Ad-driven slates are a strong focus for OTT platforms as initial efforts pay off

The first set of AVoD (advertising video-on-demand) offerings launched by primarily SVoD (subscription video-on-demand) OTT platforms, part of initial bullish efforts, are yielding positive results, with the strategy set to remain a key focus area in the quest for profitability at low costs.

While Amazon has a separate free video-on-demand service called miniTV that is launching young adult shows at regular intervals, Disney+ Hotstar made Asia Cup 2023, the ICC Men’s Cricket World 2023 and the ICC Men’s T20 World Cup 2024 available to watch for free on mobile phones. A new show called Gunaah that released in June was also free for mobile users and another title Commander Karan Saxena, is slated for early July.

Entertainment industry experts say original AVoD shows can be three to four times cheaper as compared to SVoD shows. The former, an emerging category, is also providing opportunities for newer talent and production houses at a time when premium SVoD shows are only being commissioned when mainstream film studios are at the helm of affairs. Platforms are also seeing interest from brands that are often integrated within the show. That said, the challenges of low ad rates threaten to derail plans.

According to Manish Kalra, chief business officer, ZEE5 India, the platform’s free streaming shows have generated impressive returns, both in terms of viewer engagement and advertising revenue. These shows play a vital role in attracting a larger audience to the platform, which, in turn, drives overall growth. “The advertising partnerships and brand integrations associated with these shows contribute significantly to our revenue streams. Additionally, by offering high-quality content for free, we enhance our platform’s value proposition, which can lead to increased subscriber conversions over time,” he added. ZEE5 has launched AVoD titles such as Ardh, Kaam Chalu Hai, Am I Next, House of Lies and Country Mafia, among others, which follow strategies of well-defined episode lengths and efficient production processes. “Despite these optimized methods, advertiser interest remains robust. Brands are particularly attracted to the wide and diverse audience that these shows reach, and we see strong engagement from advertisers keen on seamless product integration within our content,” he said.

It makes sense for any platform to be with consumers through the entire journey of AVoD to SVoD, agreed Saurabh Srivastava, chief operating officer, digital business at Shemaroo Entertainment Ltd. At the industry level, both models are sound and thus co-exist.

Entertainment industry experts say advertising is necessary for OTT platforms which can no longer rely on paid subscriptions in a price-sensitive market like India. It helps that video is a fast growing segment and most of these platforms already come with some brand value, so free content only helps reach out to audiences in tier-two and three towns better. The challenge is how to put out content at lower cost but well-tailored for young audiences and also those used to GEC (general entertainment channel) content, despite the low CPMs, Soumya Mukherjee, chief operating officer of Bengali streaming service hoichoi, said. CPM is cost per mille, or cost per thousand impressions, which is the average cost of one thousand ad impressions. The platform is looking at making announcements on the AVoD front later in the year.

Low-quality free content jeopardizes the conversion to paid users, which is the main focus for any platform, said Ujjwal Mahajan, co-founder Chaupal, a platform specializing in Punjabi, Haryanvi and Bhojpuri content. Customers won’t resist criticizing content just because it was free. “We do look at brand integrations, especially for our free episodes,” he added. Since the number of users who view this is much higher than the paid episodes, brands get very good and organic visibility. “We have to make an extra effort to ensure that the integration seems natural,” Mahajan said. MSN