In recent times, the excitement and enthusiasm for the much-anticipated web series or for the second part of the successful first season of the web-series have been unparalleled. We have seen such excitement grow more during the times of Pandemic (COVID-19). Mirzapur is a classic example of this. After the success of the first part, the much anticipated next season was a success even before it was available on OTT media for viewing. The OTT medium has become one of the sought after modes of entertainment during COVID-19.
What is OTT?
OTT or, Over-The-Top platforms are audio and video hosting platforms, which earlier started as content hosting platforms but eventually branched out to production and short movie releases, feature films, web-series, documentaries, sports, and other entertainment forms.
These platforms run on cutting edge technology and state of the art functioning. These platforms use Artificial Intelligence (AI) to figure out the content which might interest the user (depending on the previous usage or browsing history) and gives out recommendations based on them. These OTT platforms work on Trial or Freemium model, where they generally give some content for free and have a premium subscription for their exclusive content that is not available elsewhere.
History of OTT Platforms in India
The first Indian OTT platform was BigFlix, which was launched by Reliance Entertainment in 2008. OTT gained momentum in Indian in 2013 when Ditto TV (Zee) and Sony Liv were launched.
Disney Hotstar was launched in the year 2015. And it is one of the highest watched OTT platforms in India. As of July 2020, it has more than 300 million active users. Soon after, Netflix began its operations in India in the year 2016 (January). It is one of the most recognized and prominent global OTT segment player. Netflix faces stiff competition in India from players like Amazon Prime, Disney+Hotstar, voot etc.
Market Size of OTT industry in India
There are currently more than 40 OTT service providers in India, which provide streaming services over the Internet. In the Fiscal year 2018, the OTT market in India was estimated at Rs. 2150 crores (nearly 300 million dollars) and its value grew to nearly Rs. 3,500 crores (nearly 500 million dollars) in 2019. And this market is anticipated to grow at a cruising rate in years to follow.
According to a report by E&Y, the number of OTT users in India has exceed 500 million in 2020, thereby making the country the second biggest market after the US. In a recent report published by Boston Consulting Group, titled ‘Entertainment Goes Online’, the Indian OTT market is expected to reach US$ 5 billion by 2023. In India, Disney+Hotstar has the highest number of subscribers, followed by Amazon Prime, Sony Liv, Netflix, and Voot. However, this ranking figure may differ in terms of watch time.
OTT Demographics in India
Here are a few more facts about the OTT platforms in India and their demographics:
Source: India OTT Video Content Market Survey
OTT Platforms Under the purview of Ministry of I&B
On November 9, 2020, the Government of India signed a gazette notification, to bring online films and audio-visual programs, and online news and current affairs content under the ambit of the Ministry of Information and Broadcasting (I&B) headed by Prakash Javadekar. Earlier the content of these platforms was not strictly regulated, as the audience for these platforms was limited in size. But with the growing reach and demand, these platforms have come under the regulatory purview of the GOI. The Government issued a negative list of don’ts for video streaming platforms. The list of prohibited content is as follows:
What does this notification mean for OTT platforms?
With tighter norms and regulations, the OTT platforms will have to be more careful about the kind and quality of content that goes on their platform for public viewing. The OTT platforms might need to apply for the certification and approval of the content they wish to stream.
Post Pandemic scenario of OTT platforms
By far the biggest challenge for the OTT platforms will come when the situation comes back to normal post Pandemic. When the other sources of entertainment like the Movie theatres, live shows, live performances, sports, gymnasium, etc resume, it remains to be seen as to how will the OTT platforms handle that situation. The OTT mediums might lose their charm amongst the viewers. This can be judged from the fact that even though the IPL tournament was scheduled without any audience in the stadium, but the viewership on the TV and other live medium (Disney+Hotstar) was more by 25-30% over the previous years.
The Movie theatres were the first one to close and will be the last one to open due to Pandemic and lockdown. But once the situation gets normal, we could see a revival of this industry. But the surge of something comes at a cost of something else and OTT platforms might be in for a stiff fight from other entertainment modes. It remains to be seen as to how this industry comes out fighting and maintains its place in the world of entertainment.
Future of OTT in India
Assuming the crisis is not going to get over anytime soon, here is a brief outlook on what could be the future of OTT in India:
Market size USD 5 bn by 2023: A Boston Consulting Group report predicts that the OTT content market is at an inflection point in India and is like to reach $ 5 bn in size by 2023. An increase in disposable income, internet penetration to rural markets, and OTT video adoption across demographic segments have been the key drivers of OTT market growth in India. The majority of Indian households have a single TV per household. However, as part of the Digital India plan, the government has been investing in high-speed broadband enterprises to amplify broadband coverage and adoption which is crucial for OTT video success. Therefore, the availability of affordable data has created an alternate medium where consumers, can tap into any content, any time, at any place on a device of their choice as per their convenience. With the necessary infrastructure being put in place it is obvious the sector will grow at this pace.
