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Growth of OTT in India: the Covid Factor

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Growth of OTT in India: the Covid Factor E-CineIndia April-June 2020 ISSN: 2582-2500 Article Mausumi Bhattacharyya Growth of OTT in India: The Covid Factor Introduction ing pattern of consumption of products and service offerings. This shift of consumption Greeted with much fanfare and hope, year preference is happening on a gigantic scale 2020 has presented humanity with a challenge and in all likelihood, will have a lasting ef- that is ominous and debilitating. With each fect on the functioning of several industries. passing month, the Covid-19 pandemic has Lockdowns, social distancing and evolving firmed its grip, bringing in its wake unfore- norms of ensuring personal hygiene, as route seen misery, suffering and deaths. Optimism, to protection from corona virus infection, is which marked the start of the year, lies in modifying on an everyday basis the way we complete shambles. With most governments work, relax, think and read (Mallikarjunan imposing national lockdowns and emphasiz- 2020). Taking this line of argument further ing on strict compliance of social distancing Matthew (2020) adds that Covid-19 outbreak norms, to arrest spread of Covid-19, free and has accomplished what advertisement cam- normal movement of millions of citizens has paigns by top-notch brands have often failed been disrupted. Home confinement, physical to. The pandemic has forced consumers, in separation from families, friends and relatives, large numbers, to revise their preferences al- spectra of employment loss or pay cuts and most overnight. Matthew (2020) opines that above all constant anxiety about preventing stimulating change of customer preferences is contacting the disease is the emerging order. never easy. Preferences tend to be inflexible Covid-19 is ushering in several alterations at and therefore remain impenetrable even in the rapid pace and thus laying the norms of a new face of the best marketing campaign messag- normal. es. Yet several such psychological resistances Emphasizing the unprecedented impact the have been dismantled by the pandemic, some- Covid-19 induced pandemic is having on the thing that brands are often left desiring for. lives of millions of citizens, Mallikarjunan Matthew (2020) points out habituated shop- (2020) draws attention to the way its alter- ping mall aficionados, found every establish- Page 1 E-CineIndia April-June 2020 ISSN: 2582-2500 ment closed overnight. Left with no option, top platforms in India during the lockdown they had to quickly adapt to online shopping. period, it is pertinent to access the degree of The same holds true for those who previously potentiality this channel held out in the In- harboured varying degree of anxiety towards dian context prior to onset of the pandemic. online shopping. Matthew (2020) holds that This will aid in precisely comprehending the both groups were compelled, by situation, to quantum of attractiveness escalation that oc- explore the wide spectrum of e-commerce, curred once the threat of Covid-19 firmed its something they had not previously planned grip over the country and led to constituting to. As lockdowns prevailed and online order- of restrictions. ing and delivery service emerged the saviour, Examining the proliferation of OTT platforms many got used to shopping from the comfort in the country, most of which are owned and of their homes and also became proficient in operated by United States based media orga- the e-commerce operations (Matthew 2020). nizations, Fitzgerald (2019) had noted that Such displayed resilience is not restricted to most companies held positive and favour- shopping and shopper attitude only. Menon able views about possible business expan- (2020) states that restrictions imposed in the sion in India. Such optimism was fuelled by wake of Covid-19 pandemic profoundly trans- the rapidly growing internet user base, of the formed media and entertainment consumption country, and also percentage of users of lat- pattern also. As lockdowns prevented people est gadgets and technological advancements. from venturing out, either or leisure or work, Hence on the radar of US based OTT plat- form operating companies, India represented social life increasingly moved to online plat- a lucrative potential. Fitzgerald (2019) admits forms. Social media provided the opportuni- that such companies are well aware of the last ty to stay connected with families, friends, mile infrastructural and technological bottle- colleagues, neighbours and others. With out- necks, which has denied vast stretches of rural of-home channels of entertainment closed India from unhindered internet connectivity. by government order, following of at-home Yet what held out promise was the 460 mil- channels of entertainment displayed steady lion strong internet using population, ranked growth and popularity (Menon 2020). As such just behind China’s 721 million user base. For television viewing rose both in terms of view- the service providing companies, this