Content Streaming Services are Simmering in India
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Times have changed, so have the entertainment consumption patterns of Indian audiences. No longer are they interested in watching family dramas, saas-bahu sagas or cheesy love stories on television. For a millennial without a Hotstar, Netflix or Amazon Prime app in his smartphone is considered passé. In the fast-paced lives, career-oriented youngsters are running behind the trends with no extra time to spare. They need everything on the click, be it food, clothes or entertainment. YouTube which was enjoying a monopoly in the digital space for years took a hit as a plethora of new and convenient platforms paved a way into our daily lives.
The last two years in specific have witnessed a massive transition of video consumption to digital due to cheaper mobile data plans and increasing smartphone sales. A ‘Mobility Report’ by telecommunications provider Ericsson has predicted that the number of smartphones in India will touch 925 million by 2023, which alone signifies the scope for streaming data consumption. India currently has about 300-400 million smartphone users.
According to a recent report by Boston Consulting Group, Indian over-the-top content market is expected to reach $5 million sizes by 2023. The report pointed out various factors that have driven the development including the rising affluence and penetration of data in the rural markets. 48 per cent of India’s Internet users (about 650 million by 2023) are expected to be from rural areas.
Talking about the growth of streaming content in India, 2016, in particular, proved to be a landmark year for the video streaming in India as two of the biggest international players like Netflix and Amazon Prime marked their entry in the country. By the end of the year, India already had 160 million digital video viewers and the figures have only intensified since then. Digital space witnessed an explosion of content with OTT platforms providing all sorts of entertainment on a click.
As per EY report, the digital subscriptions have risen by 50% to INR 3.9 billion ($60 million) in 2017 and are expected to hit Rs 20 billion ($309 million) by 2020. Over 250 million Indians watched videos online in 2017, a growth of 64% over the previous year. This number is expected to double to 500 million by 2020.
Language – A Driver in India
Citizens from a diverse nation like India, where people speak in more than 22 languages apart from English, want to consume content in their first languages itself which is why none of the content drivers currently in India is it the news channels or radio stations are English-backed. In the online spectrum, the largest denominator of mobile videos, YouTube has 250 million monthly active users, out of which only 12 per cent consume English content.
In terms of market domination, after Hindi, video content is most consumed in Tamil, Telugu, Kannada and Gujarati followed by Bangla. Notably, the vernacular content is not only consumed within the country but the audience residing in foreign nations also fondly watches the regional dramas. Manav credited the fact stating, “When I launched my first Bengali show, we saw traction from Bangladesh. That is the power of content. Then we launched our Tamil show, we saw traffic from the Middle East, Singapore and the US because the Tamil-speaking population is spread worldwide.”
Nonetheless, irrespective of language, it is the storytelling which turns up as the sustainable competitive advantage for any medium. For any storyteller, his ability to tell stories is his power and the adaptability and nature of the storytelling, for whichever medium – TV or mobile, is the strength.
Television vs OTT
Over the top services does not work like the traditional television or films. From the perspective of production, speed, quality and content, video consumption on mobile is massively different from that on TV. “India has traditionally either made 3-hour movies or 200-episode shows but OTT thrives on about 10 episodes of 20 minutes for more statable consumption. Moreover, a certain needs to be maintained as the person consuming the episode on mobile is incurring data and would like to watch fast-paced stories instead of the slow ones,” former ALT Balaji Chief Marketing Officer, Manav Sethi said.
The key difference between TV and mobile is that TV is built for a family audience which people can enjoy with their loved ones in their drawing area whereas OTTs are preferred for individual consumption. However, Monika Shergill, the Executive Vice President & Head of Content at Viacom18 Digital Ventures believes that there is an overlap between television and OTT audience as the same people watching TV are also consuming streaming content. Total TV viewing population is around 200 million and total payable connections are about 168 million but we have 1.2 billion mobile firms.
For Netflix, content investment in India has scaled at a very fast pace. “In fact, it’s been the fastest investment we have ever made in any country since we launched when compared to our journey in other countries. This really reflects the richness of content creators we can draw on - the best of Indian storytellers to create high-quality original series and movies,” said Netflix spokesperson.
OTT players feed of either the originals they produce, which takes a whole lot of time, dedication, structure and investment, and the acquired content to enhance their library. Among the major Indian VOD players, Hotstar tops the list of most of the average monthly users and the achievement can be credited to their move of investing in sports. As Star India acquired rights to live stream the eleventh season of Indian Premier League on Hotstar, it became the strongest attraction for India’s cricket-loving audience. In the initial days, the platform was more inclined towards acquiring the rights for international shows, a period which witnessed the uncensored version of the Game of Throne coming to India.
