart from hundreds of hours of acquired content, whereas Hoichoi currently has 1400 hours of content which includes 500 plus Bengali movies, 1,000 plus songs, 22 original shows, six original films and 20 shorts. Experts believe the hyper-local and regional content with a new-age storyline holds a great potential that will help create a platform for brands to create and integrate unique concepts and influence audience.
While the digital medium has opened doors towards creative freedom and eliminated the gate-keepers, the clamour for censorship from different quarters including the government has scared the video-streaming players. They fear it will hamper their business badly. Hence, in a bid to prevent potential government censorship, leading Online Curated Content Providers including Netflix, Hotstar, Voot, Arre, SonyLiv and ALT Balaji have come together with a self-regulatory code to regulate video streaming content. While this code will enable the providers to self regulate and give viewers an option for redressal, it will also ensure that the creative freedom is protected and outside regulation is avoided. The providers will also classify their content into separate and distinct categories according to the age groups. The code establishes guiding principles for the OTT players to conduct themselves in a responsible and transparent manner and at the same time ensures that consumer interests are protected.
Doordarshan, Paytm plan to foray into OTT space
Public broadcaster Doordarshan and digital payments firm Paytm are reportedly working on plans to launch their own OTT platforms, as the consumption of entertainment and infotainment has witnessed a rise in the country.
Supriya Sahu, Director General, Doordarshan, recently said in a report, “OTT is an important platform. Doordarshan is also planning to have its own digital platform where it can put out its content which can be available worldwide. CEOs of Prasar Bharati and Doordarshan are working on a project to evolve an online platform for the viewers.”
“We have a huge library of content. Some of our content is iconic. People of India associate themselves with our shows as they have grown up watching such shows. So we are trying to see if that kind of platform can be developed for us to utilise it,” she added.
Interestingly, Sahu’s comment comes amidst news that Doordarshan is in talks with other OTT platforms to take its content to a larger audience. Launched in 1959, Doordarshan is known for creating iconic shows like Hum Log, Buniyaad, Fauji, Bharat Ek Khoj, Byomkesh Bakshi, Dekh Bhai Dekh, Malgudi Days, Chandrakanta and Shrimaan Shrimati.
On the other hand, Paytm is entering the OTT landscape with video partnerships. This will be the wallet company’s second attempt at content after it launched short videos on its app and formed OTT partnerships with channels like SonyLiv, short videos from FunkYou and YuppTV for news updates.
If the reports are to be believed, Paytm has started hiring a team to set in place content partnerships.
The Paytm’s strategy is said to be similar to that being pursued by Amazon through its content offering – Amazon Prime Video which is bundled with the Prime subscription with advantages like early and free delivery, access to music and video, among others.
E-commerce major Flipkart is also said to be launching its content platform, for which it was initially looking to acquire Hotstar.