Rural India is opening a new distribution channel: With increased internet penetration in the rural areas (estimated to be 650 mn by 2023), OTT players are keen on developing regional content to cater to the rural markets. As per Nachiket Pantvaidya, CEO, ALTBalaji and Group COO, Balaji Telefilms, lack of other entertainment options has spurred audiences (mostly from Tier2 & Tier 3 cities) who had not discovered OTT viewing up until the pandemic struck are adapting to these platforms. While most of them are first-time samplers, as the lockdown will still, platform owners are trying to increase customer stickiness by bringing in a variety of content to cater to the increased content viewing appetites. Also, before the pandemic started the top 8 cities in India contributed to 70% of the total audience for Alt Balaji. However, post-April 2020 the scales have turned to 40-60, where 60% of the traffic is from outside the top 8 cities.
Production houses are going digital: Due to the pandemic situation, the average time spent by Indian OTT subscribers has increased from around 20 mins to 50 minutes to 1 hour in current times. While there were only 2 OTT platforms in 2012, now there are approximately 40 platforms catering to subscribers in India. About 49% of India’s youth spend 2-3 hours watching content online. With this rate of consumption, it is obvious that the content pipeline will perish in no time with an audience hungry for more content. To keep up with the growing demand for more content, OTT charm Netflix is planning to spend INR 3000 crore to create content in the Indian context. At the same time, production houses with immense production experience, knowledge about what content consumers prefer are venturing from linear TV to OTT. Many production houses have already made the collection of their content available for platforms like YouTube. Most of them have already started reaching out to other rising OTT platforms of preference in India such as Hotstar, Sony LIV, Hoichoi, Eros Now, and Sun NXT.
OTT subscriptions have become the latest weapons in India’s Telecom war: India’s telecom price war is back after a break and the battle is being fought on freebies. At Rs 6.7 ($0.09) per gigabyte (GB), the average cost of mobile data in India is the cheapest in the world, according to the Worldwide Mobile Data Pricing report for 2020 by UK-based Price comparison firm Cable.co.uk. With the proliferation of smartphones and the availability of internet connectivity at a cheaper rate coupled with extended lockdowns and its repercussions, OTT seems to be the next normal in the world of entertainment. Therefore, telecom carriers are offering incentives such as subscriptions to services from Netflix to Amazon Prime to win customers in a content-hungry market. India’s biggest telecom company by virtue of the number of subscribers, Reliance Jio Infocomm ltd. Has announced a new 399–rupee plan for postpaid users. Besides 75 GB of data, customers get access to Netflix on a mobile device, a one-year subscription to two OTT applications, and access to Jio’s movies and songs. These are some instances to show that the Indian customer is spoilt for choice.
Redefining Sports through OTT: Sports content has traditionally been the largest contributor to the revenues for all Pay-TV services. The disruption of sports broadcasting due to Covid-19 has led to significant erosion of revenue for operators and Pay-TV providers. Yet at a time, when social distancing norms have disrupted live sports, Star & Disney India in the form of Disney+Hotstar VIP have given great joy to a cricket crazy nation. Thanks to this initiative, fans of the Indian Premier League can now join a virtual community that will allow them to enjoy the matches with their friends and fellow cricket aficionados in real-time. To make even more interactive they can share selfies and videos during this year’s Dream11 Indian Premier League.
Sky is the limit
Considering the change in lifestyle, it can only be predicted that OTT has a great future ahead. Changing habit of people will help more viewers to shift from TV set/movie Theater to OTT.
Till then, let’s talk about “Friends – Reunion”
Write down to us your OTT experience and thoughts in comments.
Heli Shah, an MBA graduate is associated with J.Hirani as a Business Analyst. She is fresh soul with humble and optimistic approach who is working in different industries like Manufacturing, Retail, FMCG and Hospitality etc. Flexibility and greediness in learning new things helps her to conquer the challenges coming on her way.
About J.hirani: J.hirani is a Strategic Transformation team which works as a growth partner for different organisations in various industries by providing services like Agile transformation, Scenario mapping, Strategic alignment, Balance scorecard, Digital transformation, Incubating new ventures, Operation excellence and Aligning human capital.
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