For ALT Balaji, things worked differently because of Ekta Kapoor’s deep-rooted consumer insights. Balaji traditionally has been a production house with the big dream of launching a channel which is a long-term process in comparison to launching an OTT platform. “When we launched the platform, we were clear that these are going to be short-term stories and not 100-episodic series and a typical episode would be about 20-22 minutes each due to it being content consumed on move. For digital, the content has to be fast-paced, it can’t be slow,” added Sethi.
Many new yet old players are now ready to explore the world of streaming content. Having the legacy of film distribution since 1977, Eros had launched its OTT platform back in 2012 but had recently started producing the original content. Eros Digital’s Chief Operating Officer, Ali Hussein believes that technology has played a key role in the massive consumption of streaming content in India today. In terms of strength, the network has a huge library of movies, Bollywood and regional making up the largest share of movie content catalogue existing in the country. Having had the time and experience, Eros understands the user experiences and behaviour patterns of Indian audiences that help them in customizing the product as her consumer demand.
“Eros doesn’t believe in having the 100s and 1000s of hours of content just for maintaining a catalogue but developing content that is close to the narrative. In a creative business, it is a long distance from pitch to the final output and we ensure that the final output is as close to the narrative as possible, which enhances the quality of the product,” Hussein said. Regardless of the platform, online video consumption is increasing which benefits all brands in the play. Essentially, expanding the elasticity of video on demand is the focus for the benefit of the entire system. There’s a distance to be travelled before Originals becomes a core differentiating strategy for any one brand.
Amid the debate of valued content, remains the fact that Indians still hesitate to pay for entertainment services but Ali emphasizes that they would be happy to pay Rs 400-500 a month to a combination of players instead of a cable operator if their appetite for value content is fed. Another player ready to dive into the world of streaming is MX player, largely recognized as a popular media player for android. It was recently acquired by Indian media giant Times Internet Limited (TIL) for $200 million. Post the takeover, Times plans to take advantage of the player’s huge market presence considering it has 17 million daily active users and transform it into a video streaming platform. With the aim to create experiences relevant to all kinds of audiences, “MX is acquiring a large amount of content that is relevant to our user base and investing to produce a whole range of original content across comedy, drama, reality, thriller, game shows etc,” unveiled MX Player CEO, Karan Bedi.
Competition at Peak
The influx of international players like Netflix and Amazon Prime in the Indian markets has raised the bar for homegrown OTT players, both in terms of quality content and pricing strategy. While advertising is one route to gain profits in the space, niche audience prefers premium video services without interruption even if it comes at a higher price. Looking at the graph, Netflix’s basic plan offers services at Rs 500 per month, followed by the other pricey models.
The recent years have broken the notion that India doesn’t pay for quality content. Earlier people didn’t have the ability and reason to pay despite wanting to, moreover, the content available on one platform, in reference to music and movies, was available on other platforms too free of cost but the premium content which is available on the paid OTT platform is not available on other places today and these players are spending a huge chunk of their profits to ensure no piracy. In case of exclusive and ad-free content, platforms like ALT Balaji, Netflix, Eros Now and Amazon Prime are promising a perfect consumption opportunity to the viewers.
Netflix and Amazon entered the Indian markets around the same time and both enjoy a huge viewership all over the globe. However, their subscription models differ immensely. While Netflix takes pride in the content it offers and refuses to bow down to Indians’ demand more than it already has, Amazon offers a more generous and pocket-friendly pricing at Rs 999 for the whole year and the subscription offers the membership of Amazon Prime videos bundled with other Prime services on its e-commerce platform.
Among the homegrown players, Voot, Hotstar, Sony LIV and Zee5 have been enjoying a leverage over others due to their broadcast background. “Personalization and diversification are two important aspects of digital media that is targeting a certain setthe of audience and catering to their content needs while tailor-making the shows as per diversified categories. Digital audience is looking for disruptive storytelling and is ready to experiment,” Shergill said.
In India, Netflix is addressing consumers with a great passion for diverse entertainment, offering them everything from global original series to mainstream, star-driven Indian films that have wide appeal. “We believe that the competitive environment means that people will have a lot of choices, which is good for the market and good for customers. We’re staying focused on creating great content and a great product experience, which we hope will delight fans of movies and TV shows throughout India,” said Netflix spokesperson.
All OTT platforms are locking horns to provide better personalization and a better streaming experience to their audience, the quality of their catalogue makes the end difference. The audience craves for great content, irrespective of its price and language.
This article was first published in the November 2018 issue of Entrepreneur Magazine. To subscribe, click here