OTT firms rationalize costs, chase profits in tough market

Video-streaming platforms have reduced marketing budgets by up to 40% over the past year, and rationalized content costs, as they shift their focus to profitability in a cut-throat market where producers are vying to grab a fickle audience’s attention, industry experts said.

These platforms have eliminated mega outdoor advertising initiatives, and cut down on multiple appearances by the lead cast. Instead, digital has taken centre stage, along with influencer marketing.

“Our approach is to determine outcomes expected from each title based on data and analytics that we have, and accordingly plan our spends. Depending on target audience, we select mediums. We have been prudent in our spends in 2023. However, we are making sure that the right content gets its due from a marketing standpoint, whether it’s a film or show,” Rajshekar Baddam, head of marketing at aha, an OTT platform that programmes in Telugu and Tamil languages, said.

Given that the attention span of the audience is limited and availability of content across multiple OTTs is huge, making an impact with marketing is critical, for which aha is opting for strong and viral campaigns on social media, engaging with influencers to spread the word and resorting to meme-marketing during the pre-launch phase of titles, Baddam said. Publicity around how the show is faring comes post-launch where TV mediums are also used to drive sales.

Sourjya Mohanty, chief operating officer of EPIC ON, the OTT platform owned by IN10 Media Network, said all services have realized that while basic outreach is important, it is ultimately the library you build that speaks for itself. “Marketing cannot help retain users if the content isn’t great. That is why nobody is going out of their way, it’s all about minimalism now,” Mohanty said. The current marketing strategies range from personalized campaigns that resonate with specific audiences and deliver higher engagement rates, to leveraging geolocation to offer relevant content to the audiences, according to Sahil Chopra, founder CEO of digital marketing firm iCubesWire.

“Despite economic constraints, platforms are adapting to strategic tactics such as targeting loyal fans, emphasizing value, and adjusting budgets nimbly. Marketing strategies are shifting, too, with an emphasis on cost-effective tactics like content marketing, social media engagement, and data-driven targeting,” said Mitesh Kothari, co-founder and chief creative officer of digital agency White Rivers Media.

To be sure, there was a visible surge in shows and movies on OTT platforms during the pandemic, when people were confined to their homes. But with the pandemic having ebbed and market situation having stabilized, profitability expectations have increased. This renewed quest for profits has prompted streaming firms rationalize marketing spends. Thus, marketing budgets have either dipped or in case of bigger titles, stayed the same, according to entertainment industry experts.

“Many OTTs had to prioritize their top titles for extensive marketing efforts, while being more cautious and doubling down on other titles only if they showed a significant performance in the initial launch week with minimal promotional activities. With limited budgets and multiple titles, it isn’t feasible to spread the budgets evenly across all titles for a big impact. Therefore, the type of title and the cast’s relevance help decide which project to put money on for maximum impact with minimum investment,” Aakash Goplani, account director at digital agency SoCheers, said. LiveMint