Aafia Bathool, Research Analyst-Digital Transformation Practice (ICT), Frost & Sullivan.
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. This is achieved by an amalgamation of ecosystem participants and strategic alliances for co-creation of content for specific age groups, seasons, and events. Sports events like IPL are simulcasted (simultaneously telecasted) on OTT platforms, catering to a global fan following, raking in high viewership and providing alternative screening avenues. 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. International operations of local platforms witness higher subscriptions as there is a clear gap in the regional content provided by their local providers. 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. The onus is on the OTT providers to deliver and meet the requirements of an evolving audience. Although OTT services may not eliminate traditional TV in the near future, the growing patronage is a testament to revamp the television industry.