With the advent of media and technology seeing new highs, Indian consumers are no strangers to the emerging trends. The consumers have become aware of the services provided and, therefore, are more conscious about the price they pay for the services offered in the market today. Especially, the growth of the media sector and the shift from televisions and theaters to mobile phones/laptops/other smart screens has opened up a new gateway for operators to generate huge revenues. Most of the viewers have switched from televisions to their smart screens and prefer watching their shows over the Internet for a lesser price than what a general cable/pay-TV connection would cost, and this is exactly where "Over-the-Top" (OTT) bridges the gap, in terms of providing a wide variety of films and TV content over the Internet without requiring viewers to subscribe for a cheaper price.
In a country like India, where the media and entertainment sector is rapidly growing and revenues are expected to exceed USD 17 billion by 2017, the online service market share is not as high as that in the developed countries. Although there are various private players who are trying to gauge the market, but due to the regulatory delays and sad state of the infrastructure, online commerce sector is still in a nascent stage.
According to Akamai 2015 report, India had the slowest average Internet speed in Asia-Pacific of 2.5 Mbps despite which there was a vital increase in the shift of viewing preferences to mobile phones, and demand is expected to rise manifold with the suggested structural and regulatory changes in the mobile data speeds, reduced prices, and heavy investing in the marketing and content department.
With players like Youtube, Hotstar, and Netflix gaining the trust of audience, there has been a lateral shift. TV broadcasters and film producers are leveraging the opportunities provided by the OTT services by shifting their existing content onto the digital platforms by launching their own platforms/channels on the Internet. As a result, online rights are being sold separately from the TV and other commercial rights. Having mentioned the increased viewership, it is important to note that content development and management play a vital role in the increasing success of OTT; otherwise, there would be no gain for the viewer.
Although everything seems to be going in favor of OTT at the moment, it is extremely necessary to spread the mobile networks in all parts of the country to cater to the increasing demand, as OTT is solely dependent on the speed and coverage of the network. Another important factor is safeguarding intellectual property that vests in such content. With the broadcasting industry facing piracy issues, due to the lack of content rules or regulations, the same is expected to multiply with the increasing rate of digitization.
Therefore, it is safe to say that OTT needs to be governed by a separate set of rules and regulations to provide a better experience to the viewers. To generate more revenue, the service providers will have to ensure quality experience, in terms of lesser delays, more clarity in the resolution which in turn is dependent on the speed of the Internet. Telecom Regulatory Authority of India (TRAI) is working on improving the present condition, having taken steps to increase the minimum broadband download speed to 512 kbps from 256 kbps and other plans in the pipeline. With reduced data prices and developments in the 4G services, the competition in the market is set to multiply and OTT is set to emerge, only if all the above issues are catered to.
Assisted by Purvasha Mansharamani (Associate - TMT Law Practice)