user ership and viewing time and gaming applica- strength implied presence of a lucrative mar- tions recorded higher number of downloads ket waiting to be explored with meaningful and time spent. With movie theatres closed, and engaging content. To this end Bhushan over-the-top platforms gained popularity and (2016) had earlier indicated that India has the also witnessed a surge in number of viewers capability of becoming a hub for local content and also subscribers (Menon 2020). Specifi- development for the different OTT platforms. cally, over-the-top (OTT) platforms, have sur- Indications of this is prominent from a report faced as a new lifeline not only for entertain- published by KPMG highlighting just about ment seeking viewers but also for producers 0.5% viewership for television programs and directors of different stature. And going which are originally produced for US coun- by reports of experts, this trend is here to stay tries and the Western world. Hollywood pro- (Menon 2020). Building on this perspective, duced films and other foreign titles generate this article specifically delves into how OTT about 10% of box office earnings, with indica- platforms have gained prominence and ca- tions of the contribution percentage going up tered to different segments in these times of in future. In contrast, Indian content attracts about 60% viewership across television and uncertainties. OTT platforms (Bhushan 2016). Hence In- Potential of OTT in India: Pre-Covid 19 dia came to be regarded as the battleground scenario where clash of Amazon and Netflix, over market dominance, will pan out. If the pric- Prior to exploring the evolution of over-the- ing packages offered during introduction of Page 2 E-CineIndia April-June 2020 ISSN: 2582-2500 these OTT services are indications to go by, sumers of OTT content, in 2019 about 14% the battleground analogy may well hold true. new women consumers adopted the medium Amazon launched Amazon Prime Video at (Malvania 2019). When viewed from a gen- introductory pricing of Rs. 499 or $7.50 for der-neutral perspective, the study found that a full year, in an obvious effort to neutralize among new adopters 63% hailed from the 45 Netflix’s basic monthly subscription charges years to 54 years age group with another 18% of Rs. 500. To lure viewers both offered 30 belonging to the 35 years to 44 years group. days of free trial, Amazon taking it a step fur- This was interpreted by researchers as indica- ther by extending free subscription offers for tion of growing acceptance of the subscription its Prime Shopping Service members (Bhu- model, clarified by the growth of consumer shan 2016). Other OTT platforms also adjust- base across different age groups. Since wom- ed their subscription rates accordingly with en and those hailing from lower social strata ErosNow charging between 75 cents to $1.50 were found to be fast embracing OTT stream- every month and Hotstar making its premium ing, it was concluded that the once niche me- service available at $3 per month. This differ- dium was transforming into one for the masses ential pricing pattern indicates to market po- (Malvania 2019). Focus of service providers tentiality which companies are eager to con- on diversified local content, thereby offering solidate on (Bhushan 2016). subscribers a wider choice, was making a dif- ference and altering the practice of prime-time Yet observers point out availability of local television viewing. Pointing to lowering cost content and its generation holds the key to of data and smartphones in India, the report market superiority. It is considered to be the observed that these have aided growth of au- differentiating factor between OTT platforms dience segment C by 17%, audience segment and determines which viewers subscribe to D and E by 13% while segment B showed in greater numbers (Bhushan 2016). Hence growth by only 4% (Malvania 2019). In oth- Netflix roped in Anurag Kashyap’s Phantom er words, members of categories not typically Films to put together its first indigenous con- perceived as lucrative are strongly fuelling the tent Sacred Games, and Amazon also signing proliferation of OTT services in India. him for Stardust and The Family Man. The lat- ter also got Excel Films on board to produce According to another report published by The Powerplay, Mirzapur and Made in Heaven. Boston Consulting Group, India’s OTT mar- Amazon has a total of nine shows under pro- ket is pegged to hit $5 billion by 2023 (ET duction and an equal number in other stages Brand Equity 2018). Rising level of affluence, of finalization (Bhushan 2016). While Net- data percolation in the rural areas and high- flix’s streaming package initially consisted er acceptance of the medium among women, of acquired parallel cinema titles, Bollywood middle aged and senior generations were cit- content and regional productions, Amazon ed as prime movers of acceleration (ET Brand focused on getting bigwigs like Dharma Pro- Equity 2018). ductions, T-Series and Vishesh Films to pro- duce content for Prime Video.
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