Entertainment, entertainment, entertainment. This is the most cherished word in India where folklore is passed on from generation to generation, new films are released every Friday and hundreds of channels dawn on our television sets. At 17.5 crore TV households (as per KPMG-FICCI Indian Media and Entertainment Industry report 2016), the medium is growing at bullet speed. However, digital — which has picked up momentum recently, has left everyone dumbstruck.
In 2000s, webisodes or web series took the West by storm. The concept took a while to gain traction here at home, starting with music channels like MTV and Channel V experimenting with digital platforms to reach their TG who were changing their viewing habits.
There are two kinds of content consumer buckets in India — first, high value-low volume, which are already subscribed to a handful of OTT players. This includes long-format content translated to digital directly from the theatrical or a TV show. The other bucket includes loyalists, who flock to artist pages on the release day of a video. This market is primarily driven through mobile consumption and involves short-to-medium format, snackable content.
Though most digital platforms replicate what is already on television, many are now focusing and investing in original content. In search of newer stories, the platforms are partnering with numerous production houses to offer something different to their audiences who are young and more exposed to the online world. Seen as disruptors, video-on-demand (VoD) and over-the-top (OTT) services have changed the storytelling game. What’s really in it for content creators? Connecting through stories.
OTT- A new name of entertainment
Over-the-Top (OTT) video viewing is a digital wave transforming the way we consume video in India. Television is viewed almost everywhere, on-demand, on-the-go, across devices and geographies, owing to burgeoning OTT platforms coupled with rapidly increasing Internet services. With increasing bandwidth capacity and falling prices, telecom operators are engaged in price wars to offer the best bundles for voluminous media consumption. The growth in smartphone penetration and improvement in Internet speeds is disrupting television screening as we know it, evolving into a multi-screen, time-shifted, mobile environment, with viewers deeming their smart device as their primary source of media and entertainment. The OTT video market in India is bustling with competition as leading operators Hotstar, dittoTV, Jio TV, Amazon Prime Video, Netflix, ErosNow, and YuppTV battle to penetrate this lucrative market. According to Frost & Sullivan, there were 70 million unique video viewers in India (2016) with 1.3 million paid subscribers. Currently, there are at least 80 million unique connected-video viewers, with at least 1.75 million OTT paid-video subscribers. With a high growth rate of almost 30 percent, this number is rising rapidly with the recent unveiling of Jio’s services.
OTT platforms offer linear and exclusive content at prices varying from 5/day to 20/month (dittoTV), and up to 650/month (Netflix). The short-term and base packages cater to the need of every viewer and ensure a comprehensive reach to the platform as they try to penetrate through rural and underserved audiences. Pay-per-view is another option to gain access to a particular title without opting for a bigger package. This makes economic sense to television viewers across the demography to choose their content and pay only for the preferred videos consumed, instead of being coerced into subscribing to bulk packages on DTH and satellite television in which majority of channels remain unwatched. This segmented, personalized, niche offering is what makes the OTT platform unique, posing a strong contention to linear television. However, subscriptions are fragmented and fluctuate dramatically every month as subscribers tend to try a service for a month and either migrate to another service or discontinue for lack of preferred content. As the market is still emerging, it is a long way until subscription revenues become the major contributor to the platforms, since the sustenance of most OTT platforms is currently dependent on advertising revenues.
The demise of appointment viewing and lack of patience to view rationed shows have paved the way for binge watching and personal escapism. The need for multi-screen TV viewing is resonating in viewership patterns, dispersed across devices and geographies. Content offered on an OTT platform can either make or break the business. Since content dictates the kind of audiences that subscribe to it, a compelling, constantly updated library is what will keep the consumer hooked, and yearning for more. The offerings include live and catch up TV, recommended videos, multiple device viewing, offline viewing, download options, personalized playlists, ad-free viewing, etc. More platforms are moving away from conventional content and investing in exclusive production of edgy, youth-centric shows and other content for OTT portals to help amass new audiences and pique the interest of target viewers.
There is a huge opportunity for regional content, English premium content from international studios, as well as Hindi staples, which have avid followers across the multi-lingual and culturally diverse nation. The uptake of OTT subscriptions is augmented by the diverse international diaspora that has limited access to their regional and vernacular content. The availability and adoption of data analytics and measurement tools in this digital space has churned out viewership patterns, recommendations, and content requirements. This aids OTT providers to target audiences with the ideal content mix and alter their content repository based on history and analysis of traffic.
