Streamers Are Dreamers: Video Streaming Changing The Game!
Apple’s CEO Tim Cook said in 2015, “The future of TV is apps”, he was referring to the Over the top (OTT) video streaming experiences like Netflix and Amazon Prime Video. He was right about that fact as these platforms are enjoying rapid advancements around the globe even today.
‘According to a report from Kotak Institutional Equities, over-the-top (OTT) revenues will jump to a whopping $3.1 billion, showing a compounded annual growth rate (CAGR) of 48% over the next five years from 2018 to 2023. This will be driven by digital video advertising which will jump to $2.2 billion from $0.4 billion and OTT subscription rising to $0.9 billion from $0.1 billion’, as quoted from The Telegram’s post.
The growth is for the household as well as mobile streaming platforms. The top five devices to stream over-the-top to a TV are streaming boxes and sticks, smart TVs, game consoles, internet enabled DVR and set-top boxes and internet enabled Blu-Ray players.
But why is the OTT market so fragmented? Most people are not dedicated to their OTT watching experience. They use it as a value-added service. People buy a TV to primarily watch linear TV, play games or watch DVDs (reducing rapidly). However, this is now starting to change.
Consumers are spending more and more time streaming OTT content on demand. Big shifts in viewership habits have been occurring and now threaten the future viability of traditional TV. A Nielsen Study revealed that in the last five years, there has been a 40% drop in traditional TV viewing by 18 to 24-year-olds. With that kind of a wake-up call, entertainment giants have started teaming up with digital partners or try to adapt to the new digital universe.
In India, there is fierce competition between traditional and digital media. There’s a lot of scope in the booming OTT market in India ever since the launch of Jio in September 2016. Internet consumption habits have changed with easy access to 4G, video streaming on mobile. India is now the world’s largest data consuming market with Jio recently declaring that over 771 cr GB of data flows through its networks on a monthly basis.
Will Indians Pay?
If content curators continue to provide quality content, Indian viewers will not hesitate to pay for services like Netflix; they are planning to experiment with their pricing models and local language options not only for India but also for countries across the globe. With the surge in internet consumption in India, even the remotest areas have access to good bandwidth and data download speeds. Even in smaller towns and villages, people have become avid users of OTT platforms. It’s not just an urban phenomenon. Jio’s emergence has changed the game. With the introduction of the JioPhone and JioPhone 2, they have ensured that you can stream even if you don’t have a smartphone.
Due to a wide cross-section across social and economic strata, there’s a wide range of content that will work. It is hard to determine how different audience clusters react to different types of content. A single model of OTT will not work in a country like India. Hybrid models will be required for such a diverse country.
“We expect these digital video users to more than double in five years driven by an increase in unique 4G subscribers to about 700 million from 315 million, increase in smartphone users to about 650 million plus from 350 million, increase in fixed-line broadband subscribers to about 45 million from 21 million. Our base case assumes that Jio will launch fixed-line broadband offerings in 70–80 cities over the next 2–3 years’’, analysts said in a report by Kotak Institutional Equities.
According to the recent BCG report, the revenue contribution of the Indian video OTT market was $500 million in 2018. Of this, 82% was from Advertising-Video-On-Demand (AVOD), while the rest 18% was from consumer pay (SVOD, TVOD). The Indian OTT market is expected to generate $5 billion in revenue in the next five years. That too, with much equal distribution. The predicted share is — 43% from AVOD, 32% from SVOD and Transaction-Video-On-Demand (TVOD) and the rest 25% of the global market. The launch of Jio’s broadband will boost OTT services primarily on mobile phones but also on smart TVs and computers. As India gets more and more OTT centric, it might lead to the slow death of linear TV.
Now, the question arises, is an Indian viewer ready to pay for services-on-demand or freemium versions like Hotstar, SonyLIV, HungamaPlay and ALTBalaji starting from as low as 29 rupees?
Into the Consumer’s Mind
A consumer, generally, will try your platform using the free month you offer and analyse if the content is worth paying the amount (Sampling). Basically, a consumer will first search for value-for-money content across all the platforms. They will not mind paying for original content, digital movie premiers and live sports.
India is the fastest growing video consumption market (thanks to Jio) due to affordable high-speed internet. Also, the country of single TV households will benefit from a personal smartphone screen with affordable internet. This is plain logic, plus, the added mobility increases the consumption.
If we look back three years from now, the issue was never in the payment of OTT services, it was the high-priced 3G data that was causing the hindrance. After Jio made 4G mainstream, the issue got resolved and came with an added bonus of anywhere-single-screen viewing. Remember Hotstar’s campaign, ‘Go Solo’ it was a hit to convert our video-consuming habits in the later stages.
Actors, content quality and vast-ness are the pull-in factors to any platform. The other factors include offers for free streaming. For example, Airtel offering Amazon Prime Video India and Netflix (for three months) free to its consumers.
Cheap mobile data shoots up the consumption of video-content and vice versa. The companies are benefiting from both and the sale of smartphones are also increasing as an indirect effect.
Customer Retention: Still No Hacks!
Customer Retention is a hack that is very hard to master. As a consumer, I can say there is no particular platform I visit. I, like most of the consumers, have access to multiple OTT platforms and would rather switch between them and pay for more content than limit myself to a single platform.
Subscriber retention is the most daunting task, to do it effectively, it needs strong marketing and incentives. If you fail to convince the consumers or to provide them with unmatched content, they are most likely to shift to another platform catering to their viewing needs.
We accept the fact that storytelling is timeless but the possibilities are endless, the way you do things matter more than the things you do. Customer satisfaction is admired, but delight loved!
