Regional OTT content: Spreading the net

ZEE5 expects the Telugu market to drive 20-25% of its subscriptions

The OTT market accounts for 7-9% of India’s media and entertainment business
The OTT market accounts for 7-9% of India’s media and entertainment business

Digital streaming platform ZEE5 is ramping up its content library for the Telugu speaking market, with plans to release 11 original web series in FY23. The platform’s move comes on the back of its announcement to triple its investments in Tamil and Telugu content during FY23, underscoring the importance of the Southern markets for OTT (over-the-top) players. “There is a huge appetite for content in this region. Besides the 11 web series, we have 8-10 Telugu movie releases lined up for this year,” says Manish Kalra, chief business officer, ZEE5, adding that 20-25% of its subscriptions are likely to come from this market.

Looking beyond Hindi

The OTT market accounts for 7-9% of India’s media and entertainment business, and is set to reach $13-15 billion over the next decade at a CAGR of over 20%. Chandrashekhar Mantha, partner, Deloitte India, observes that the country is witnessing a boom in regional content and the share of regional language consumption on OTT platforms is expected to cross 50% by 2025 from 30% held in 2019, easing past Hindi at 45%. “The growth will be supported by investments in original content, pricing innovations, low data cost and the rise of short form content,” he explains.

Kalra points out that 50% of ZEE5’s viewers are from non-Hindi markets, largely dominated by the South. “We have been able to move faster and bring in more viewers from non-Hindi speaking markets. As per industry reports, 30% of the OTT consumption is from non-Hindi markets, which means that when it comes to regional language consumption, we are ahead of the industry average,” states Kalra. ZEE5 also acquired the digital streaming rights for the Telugu blockbuster RRR in four languages and is seeing a very good response from viewers. It also plans to invest in Kannada and Bangla content by next year.

High investment phase

Over 50% of ZEE5’s advertiser video on demand (AVOD) model viewers are from tier-II and III cities and smaller markets. Its premium content is skewed in favour of the top 30-35 cities, says Kalra. The platform’s premium annual membership is currently available at a promotional cost of 599, down from999. “Profitability could perhaps be three to five years away. Right now, the plan is to invest in good content and acquire more customers,” he explains. The platform’s FY22 revenue stood at 549.6 crore, up 31% from419.1 crore in FY21.

For OTT platforms, revenue growth is a function of how well they monetise their content. “India has never been a market for high subscription revenues, so OTT players have to find better ways to grow advertising revenue. This will mean ensuring their audiences stay engaged, while doing everything they can to demonstrate effectiveness to advertisers, thereby commanding a premium for their ad inventory,” observes Kavita Shenoy, founder & CEO of Voiro, an ad-tech company.

To that end, ZEE5 last year introduced its Intelligence Monitor, a property that enables customised advertising solutions. Since then, more advertisers from sectors like FMCG, which are known to park most of their ad bucks in television, have come on board, notes Kalra.

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