If content is king, one can easily assume that platforms are kingdoms. This kingdom is ruled by none other than the king. In plain words, if an over-the-top (OTT) platform used content to acquire new viewers, it is now being used to retain it. One such example of this is Viacom18’s reality show Bigg Boss which is aired on its Hindi General Entertainment (GEC) channel Colors and Jio Cinema. In order to retain loyal followers of the show, the company has also rolled out an OTT version of the shoe called, Bigg Boss OTT. “As per the available statistics, we have 50 million subscribers and 120 million subscriptions in India. So each person has about two or two and a half subscriptions. The numbers have been stable for a fairly long time now. The only way to retain them is to ensure they get their preferred content, whether it is television, sports content, or originals. So, a platform needs to have the quality and velocity of the content,” Uday Sodhi, founding partner, Kurate Digital Consultant said to BrandWagon Online, adding that velocity simply means the number of new shows or regular shows a platform has. So even if a platform creates original shows, it needs to make it with a certain frequency. So that people come back again. The role of television content becomes very important here as it brings new episodes every day.
Reducing cost-of-customer- acquisition involves multiple factors, including the target audience for a show, distribution approach of a platform (D2C vs. B2B), partnerships, and the mix of subscription tenures. Experts believe that data analytics has become key for targeted marketing and can significantly impact CAC if used well. Other initiatives include referrals, strategic partnerships, optimising user acquisition channels, and offering free trials and discounts. “Post-acquisition, renewals and the associated costs depend on how well we manage the customer’s lifecycle on the app. By focusing on these areas, OTT platforms like aha can lower CAC while enhancing overall user satisfaction and retention,” Rakesh CK, EVP and head, SVOD and Marketing, Aha, explained.
The Mood of users
To be sure, revenue in the OTT video market in India is forecasted to reach $4.06 billion in 2024 with the largest market being video streaming (SVoD), at a market volume of $2.02 billion, according to a report published by Statista, a market research firm. It is also mentioned that the number of users is projected to reach 634.3 million by 2029. Moreover, India had 101.8 million active paid (B2C) OTT subscriptions across 36.4 million SVoD (B2C) audiences, an average of 2.8 subscriptions per paying audience member, revealed data by Ormax Media, a market research firm. Each player here follows a different strategy, while Netflix is known for quality of content and content is the only pull it has; Amazon on the contrary has bundled a lot of services under Prime, including access to Prime Videos and Music. Many OTT brands meanwhile have introduced gaming. As per industry experts, Amazon’s strategy of offering an annual Prime subscription for Rs 1499, which includes e-commerce benefits and video streaming, hinges on bundling multiple services to enhance perceived value and drive overall affinity to Amazon’s ecosystem. “This approach boosts e-commerce sales through increased loyalty and frequent shopping by Prime members. It helps offset the costs of additional services. Amazon’s vast infrastructure and global scale enable economies of scale, and revenue from other segments like e-commerce and cloud computing supports the profitability of the Prime subscription. In contrast, Netflix operates solely as a streaming service (as us at aha), which is why it charges a higher monthly fee of Rs 149 for its basic plan,” Rakesh CK of Aha, said.
Gaining loyal users can be a tough job especially when it comes to the Indian market where affordable pricing alongside preferred content seems to be the core demand of consumers. To gain more users, platforms have introduced monthly or quarterly short-term plans which come at a pretty reasonable price. For Hoichoi, these plans have been proven successful despite the company believing it offers the yearly plan as a value proposition, as per the platform. “For the longest time, Hoichoi didn’t have any monthly or quarterly plan in India. It was primarily yearly subscriptions. We still believe in that ethos because we give it as a value proposition to the customers. It has a high refresh rate of original shows and new theatrical movies in the market. Almost all movies are released in Hoichoi after their theatrical releases. A yearly plan ideally makes sense for our users and that is what we see from a percentage standpoint as well. But our quarterly plan is primarily targeted towards new users and with UPI recurring coming into the play, we had decent success with the quarterly plan so far,” Soumya Mukherjee, COO, Hoichoi said.
