1. Video OTT vs DTH players: How Netflix, Amazon Prime, Hotstar cornered Indian market

Video OTT vs DTH players: How Netflix, Amazon Prime, Hotstar cornered Indian market

With the entry of video OTT apps like Netflix, Amazon Prime and Hotstar in the last two years, the growth of direct-to-home (DTH) TV active subscribers has slowed down considerably as the former, apart from bringing more of international content, also packs it with the latest domestic content faster than the latter.

By: | New Delhi | Updated: November 27, 2017 5:34 AM
video OTT app, Netflix, amazon prime, hotstar, Trai, DTH service, DTH TV subscription, Deloitte, relinace jio, OTT platforms, dish TV, Vodafone, sonyliv From Hotstar joining hands with Reliance Jio to Netflix exclusively tying up with Vodafone, and SonyLiv partnering with Airtel in the last one year, telecom operators have inked multiple such deals to boost content offering.

With the entry of video OTT apps like Netflix, Amazon Prime and Hotstar in the last two years, the growth of direct-to-home (DTH) TV active subscribers has slowed down considerably as the former, apart from bringing more of international content, also packs it with the latest domestic content faster than the latter. This, coupled with the consumer getting more data at lesser price, courtesy the cut-throat competition among the telecom operators since the coming of Reliance Jio last year in September, has added to the growth of video OTTs via-a-vis DTH. For perspective, according to the April-June 2017 quarter data released by the Telecom Regulatory Authority of India (Trai), the DTH active subscriber base at 65.31 million grew by 7.9% on a year-on-year basis. The same in April-June 2016 had grown by 52%. In contrast, the video OTT user base of 16 players, which stood at 63 million in August 2016 rose to 164 million in August this year, a phenomenal growth of more than 160%. Obviously, the sharp growth in video OTT comes on a low base but nevertheless points to a trend that as data gets cheaper and smartphone and smart TVs penetration grows, video OTTs may begin to be getting preferred more and more by consumers than DTH TV subscription.

“Apart from bundling of services, bundling of service with handsets is another reason behind consumers streaming content online. For example, many of these apps now come pre-embedded in smartphones. Also post Jio’s entry in the market cost of data has gone down tremendously, so people have started streaming content online,” said Jehil Thakkar, partner, Deloitte. For telcos, the logic is simple if you can’t create content, you can surely package it under one roof. From Hotstar joining hands with Reliance Jio to Netflix exclusively tying up with Vodafone, and SonyLiv partnering with Airtel in the last one year, telecom operators have inked multiple such deals to boost content offering. “Partnership with OTT apps has allowed to provide a seamless viewing experience to consumers, who instead of downloading five different video streaming apps, can just opt for one app, in this Airtel TV — to view different content,” said Kartik Sheth, CEO, Wynk.

Moreover, telcos claim that these services are bundled at an affordable range, as a viewer is not required to subscribe to each platform separately, which adds to the cost of streaming. “While the idea is not to provide entertainment apps such as Netflix at discounted rates, one creates a sustainable package which users can easily avail,” said Dipankar Ghoshal, national head, VAS and content, Vodafone India. For instance, Jio prime membership at just Rs 99 allows Jio subscribers to avail full bouquet of its applications, including cloud facilities, news and entertainment apps like JioTV, JioCinema, JioMusic among other utility apps, absolutely free till March 31, 2018. While an Airtel user is required to pay a monthly rental of Rs 499 to avail 20 GB data, add to that access to entertainment apps such as Wynk and Airtel TV, among others. For those subscribers who pay a monthly rental of Rs 999, they can avail 50 GB data along with content apps.

Compared with this, a Vodafone subscriber for a monthly rental of Rs 2,999, gets exclusive access to Netflix content worth Rs 6,000 for a period of 12 months besides being able to view content on other platforms like YuppTV, Alt Balaji, Eros Now, Hooq, YouTube. DTH operators have already begun to feel the pinch. Earlier this year, Jawahar Goel, MD, Dish TV, after the company’s Q1 FY18 earnings call, admitted that DTH operators are feeling a definite peer pressure from OTT platforms forcing them to renegotiate content deal with broadcasters as they try to lower the cost. Also, after Airtel introducing hybrid set-top box (STB), which allow viewers to watch content from Netflix and other such platforms through the STB besides regular TV channels, Dish TV, too, would be launching its own hybrid STBs. “The delivery cost of content on TV is still cheaper compared to an OTT platform, where a user not only has to pay for subscription, but also has to pay for data. On an average viewers require between 1.5-3 GB data if she decides to stream the content on her TV, whereas HD channels are currently available at as low as `186 per month. So, for mass content a viewer will rely on TV, but for premium content she will switch to these app, ” added Goel.

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    Sanjay Jain
    Nov 27, 2017 at 12:17 pm
    #OTT is scoring because of on the go consumption and is not linear. Yet Indians want everything free and the real test of popularity will come when cross subsidisation stops. As of now TV replacement thesis is being funded by equity. Popular content b s whether in News, entertainment, lifestyle will want fair price and that is where real test of #OTT wil come. #Netflix is already facing pressure globally
    Reply
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      Nitin Arora
      Nov 27, 2017 at 3:41 pm
      I agree, as long as the content is available free or subsidized it will continue to attract users. The real test is when monetization of these services takes place. Cannibalizing of linear TV by OTT platforms is far cry as of now
      Reply

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