1. All in the name of OTT

All in the name of OTT

With booming digital video consumption, telecom and DTH operators don’t want to miss the bus and have launched their own OTT platforms. Will these ancillary players manage to grab a share of the OTT pie?

By: | Updated: June 6, 2017 4:19 PM
Live cricket matches, movie premières, ease of watching your choice of content on your mobile phone are no more over-the-top ideas.

Live cricket matches, movie premières, ease of watching your choice of content on your mobile phone are no more over-the-top ideas. OTT has revived the joy of consuming content and it seems every player in the content consumption game wants a piece of the pie, from conventional broadcasters and content providers to even DTH and telecom players. With increased smartphone and broadband penetration, several opportunities have opened up for telecom and direct-to-home (DTH) operators to diversify into multiple services. Thus, they are also joining the OTT bandwagon and stepping out of their core business through syndicated offerings.

And the lines are blurring. Whether it’s an alliance between Hotstar and Reliance Jio to bundle premium content for Jio Play subscribers; Videocon d2h launching a Smart Connect HD STB (set-top box) integrated with Netflix, Zomato, BookMyShow, etc; or Airtel Digital TV launching an integrated Android STB — everyone is trying to capitalise on content consumption for additional revenues. DTH operators now allow streaming from OTT services directly on a TV screen too. Ashish Pherwani, partner, media and entertainment at EY, says, “It is positive synergy and this is the true age of ‘co-ompetition’. OTT platforms work on alliances and partnerships, and more of this will happen in the future.”

According to experts, it’s a win-win situation for both — while telcos are partnering with apps to facilitate use of data on their network and increase traction through their vast reach and consumer base, for DTH operators it’s a differentiating factor that could very well be their USP. And it also allows the OTT platforms to tap into a ready consumer base and enable sampling at a lesser cost. But as operators eye monetisation, will collaboration or competition be the name of the game going forward?

Opportunities galore

The OTT universe has exploded with multiple industry stakeholders, including broadcasters, pay TV operators, content aggregators, production houses and telcos, wanting to become content distributors. In fact, Reliance Jio has also obtained a multi-service operator licence, which will allow the Mukesh Ambani-led company to offer pay TV services via cable. Other tie-ups include Airtel’s launch of a hybrid STB which offers pre-loaded Wynk Movies, Netflix, YouTube, Google Play Games, Airtel Movies and more. Similarly, Videocon d2h is rolling out a new Smart Connect HD STB which will deliver satellite channels, and a proprietary app store format that will house Netflix (to be integrated by Diwali this year) besides Hotstar, ALT Balaji, Voot, Amazon Prime Video, OZee and other utility apps like Zomato, BookMyShow, Zimmber, etc.

A Videocon d2h spokesperson says, “Our subscriber base and vast reach give us insights into the viewer consumption habits to acquire better content, thus making OTT platforms like Netflix collaborate with us. We own the house and our last mile connect is giving these platforms the best bang for the buck.” The integration not only provides diversified offerings to consumers but also offers a potential uptick in the ARPUs (average revenue per user). Other players like Tata Sky and Dish TV are trying to build compelling offerings through Tata Sky World Series and DishOnline, respectively.

“Our strength is aggregating content so there is a great opportunity for us as there are multiple OTT players now,” says Sukhpreet Singh, SVP and head, marketing, Dish TV, adding, “This will also give us a competitive edge since finding content and downloading too many apps is not appealing to consumers in every market.” A Frost & Sullivan whitepaper titled Industry Outlook for the Indian Telecom and Broadcast Industry mentions that with high infrastructure costs involved in the development of 4G and fibre broadband, telcos are trying to monetise data through all opportunities available.

For instance, Vodafone is strengthening its offering Vodafone Play through tie-ups with Eros, ALT Balaji and Hungama among others. Dipankar Ghoshal, EVP, VAS and content, Vodafone, explains, “With 4G becoming wider, customers are getting better access to the network. We have rich content as aggregators and soon, we will also bring Netflix to our postpaid customers.”

And it’s not just telcos and DTH, MSOs are also looking at going with the flow. Hathway Cable & Datacom has plans to roll out its OTT offering soon, while DEN Networks has already launched Den TV+. Without divulging details, TS Panesar, CEO — video business, Hathway, says, “Cable TV has a unique advantage of providing internet using the existing network which along with mobile internet will help OTT services to grow exponentially. While we continue to innovate our cable TV offerings, we are also exploring OTT to capitalise on its growing popularity with the younger generation.”

Is this the happily ever after?

The desire to drive experiences for consumers and marketers through differentiation is encouraging alliances between tech and content players. Such alliances are expected to boost monetisation channels, such as ad revenue, subscriptions and data consumption along with an increasing customer lifetime value. At the same time, it is helping telecom and DTH players earn additional revenues rather than changing their core business models. “Customer acquisition is expensive for OTT players. Integrating with telecom and DTH operators helps to reduce the cost, while at the same time bringing in additional revenue for operators,” Pherwani mentions.

“At the end of the day, we are a telecom company. We see ourselves as OTT enablers and won’t be investing in content creation,” says Ghoshal. A combination of the distribution strength and established payment networks of telecom and DTH operators along with the content creation capabilities of large media houses could help in providing a superior experience to the user. But unlike OTT platforms, the challenge for DTH operators is not content or technology but differentiation. With network-owned platforms and telecom or DTH operators airing the same content, there is the concern of cannibalisation. Another threat stems from the wireless mobile broadband players which are bundling content with data and offering it at low prices to users.

“Thus, the key lies in understanding the consumer,” says Singh, adding, “Unlike us, OTT players also have the challenge of monetisation as they are still figuring out their business models. With our initiatives, we are enabling expansion into OTT but we are today, a multi-screen player.” Although differentiation can be created with original content, it is not the space telcos or DTH operators are eyeing currently. How this competition plays out in the future, will be an interesting watch. Or like Ghoshal sums up, “We are aggregating OTT content but for us it’s a different ballgame. We are not running the race to become an OTT player but rather focussing on giving our customers an experience while increasing the 4G sampling.”


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