OTT Platform Growth Driven By Fantastic Content and Cheap Data
The explosion in online video consumption has led to as many as 30 OTT apps being launched in India in the last few years. ET recently stated that the OTT market in India is worth USD 280 million, with nearly a 100 million subscribers. Top players, Netflix, Voot, Hotstar and Amazon Prime are all between one to three years old in India. All three have a sizeable audience, even Amazon Prime which was the last entrant in the streaming race. In saying this, Hotstar and Amazon Prime especially are catering to the Indian consumer in a way we’ve never seen before.
To consolidate their position, these brands are now focusing not just on content acquisition (with Amazon Prime inking deals with Excel Entertainent and Dharma Productions for streaming rights to their films), but also on content production. Indeed, Hotstar was among the first home-grown Indian platforms to launch their own original content with Hotstar Originals. Hotstar Originals saw an interesting mix of Hindi and English content, the most prominent of which was ‘On Air with AIB’. Amazon Prime has gone a step further and signed over a dozen stand-up comics to produce original content for multiple special segments. Netflix also tapped into this phenomenon by launching special shows with comedians Aditi Mittal and Vir Das.
Netflix has always focused on highlighting its fabulous, unending repository of global content, with shows like Narcos, Black Mirror and House of Cards already enjoying immense popularity with Indian audiences. Speaking of Indian audiences, Netflix is also soon launching the Anurag Kashyap directed Sacred Games, starring Saif Ali Khan. Clearly, these OTT platforms are going all guns blazing with respect to dominating the OTT space. From a business perspective, freemium is the emerging OTT business model in India, with players monetizing legacy library content through advertising and premium, ad-free content by way of subscription. While Netflix and Amazon Prime are entirely premium with subscribers paying for content minus any ads, Hotstar monetises its platform through the freemium model - making money from ads on free content and inviting audiences to subscribe to its premium content (new TV shows and movies).
With the rising popularity of web series and the all-important game-changer – the IPL broadcast rights; it will be interesting to see how this ‘quality focussed’ approach will fare for OTT players. By making its entire content available based on subscriptions, Netflix seems to be aiming for the premium audience, with its monthly subscription fee also being priced at a premium as compared to Hotstar.
Regardless of premium or freemium models though, the OTT train isn’t going to derail any time in the near future, due to the sheer affordability of data. With the introduction of Jio, other telecom players have been forced to offer their services (data in particular) at cheaper prices. With data being freely available, smartphone viewing is at peak popularity today. Though the noise around OTT platforms is unlikely to die down in the near future, it will be interesting to see how these platforms sustain and grow their audiences in the future. The ability to retain and grow the subscriber base will be an important measure for the long-term success of these platforms – and the quality of content delivered to audiences will continue to be a key driver of this success.