The OTT market is riding on the mobile revolution in the country, as 75 percent of videos are consumed on mobile devices. With newer platforms like ALT Balaji and Jio TV foraying into this dynamic market and people exploring connected living, there will be a paradigm shift in the way India watches television. The price-conscious consumer is now willing to pay for high-quality videos and fresh content.
OTT VOD in India
A look at the India startup ecosystem with celebrated unicorns losing their luster makes one see how simple business logic is turned on its head. Discount pricing, deep discounts to shore up customer numbers, and huge ad spends beg the question – “How do they earn profits with such a business model?”
The same irrational exuberance which had engulfed the e-Commerce, food tech and online groceries segments has hit India’s growing and hyper competitive Video on Demand (VOD) industry. Global giants are entering the arena to expand into a potentially lucrative market that is today valued at $1.2 billion in terms of revenue. Production houses and television channels are throwing their hats into the ring to entertain their viewers across multiple devices. Telecom service providers see OTT video to boost data revenue. A host of content aggregators catering to regional audiences and niche players are focusing on live streaming of sports, entertainment and lifestyle events. Some thirty odd players are fighting to win the eyeballs of the Indian consumers.
With India becoming the third largest Internet market, after China and the US, and one of the fastest growing smartphone markets in the world, OTT players have started making a beeline here. Last year, Singapore-based Spuul launched in India – both as an app and on the Web – and it offers Hindi and regional content. “For free movies or serials, the advertisers pay for the reach. If the customer wants ad-free, on-demand experience, he pays,” says Rajiv Vaidya, CEO, Spuul India. The company has recorded 2.5 million app downloads and five lakh subscriptions since its launch.
Other OTT players like ErosNow, BoxTV and BigFlix are also in the race to capture digital audiences. ErosNow has 14 million registered users worldwide of which 10 million are from India. According to reports, US-based Relativity Media and Bollywood television network B4U, backed by steel baron Lakshmi Mittal, have struck a $100 million joint venture to launch “RelaTV”, a digital-streaming tech platform, besides producing films and TV shows.
Then there is YouTube, the largest and the best aggregator of video content, which has several subscription-driven channels with millions of users. One example is Arunabh Kumar’s “TVF Videos” which has over 1.5 million subscribers and 12 flagship shows. Kumar, founder and CEO of TVF Media Labs, a content creation company, took everyone by surprise when he released a Hindi movie online. In February, the 33-year-old, known in the online world for his satirical videos under the brand The Viral Fever (TVF), launched a new portal tvfinboxoffice.com for “qualitatively curated” movies and released Sulemani Keeda on it.
Last year, Pritish Nandy Communications (PNC) Ltd announced Ogle, an online streaming media product that will offer the latest English and Hindi TV shows, movies, music and events in real time. Ogle also plans to offer Indian cinema, regional content and dubbed international content. “We have a new generation that already consumes entertainment differently. Hopefully, they will be the harbingers of change. Ogle will offer them content they want at their convenience – anytime, anywhere and on any device of their choice,” says Pritish Nandy, chairman, PNC. However, the company is yet to work out the subscription model and delivery mechanism.
According to consulting firm PricewaterhouseCoopers (PwC), mobile Internet TV is one of the biggest growth areas in India and a third of smartphone users are watching TV on their devices. Predictably, all the top channels such as Star, Sony and Zee have an online platform now. “The broadcasters have decided that if they are going to be cannibalized they should also utilize the opportunity. Since they have the content, it makes perfect sense to offer it beyond linear television,” says Sridhar Pai, vice-president, Asia Pacific, Dataxis, a global firm that tracks the telecom, TV and media businesses.
When Zee Entertainment Enterprises Ltd (ZEEL), one of the pioneers in satellite television, launched Ditto TV in 2012, it became the first OTT TV distribution platform in the country. “The next big thing in digital is about mobility and truly personalized seamless experiences,” predicts Manoj Padmanabhan, business head, Ditto TV. Currently hosting 21 channels, Ditto TV has partnered for content with other broadcasters such as Multi Screen Media (Sony Entertainment Television), TV Today Network, and the BBC.
The market potential for online content viewing is huge. The emergence of Video on Demand (VOD) service providers has brought an evolution from broadcasting to narrowcasting. Receiving generic content that is mass distributed is the old way. Today, Indian viewers can choose from a diverse catalogue of video content in the genres and languages of their preference and watch it whenever they like.
Strategy for Video-On-Demand
- Regional content: With increased competition between so many videos on demand and Internet streaming apps, regional content that appeals to particular states will be the key to capture user share.
- A business model palatable to Indian taste: The Indian user needs a business model that enables them to accept paid content easily and seamlessly. There are various models in play in the market – that includes freemium, completely paid, online rent etc. The Indian user has multiple personas – the right business model is required, based on the market that the Internet streaming company targets.
