Small screen, bigger budget: Netflix, Hotstar spending big on content

Updated: September 02, 2019 7:18 AM

OTT platforms are sexing up their original content library with bigger budgets, foreign locales and slick production values

Netflix, hotstar, sacred games, OTT platforms in India, Voot, bard of blood, Amazon Prime Video, orginal content, Pocket AcesThe streaming giant has more such shows in its line-up including Bard of Blood, an adaptation of Midnight’s Children, and Baahubali: Before the Beginning.

By Venkata Susmita Biswas

Netflix, which is believed to have pumped in Rs 100 crore into the production of the latest season of its tentpole show Sacred Games, has set a new benchmark for original shows on OTT platforms in India. The streaming giant has more such shows in its line-up including Bard of Blood, an adaptation of Midnight’s Children, and Baahubali: Before the Beginning.

Tentpole shows created by international OTT platforms for India are usually produced within a budget of Rs 4-5 crore, per hour of content. But even a Rs 30-40 crore budget for one season for an Indian OTT show is an aberration when most domestic players — the likes of Voot, Hotstar and Zee5 — invest Rs 50 lakh to Rs 1.5 crore per episode.
Small screen, big budgets

Slick production values and well-known celebrities is a combination that seems to be working for OTT platforms. Sacred Games, for example, was shot in Nairobi, Cape Town and Johannesburg — a first for an Indian OTT original show.

“Spending heavily on tentpole shows is a marketing ploy by Netflix. In comparison to its global content budget, Netflix makes a small incremental investment for creating originals in India,” points out Rohit Dokania, senior vice president – research, IDFC Securities.

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Big budget shows are crucial to OTT platforms from a subscriber acquisition point of view. Jehil Thakkar, partner, Deloitte India, says, “Just like a film studio would have one or two tentpole movies with the big stars to get better distribution for the entire slate, small budget shows help OTT platforms build a robust library, and the marquee shows lend a broader appeal.”

The first wave of OTT originals saw platforms working with film production houses that could execute big budget shows. Today, OTT players are willing to bet their money on independent content creators, too. “The budgets for these writers and directors are in the range of Rs 1-1.5 crore per episode. This lets them write stories that demand higher production values and cinema-like treatment,” says Samir Bangara, co-founder and MD, Qyuki Digital Media.
Moreover, marketing is crucial. “OTT platforms in India spend around Rs 3-5 crore on a 21-day advertising campaign for a show launch across the top five-six metros,” says Haresh Nayak, group MD, South Asia, and regional director, Asia Pacific, Posterscope. OTT players could spend around Rs 35-40 crore on outdoor media alone in a year.

Bigger picture

As per KPMG, 2019 will likely see an investment of around Rs 600 crore from Netflix into original content production in India. Amazon Prime Video, meanwhile, had earmarked Rs 2,200 crore over a three-year period for its originals in India in 2017.

Amazon Prime Video is currently producing the second season of Mirzapur and has plans to make six other Prime original series in India. Each of Amazon’s original shows is distributed to roughly 200 countries. Meanwhile, Netflix’s Sacred Games is available in 191 countries and has subtitles in more than 20 languages.

Having a wide global audience offers greater promise of monetisation to international platforms, unlike local players, which explains their generous investment. “For such players, Indian originals become part of their global libraries; so, in essence, the monetisation capability of an original show is higher for an international platform,” says Thakkar.
Hence, in comparison, Indian OTT platforms spend frugally. Zee5 is believed to have a budget of Rs 350-400 crore for its originals, while Hotstar has a budget of Rs 120 crore.

Ashwin Suresh, founder of Pocket Aces — the creators of Little Things which was acquired by Netflix — says that unlike Indian players, Netflix and Amazon enter into development deals to plan their pipeline in advance. These deals involve expenses such as hiring a working space for the team, other logistical costs, and paying the team of writers.

“The cost of developing a show is Rs 1-10 crore. In addition, if the show is based on a book, there is also the cost of acquiring the IP,” Suresh informs. Homegrown platforms, whereas, prefer to work on ready scripts.

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