Will India’s OTT viewers bite the Apple?

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Updated: December 1, 2019 4:33:47 AM

Dinkar Ayilavarapu, partner, Bain & Company, believes with Indians not really short of options on video OTT, “any other late entrant would probably struggle”.

Apple has a minuscule 1.2% share in India’s smartphone market, as per Counterpoint Research. Surveys show Indians prefer consuming content on mobile phones, and about 87% of daily time spent on online videos by viewers is on smartphones, as per an Eros Now-KPMG report.

Earlier this month, Apple TV+ debuted in India’s fairly cluttered video-streaming space, which has seen the number of OTT players increasing nearly four-fold in a span of six years since 2012. Apple’s attractiveness lies in its throwaway price of `99 per month that comes with a slate of all-exclusive content. However, given that the service is restricted to iOS devices and select smart televisions, it could be hard to attract eyeballs when consumers are already spoilt for choice.

Apple has a minuscule 1.2% share in India’s smartphone market, as per Counterpoint Research. Surveys show Indians prefer consuming content on mobile phones, and about 87% of daily time spent on online videos by viewers is on smartphones, as per an Eros Now-KPMG report.

Apple’s streaming service can also be accessed via the web, but analysts say its content library is not compelling enough to make it a big draw, especially when its potential customer base has a strong overlap with that of Netflix and Amazon Prime Video.

“Apple TV+’s positioning seems to be at the top as they are bringing in international content,” said Rajib Basu, partner at PwC. Basu reckons that Apple may need to go the Netflix way by producing India originals and building up a regional library. Price cannot be the only consideration when opting for an OTT platform, it is the quality and variety of content that takes over, he said.

To entice local viewers, the Los Gatos-based Netflix has ramped up its India library, which currently comprises over 10 regional languages (including Hindi) and has paid a considerable sum of money on originals.

Netflix’s biggest property Sacred Games is estimated to have cost over `10 crore per episode, an analyst said. Average shows cost about Rs 3.5 crore per episode or lower.

“Apple’s stated position is original content which is capital-intensive. It has the money to do that. One would imagine they may come with a larger library to attract the Indian audience,” said an industry observer on condition of anonymity. Apple reportedly spent about $300 million on the first two seasons of Jennifer Aniston-starrer The Morning Show.

Ajay Gupta, partner at AT Kearney, observed that in India, global content alone cannot be a growth driver, and content, even if it is not vernacular, needs to be set in the local context so that people can associate with it. “The premium end of the market may briefly experiment with Apple Tv+ but eventually consumers would not subscribe to more than a couple of OTT platforms, else the cost of subscription will go up,” Gupta said. He does not see Apple Tv+ having any significant revenue uptake in the short run, given the limited penetration of Apple devices; also it would not be a driver for handset sales given the same is driven by many other factors.

Dinkar Ayilavarapu, partner, Bain & Company, believes with Indians not really short of options on video OTT, “any other late entrant would probably struggle”. However, Ayilavarapu points out that Apple’s strength lies in its loyal customer base, which will allow the tech firm to tailor its offering to subscribers better. Apple may not go mass, but explore other avenues for content like producing global content (given a very large base in the world) and leveraging that in India or accessing third-party content. “It won’t be easy but will be interesting to see how it goes,” added Ayilavarapu.

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