Indian OTT players look at foreign shores for expansion

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Mumbai | September 02, 2018 1:00 AM

The latest to expand overseas after Hotstar and Eros Now is Viacom18’s Voot, with launch plans for UK market.

Indian OTT players look at foreign shores for expansion

While international players like Netflix and Amazon Prime Video have been gaining traction in the Indian digital video ecosystem over the past few years, homegrown platforms are also coming into their own, with many expanding overseas.

Consider Star India, which rolled out its OTT offering Hotstar in the US and Canada last year, or Eros Now, which is available in nine countries apart from India. The latest to join them is Viacom18, which is all set to roll out its digital platform Voot in the UK in November, 2018.

“If we look at overall international markets, there is a clear shift from television to digital and streaming services,” says Sudhanshu Vats, managing director, Viacom18. “It is important that we are able to give our offerings both in television and on digital, in line with our philosophy to make Viacom18 screen-agnostic.”

Voot, currently an advertising-led video on demand platform (AVOD) in India, plans to roll out a paywall in the country by early 2019. Its launch in the UK, however, will follow a clear subscription-led video on demand (SVOD) revenue model. The content provider has inked a revenue sharing telco partnership with Virgin to reach out to netizens in the UK (including the south Asian and Indian diasporas there, as well as British youth) with an offering that will be a mix of catch-up TV content and originals.

Other players in the category — Sony LIV, Zee5 and Hotstar — too have a vast library of catch-up TV content, while Eros Now rides on its movie library. These platforms follow a freemium model where catch-up TV is available for free, while originals and live sports are put behind a paywall.

As per a GroupM report, 18% of the total advertising pie of Rs, 69,346 is spent on digital. “The bulk of digital video advertising is happening on YouTube and Facebook, but OTT has emerged as the third-largest, especially with Hotstar,” observes Rajiv Dingra, founder and CEO, WAT Consult. “Sports is the largest category within OTT as far as advertising is concerned, but general entertainment is also picking up.”

Jehil Thakkar, partner, Deloitte India, believes the steadier and more predictable revenue stream for OTT is SVOD. “If one looks at Netflix and other SVOD platforms, they are valued much higher by the stock market. It may be a while before the Indian market accepts the SVOD model fully,” he says. When it comes to Indian OTT players crossing over to other markets, it may be a wise move. “In international markets they will find more paying customers. This can cushion some of the revenue deficit on the Indian side and ensure longevity,” Thakkar observes.

Although a part-paywall is on the anvil for Voot, Vats is still bullish about digital video advertising. “The digital video piece has taken off only in the last couple of years. If you look at the kind of advertising for sports properties and tentpole entertainment, it is quite high and that will continue to grow,” he says. Voot is aiming at releasing 18 new titles, with plans to create 200 hours of original content per year. Voot, like Hotstar and Sony LIV, will stream live news, as all the 16 TV18 news channels spread across 13 languages will be on the platform.

Currently, there are more than 30 OTT players in India, leading to a battle for sports rights and better quality content producers, and therefore, higher content costs and customer acquisition costs. “Furthermore, monetisation remains a challenge. But on the flipside, the consumer now has a wide variety of content to choose from,” Thakkar sums up.

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