Streaming on Demand: Otts Disrupt the Traditional Cable TV Market Sales & Marketing, March 22, 2019
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Streaming on Demand: OTTs disrupt the traditional cable TV market Sales & Marketing, March 22, 2019 The digitisation environment in India has undergone a transformation with the decline in data charges and introduction of sachet pricing for content unleashing a broadband revolution. This has led to an increase in smartphone, tablet and smart TV penetration, as well as the number of people consuming digital content. In 2021, mobile data traffic is expected to reach 5.5 exabytes per month, at a compound annual growth rate of 40 per cent, and video is likely to contribute to 75 per cent of this. At present, India has an online video audience of 350 million, which is expected to reach 500 million by the end of 2020. Accounting for 75 per cent of the new video audience, rural India is expected to drive the growth of the digital segment. With increased smartphone penetration in rural areas, regional over-the-top (OTT) content is likely to attract greater investment. Further, the revenue from regional content is expected to increase from Rs 9.2 billion in 2017-18 to Rs 12.5 billion in 2018-19. Several content producers have been able to generate revenue through minimum guarantee and revenue share arrangements. However, the amount of revenue generated depends on several factors, such as first window or second window, exclusivity of content on platforms, and the period for which rights have been acquired. In certain cases, OTT players and content creators have signed fixed-value contracts or arrangements, which has allowed creators to produce high quality content with negligible or no risk. In recent years, numerous OTT players have entered the market and, therefore, content is available at competitive prices. This is likely to result in a wider and more engaged online audience in 2019. An increasing number of movies are being produced exclusively for OTT platforms. OTT: Additive technology for the TV industry New technologies could grow in two ways – additive (where they coexist with older systems) and disruptive (where they replace older systems or the consumer base leapfrogs older systems entirely). The print industry in India is an example of the additive role of new technology (digital versus physical), while the telecom industry is an example of the disruptive role of new technology (mobile versus fixed line). OTT will create an additive impact on the TV industry in India, at least in the medium term. Low ARPUs for traditional TV in India, at about $3, suggest an additive response to OTT. Also, TV viewing is often a family affair in India. While smart TVs or devices such as Chromecast or Fire Stick could potentially address this need, a 1 / 3 Streaming on Demand: OTTs disrupt the traditional cable TV market Sales & Marketing, March 22, 2019 smartphone cannot. Even though linear TV has fewer features to offer than OTT, especially around flexibility, users may still prefer linear TV for a few experiences, such as sports. OTT-cinema coexistence In contrast to traditional TV, OTT platforms are likely to witness an increase in revenue as they are expected to become the preferred medium for audiences to consume entertainment content. Online platforms have opened up new revenue streams for production houses struggling with declining satellite rights. OTT has the potential to disrupt the economics of the TV and film value chain, helping them capture a share of the viewers’ spend that currently eludes them. Hindi cinema has recorded significant viewership on OTT platforms. However, given that the box office accounts for 67 per cent of the movie industry’s revenue, single screens and multiplexes are expected to remain relevant. Convergence and scale Convergence and scale are emerging as important elements of the Indian TV landscape. To this end, there have been several consolidations, acquisitions, as well as instances of organic growth. Reliance Industries is a key example of the convergence trend with its spread of operations across mobile (Reliance Jio), broadband (JioGigaFiber, and stakes in Den and Hathway), content production (own content production plans, as well as stakes in Eros and Balaji), traditional TV broadcasting (stake in Viacom 18), traditional cable and satellite broadcasting (stakes in Den and Hathway), video OTT (Jio’s own services, as well as stakes in Eros Now, ALTBalaji and Voot), audio OTT (Jio’s services and recent acquisition of Saavn), and devices (Jio Lyf smartphones, Jio Phone and JioFi router). There are several other global and Indian examples of convergence such as Amazon entering the video distribution segment with Prime Video, followed by production (Prime Originals) and devices (Fire Stick and Echo). Meanwhile, Paytm has announced its plans to launch an OTT video platform. Conclusion 2 / 3 Streaming on Demand: OTTs disrupt the traditional cable TV market Sales & Marketing, March 22, 2019 OTT services have been making deeper inroads into the Indian market. There is near consensus that the OTT video market will continue to grow rapidly during 2019. This is reflected in the level of competition in the market. Over 30 OTT video offerings are currently available and more players are expected to enter the fray. The online video audience in India is expected to double in the next three years. Several large players have entered the Indian OTT market and allocated sizeable budgets for creating exclusive content. This, along with the sheer number of OTT players, has provided content creators with new funding sources, access to a niche and specific audience, and global reach. Quality producers and artists will especially benefit from this competition as several platforms vie for their content and skill sets. For traditional broadcasters, OTT provides a monetisation opportunity for delivering catch-up content. Overall, the launch of OTT has created a parallel ecosystem, raising both the quality and quantity of the content pool. While India already has a long history of creating large volumes of content, the demand for content is likely to rise exponentially. The industry will have to step up infrastructure creation and develop a talent pool to generate content. About Us We are Hiring Contact Us Subscribe Privacy Policy Advertise Terms & Conditions Copyright © 2010, tele.net.in All Rights Reserved 3 / 3 .