1. OTT: We are just getting started!

OTT: We are just getting started!

The ubiquitous smartphone streaming content of our choice is something we take for granted today. But turn back the clock just a few years and you will find that the story was very different.

Published: October 24, 2017 5:15 AM
Smartphone, SD cards The ubiquitous smartphone streaming content of our choice is something we take for granted today. But turn back the clock just a few years and you will find that the story was very different.(Representative Image: Reuters)

– Gaurav Gandhi

The ubiquitous smartphone streaming content of our choice is something we take for granted today. But turn back the clock just a few years and you will find that the story was very different. Data was expensive,  connectivity was patchy and most content viewed on phones was largely side-loaded (on micro SD cards). However, one thing was striking even then — viewer behaviour was changing fast. There was a pent-up demand to watch content on personal screens but barriers prevented mass consumption (and thus, monetisation for content owners).

Today, millions of users in India are tethered to their personal phones. With close to 200 million users streaming video on their smartphones, the digital streaming industry has finally found a place of its own in the Indian market. With over 20 players in the video streaming business (at least a dozen well-funded strategic players), thousands of hours of premium content being made available (including live sports, movies, TV shows, originals and kids) to everyone — most of the times on an ad-supported model and amidst an ultra-competitive telecom landscape which is driving data prices down, this industry has emerged as the fastest growing in the consumer internet space in the recent times.

When it all began

In the beginning, there was just YouTube. Most content owners dipped their toes in the market by licensing content to YouTube and they all watched their content’s reach grow sharply. Given that a majority of the premium video content in this country is owned by seven-eight media companies, the rapidly changing consumer behaviour and digital landscape prompted many content owners to start launching their own direct-to-consumer offerings. In 2015, Hotstar launched. In 2016, Viacom18 launched Voot; Netflix and Amazon Prime entered India and Jio changed the telecom landscape forever.

As we near the end of 2017, there are close to 25 streaming services operating in varying business models (ad-supported; freemium; subscription-based; telco services bundled with data; services bundled with retail offerings). Subscription models are beginning to show some traction and Amazon Prime (tethered to its parent’s retail offering) and Netflix both are creating a market here. It’s not just about reach — which is in any case large, it’s also about how intense is  the usage.

Getting future-ready

The future is one where all screens will be connected and India will be a land of a billion unicasts (instead of broadcast). In another five years there would probably be more homes with a streaming device than with TV sets. In an even nearer term of 24-36 months, we are talking about 400 million video streaming users. In 2018, BARC is extending its mandate to measure all video — TV + streaming — to give advertisers a combined view of the landscape — thus helping better monetisation of this huge digital video market. On the content side, massive investments in digital originals and digital-first content will act as an even stronger tailwind for streaming services.

Another big focus area of growth in the near term is going to be regional markets — especially as video streaming goes deeper. The demand for regional entertainment is increasing rapidly and this is evident from the increased focus by all OTT services in enhancing their content offering across languages. Streaming players are preparing for the next level of growth by adopting analytics and data sciences tools to understand the user.

With the Indian consumer now showcasing a voracious appetite for video content streaming, industry measurement for digital video being around the corner (that will aid the advertising side of the business) and some early signs of willingness (and ability) to pay for it also emerging, the picture is looking bright. Of course, since this is a costly business with hyper-competition and with business models still emerging, one is bound to see some consolidation along the way and a few non-strategic players walking away from this. But all in all, these are exciting days to be in the media and content business as we together shape the future of how entertainment will be consumed tomorrow. And we all are just getting started in that journey!

Author is COO — Viacom18 Digital Ventures

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