Add to this, bundling with telecom operators, direct-to-home (DTH), besides Amazon Prime which now acts as a marketplace for these OTT platforms, are other ways users can subscribe. For example, Tata Play Binge allows consumers to subscribe to any six OTT platforms at Rs 199 per month, under its Flexi Plus plan. Experts believe this strategy varies from brand to brand but at the end of the day, this does help to retain and acquire users. “India is a market where strong ships can survive and coexist. If the value proposition of a platform is already strong, it doesn’t need to aggregate. But even then, bundling with major players, primarily with telecom ones leads us to last mile users who wouldn’t ideally pay a premium amount to subscribe or someone who primarily wants other OTTs together as a value add, and I think that is where OTT bundling comes into play,” Mukherjee added.
Content is the king but what type?
In a diversified country like India where there is no lack of vivid imagination among users, finding the right content plays a critical role in retaining consumers. Apart from original content, live sports such as The Indian Premier League (IPL) besides television replays do help in gaining eyeballs . To be sure, a total of 113 million viewers logged into JioCinema for the first match of this year’s IPL thereby clocking a year-on-year growth of 51%. Although these numbers can be lucrative in terms of new users, experts say retaining them has been the ultimate challenge for the platforms. “Sports content is good for one time acquisition of a new customer or users who want to sample a platform. But sport is not an everyday phenomenon, it comes once in a while. At the time of the event, consumers download the platform and use it. These people are fans of sports and therefore they become regular users whenever the event is on. The challenge lies in how platforms convert them to regular users. That is where television content or original content becomes useful. Platforms need to funnel the sports fans to loyal ones,” Sodhi added.
As a matter of fact, experts opine that the presence of big stars or dance numbers does not guarantee success. Whether it is Bollywood or any OTT platform, making relatable content that can be consumed by mass becomes important. “Although I haven’t been a big advocate of OTT platforms, it is to be agreed that, as a platform, OTT is gaining popularity in certain parts of the country. For example in South India or the southern market, there have been some spectacular cinemas made in Malayalam, Telugu, Tamil, and Kannada, which were featured on OTT platforms. Earlier the northern side of India didn’t realise that they could consume it because of language barriers. Nowadays people can embrace the medium because they are getting variety,” Shankar B, CEO, Fourth Dimension, said. To be sure, films like Manjummel Boys have earned over Rs 100 crore now, and Kalki or Maharaja also did well. Experts point out that if any platform provides good content and variety, it will be able to retain the audience. But at the same time, naysayers say there is an overdose of OTT content. At times it becomes too much to keep track of it.
Payment pandemonium
As the OTT world tries to strike a balance with content, one cannot forget payment Constant failure in payment leads to drop out in subscribers. To solve this issue, OTT platforms claim to have experimented with various solution methods. For Aha, the platform claims to have reduced the number of steps related to payment. “We focus on reducing friction points by simplifying and streamlining the payment process, minimising the number of steps required for transactions. We are consistently improving the payment experience by implementing one-click or one-tap payment solutions that can expedite the checkout process, while integrating a wide range of payment options, including credit cards, digital wallets, and importantly UPI. Securely saving payment information for faster future transactions and providing clear pricing and billing information has also helped enhance user satisfaction and trust,” Rakesh CK added.
According to a survey by Chargebee, payment failures are now a top concern for 41% of subscription-based businesses, outranking customer acquisition. The same survey found that 45% of subscription-based businesses spend at least five hours per week managing failed payments. Industry stakeholders feel that it is very difficult to learn from the US case study because the market in India is completely different from the US. In the US, churn is anybody who voluntarily cancels their subscription. “In India, more than 50-60% of users don’t need to voluntarily cancel their subscription because it automatically ends as a recurring or auto-renewal payment ecosystem does not exist. So, the US is not the right case study to follow. Indian OTT platforms have very unique challenges to survive and everybody is trying to build a loyal user base and give the right content strategy that would primarily drive growth,” Mukherjee added.