Dushyant Kohli , Head Of Growth , NexGtv
The challenge, however, for the players in the market is in establishing differentiation through their content strategy to attract more advertisers, rake in higher revenues and profits, and offer advertisers unique branding and marketing opportunities.
In a country of over a billion people, there are as many entertainment preferences. The advent of digital video content has not only changed what Indians watch, but also how they watch it. The onslaught of digital entertainment options in music and video has pulled people away from their beloved television sets and turned the smartphone into their own personal pocket-sized TV. The arrival of over-the-top video-on-demand services in India has opened a whole new world of opportunities for consumers, content creators, distributors, and advertisers alike.
The sheer size of the Indian market combined with the rise in Internet and smartphone penetration make it one of the most sought-after markets for global players as well. However, it is this very size and diversity in the Indian market that poses certain challenges for incumbent and emerging players and how they leverage their positions to turn them into opportunities.
Breaking the Language Barrier
More platforms continue to burst forth in the digital content domain in a bid to capitalize on the OTT model, however, the focus largely remains on English and Hindi language content. The regional OTT market is growing at about 60–65 percent every month and is expected to contribute at least 35–40 percent to the growth in OTT viewership over the next five years.
Most of the global OTT players who have entered the country are focusing heavily on English and Hindi language content, which opens up the unbridled opportunity for Indian players to tap the demand for regional entertainment. The fact that they are armed with an inherent understanding of the sensibilities and preferences of the vernacular audience makes their stance more promising in the bourgeoning local content market.
To Pay or Not to Pay: Perfecting Monetization Models
Rising digital content consumption in the country over the past two years has resulted in significant growth for digital video advertising. Although digital
video advertising is about only one-fifth of TV advertising, the growth of OTT platforms and the overall digital content market will be driven by a mix of advertising and subscription revenue. However, these platforms must introduce subscription in a smart manner so as to not drive away, but rather offer a certain compelling value to the price-sensitive Indian consumer. Gradually, with the addition of more such premium content, a newer business model with an affordable subscription can be adopted factoring in user behavior, viewership statistics, and likewise.
Moreover, if current ad pricing trends prevail in the future as well, revenues from advertising can grow substantially for Indian OTT players. The challenge, however, for the players in the market is in establishing differentiation through their content strategy to attract more advertisers, rake in higher revenues and profits, and offer advertisers unique branding and marketing opportunities. It is here where companies with a strong regional content strategy, streaming a variety of localized, quality original content will have a significant edge over other players who have not tapped this market.
Instead of a purely ad supported model, a hybrid model that combines both advertising and subscription can also be a potential strategy for digital video platforms. This will provide a viable monetization model for premium content viewers while attracting more users for the free-to-view content on the platform. A case in point is nexGTv, India's largest subscription-based video entertainment app, which derives more than 90 percent of its revenue from subscription fees. While branded content has gained significant traction with OTT video, allowing creators to monetize content and offset risks, a subscription-based model will help OTT companies make their business more viable over the long term.