- Tie up with payment banks and wallets: Create a seamless mechanism to pay for paid content.
- Partnership with device manufacturers: To promote this concept of television channel apps, the production houses or channels can partner with mobile companies like Micromax, Karbonn, Lava etc. so that the mobiles offer in-built apps on their system. Example – Paytm and Amazon recently partnered with Karbonn mobile and their apps have become the de-facto payment and ecommerce app of the device.
- A design strategy for Tier III towns and rural areas: The real trick in winning the market is to capture the Tier III towns and the rural areas. As the users are not digitally advanced, an assistive model should be used to spread the usage of the app. For example, where the de-facto cable operator provides the video on demand app as a monthly paid subscription.
- Out of the box advertisement integration: Free content platforms will be driven by advertisements sooner or later. Various amazing interactions can be built to encourage the user to view and interact with advertisements.
- A user experience that is seamless, works offline and not cumbersome: Users want easy access to content, irrespective of the availability of networks. In addition, the right interaction design needs to be built in, in order to make the user a loyal user of the content app.
- On demand content on more than one screen: The on-demand content should be available not only on mobile and web but with right integrations these platforms need to make their engagement space on television, car screens and more.
With the implementation of the above strategies along with in-depth research and understanding of the users’ sentiments and needs, these VoD platforms will soon become our favourite mode of entertainment.
Opinion of the industry leaders
For Prasoon Joshi and Ram Madhvani, telling stories comes naturally. Their job as admen lets them tell stories for hundreds of brands year after year. But what gets the duo really excited these days is their next venture — a web series called Bodhidharma: Master of Shaolin. Joshi and Madhvani both wanted to make a film on the subject before signing Amazon Prime Video (on which it will be aired) as a partner. “There are numerous vehicles to tell a story, but digital does come with certain advantages,” says Madhvani of Equinox Features (Ram Madhvani, Prasoon Joshi and Sunil Doshi), who believes that the platform lets them explore their creative bent. “We know that India is moving towards digital and as it penetrates deeper, the audience will no longer be an appointment viewer.”
Selling a four-quadrant (which appeals to all four major demographic ‘quadrants’ of the movie-going audience: male and female, over- and under-25) concept is easier on digital than on television or films. “The stories on OTT have different grammar, characters and visuals. They have more edginess and humour,” says Nikhil Mirchandani, group CEO, Shashi Sumeet Group which has just announced a new series — Untag on VOOT.
Given the advantage of self-regulation, the characters can be more realistic, compelling and relatable on the digital platform. Actor and film director Kabir Sadanand of Frog Unlimited (a production company for films, television, digital content and commercials) is busy chronicling the lives and issues of an urban couple from the woman’s perspective with Married Woman Diaries on SonyLIV.
Sadanand reveals, “We have a shareholding production out of Canada and while developing content for viewers there, we had started with the original form of storytelling and the dipstick results were a slap on our face.” He adds, “The audiences wanted a quick meal served and digested in a short span of time. We changed our narrative to get direct involvement and the results were bang on. New-age India does not like to be directed, they have a voice and they want to hear that online.” Money, not a villain
With the introduction of numerous OTT platforms, each player is trying to understand their version of what works and at the same time establish themselves as a leader of that particular genre. “OTT platforms are looking for those differentiated concepts to attract newer audiences,” asserts Vishal Mull, creative producer of short films at Idea Shop who directed #LoveBytes for SonyLIV.
“Creating content for digital is certainly easier and cheaper than it is to get a film or a TV show greenlit, made, released or broadcast. Because all you really need is a half-decent camera, basic edit software and critically a good idea/unique talent. There is no middleman,” says Ashish Patil, VP, brand partnership and talent management at Y-Films.
The platform also allows for experiment with form, format, stories, genres and talent, both on and behind the screen. However, even with a sizable fan base, content creators are not generating adequate revenue due to bundling of inventory over a range of content. This dilutes monetization of premium content providers. But producers are optimistic. “To read Babu Devakinandan Khatri’s Chandrakanta, people learnt Hindi. Similarly, this will change the viewing habits of people altering the way the market works,” says Prasoon Joshi, CEO, McCann
Mirchandani points out that producers get a margin from the platform as the metric of success on digital are views and subscribers. “Another way to get the money is through sponsorship,” he adds. Online platform budgets compared to the TV and film world are very different. It would be a while but surely a change that would see the OTT platforms at par. The West has shown the way. And though nascent, a definite revolution is brewing in the online space in India.