The entertainment industry is witnessing a ‘streaming war’ as multiple platforms including Netflix, Prime Video, JioCinema, and Disney+ Hotstar, among others, are vying for the top spot. So, distribution plays a key role besides product offering. As a result, OTT platforms like JioCinema, and Amazon Prime Video, among others, have adopted the marketplace model. But the competition remains intense, as telecom players continue to provide bundled offers to viewers. “People in India are extremely price sensitive. We may be a country of roughly 1.5 billion people, but people’s willingness to value and hence pay is very small. Internationally, the bundling model has been working well because you may pay for all subscriptions in one place. There is a similar thing in television packages as well and I believe we’ll see something similar evolve in the OTT space. I think we’ll see telecom companies and digital content companies will at some point in time, be forced to bundle which people can then pick and choose from,” Ashish Golwalkar, a senior media consultant, told BrandWagon Online.
As per a report by EY, approximately 43 million households paid for 97 million video OTT subscriptions in 2023. There was a fall of two million paid video subscriptions in 2023, when compared with 2022 (45 million subscribing households paid for 99 million video OTT subscriptions). Video OTT subscriptions grew by six percent in 2023 to reach Rs 7,260 crore as premium cricket properties transitioned to AVOD (advertising video-on-demand) from SVOD (subscription video-on-demand), reducing the number of paid subscriptions of Disney+Hotstar by approximately 19 million.
‘Add-on’ to the streaming war
The streaming war has gotten intense post-JioCinema slashed its subscription rates for ad-free premium content to Rs 29 a month while the rest of the streaming platforms are charging a premium subscription fee for its content. Netflix at Rs 199, Prime Video at Rs 299 and Disney+Hotstar at Rs 1,499 is a steep ask compared to JioCinema’s Rs 29. The likes of JioCinema, Amazon Prime Video and Zee5 Global also showcase content by other production houses such as Lionsgate, Peacock, Warner Bros, Hoichoi, Chaupal, Sony Pictures Stream, Oho Gujrati, Simply South and EPIC On, among others.
Industry experts believe while the propensity to spend continues to remain, Indian consumers would not see the value of add-on services especially when the service continues to co-exist with telecom bundling. Experts opine that Indians are still not ready to pay for a service that is additional on a big scale. “While there might be some takers for this, it does not make business sense. For growth and expansion, I think everyone will have to resort to what Jio did yesterday is to offer something at such an aggressive price point that people don’t mind paying,” Golwalkar added.
Yet, OTT platforms haven’t shied away from trying to replicate the same model, by allowing third-party platforms on theirs, so that viewers who would want to watch something extra, would have access to it. These platforms typically follow a revenue share model, where the revenue is shared when a user subscribes to another OTT service. “We’ve built out a leadership in the US with ZEE5 Global becoming the leading platform for South Asian content. The natural progression therefore was to evolve into the primary aggregator for South Asian entertainment for this market. Add-ons help solve both content and consumer fragmentation empowering our subscribers to access their preferred content all in a single destination at prices starting from $1.99 and with unified access and billing. For our partners, it’s a risk-free revenue opportunity by riding on our reach in the US and saving on those huge customer acquisition and marketing costs,” Archana Anand, chief business officer, Zee5 Global, said. The platform claims to have partnered with more than seven platforms and intends to bring content across languages from Hindi, Telugu, Tamil, and Gujarati, among others.
In contrast, other industry experts believe that bundling aids the large-scale economy of OTT platforms. However, big players can afford to bundle with telecom players but smaller players feel the heat and do not have deep pockets as well. “Popular players benefit from partnering with the regional content platforms present as it helps to expand their reach in tier-3 and 4 cities and regional players benefit from the massive reach from the urban and tier-1 cities. All platforms want more reach and more customers which makes the add-on service a win-win situation for all,” Girish Johar, producer and film trade analyst, highlighted.
Telecom players join the war
Telecommunication companies have bundled OTT services at a price point which is affordable for Indian consumers. According to a joint study by software and services provider, Amdocs and consultancy firm, Ovum, approximately 44% of Indian respondents stated bundling media services with their telecom plan was the main reason they were willing to spend more on their mobile and broadband bills. The study further stated that 56% of Indian digital consumers are subscribed to more than one paid online video service.
Airtel Xstream offers a bundle of subscriptions to platforms like Netflix, Prime Video, Disney+Hotstar and Airtel Xstream app at Rs 1599. Jio offers a similar bundle at Rs 899 which provides users access to Disney+ Hotstar, Zee5, SonyLiv, SunNXT, Hoichoi, AltBalaji, EROS Now, Lionsgate, ShemarooMe, JioCinema, ETV Win, EPIC ON and DOCUBAY. Industry experts believe that small production houses are looking for monetisation opportunities through content. Additionally, telecom services are getting increasingly diverse to understand customer demand. “Telecom bundling will have an impact on business models. Somewhere, telecom players monetise content better to compete against other players. Additionally, it is about platforms using different user channels for ad revenue. The players in the space are looking for differentiated purposes for serving customers,” Manoj Dobhal, CEO, Dish TV, stated.
While there are takers of both add-on services and bundling in India, based on consumer preferences, it remains to be seen which service stands the test of time.