While it took a good 10-12 years for OTT to go mainstream in the US, I believe it is a five to six years journey in India.
Vuclip’s Arun Prakash speaks to Anirban Roy Choudhury about the OTT scenario in India, the company’s strategy for its video on demand platform Viu, and plans ahead. Edited excerpts:
How is the Indian OTT market different from the US?
Consumers expect accessibility, availability and affordability from a media enterprise. What consumers in India or the US or any other market want can be categorised in these three buckets.
If I look at the US versus India, the two are very different. In terms of access, almost every citizen can access great content through smart TVs, handsets and tablets in the US without breaking their bank account, which is not the case in India. Availability of on demand content, especially for the youth, is limited in India as most of the content created by broadcasters for TV audience is skewed towards the female audience. If we talk about affordability, pay TV cost in the US is high so a $10 per month subscription fee for an OTT service makes sense; in India, it is out of reach for many.
While many are saying TV is dead and OTT is everything now, the reality is that the consumer is just getting started in India. The chest thumping, the digital hype in India is just a flying bubble, exactly like the dotcom hype in the US. The industry is trailing the hype; the market is unsustainable with the number of companies that have entered the space. OTT is far from being mainstream
but the decibel levels are already too high. Consolidation is a given, simply because I don’t see 35-odd players sustaining in the market.
When will OTT become mainstream in India?
If we see the trend when it comes to adapting and accepting technology, India and other emerging markets have acted faster than most developed countries. If internet took 10 years to become mainstream in the US, it only took four to five years in India. So while it took a good 10-12 years for OTT to go mainstream in the US, I believe it is a five to six years journey in India for it to become mainstream.
How is Viu’s strategy different for India compared to other emerging markets?
Viu’s strategy in India is very different from other markets like Southeast Asia, Middle East, etc. We don’t see India as one market because when it comes to entertainment, native languages, differences in preference and culture bring out a lot of diversity. Content needs to be created keeping the context in mind. We look at India as a micro-segment market; which is different from how we look at Malaysia or Singapore. In Malaysia, there are three ethnicities — Malay-Malay, Tamil-Malay and Indian-Malay but in India, it is not that easy.
Is catering to a multilingual audience more challenging?
For a provider like us, yes, it is extremely challenging. It is easier for me to create English content and cater to the entire US, which I cannot do in India. But the diversity opens up the door for us to create more content and experiment with different cultures. So for a creator, it is an opportunity; for platforms, it is a big challenge.
From a monetisation point of view, is it easier to play the SVoD game compared to an eyeball or an engagement chasing AVoD model?
India is an AVoD market at large today and it is going to stay like that for a while till people start shifting to SVoD which will only happen if the platform offers enough value for consumers to make a decision and pay. There are certain aspects about the subscription business which are very lucrative. The recurring revenue stream allows for a fantastic opportunity to grow the platform as it assures certain stickiness. While AVoD is all about reach and engagement, the advantage is that there is no friction; it is not that one only gets to see the content one pays for. Again for a content creator, AVoD is a blessing as it opens up the content for all; but from a business point of view, SVoD is way more advantageous. A freemium business model is the best one at this stage.
When will Viu turn profitable?
It is a game which needs one to spend a lot of money for an extended period of time in a market like India. It will take time to turn profitable; I do not see it happening in the next three to five years.
Our strategy for India is well defined; we are into youthful content targeted towards the audience not watching soap operas in their living rooms. We might be a global company but we have a very hyperlocal strategy in each and every market, and the same is the case in India.