By driving the growth of streaming platforms, content and pricing may have an edge over Covid Curbs

By driving the growth of streaming platforms, content and pricing may have an edge over Covid Curbs

“In these unprecedented times, it is better to watch content safely at home,” said Soumya Mukherjee – VP, revenue & strategy, at Hoichoi, a Bengali over-the-top (OTT) platform. “Thus, the demand for consuming content online becomes prevalent and there is usually an impressive rise in viewership in digital mediums and OTT platforms.” So, will the restrictions fuel growth in the streaming space, or will new content and competitive pricing be the key driver for OTT companies? According to Neeraj Sharma, managing director – communications, media, and technology at Accenture in India, new restrictions may not have a significant impact on OTT subscriber numbers because user acquisition has already taken place.

According to experts, the majority of client acquisitions may have occurred during the pandemic’s preceding two waves. With the introduction of the Omicron version of the coronavirus and an increase in Covid-19 cases in India, outdoor entertainment has taken a backseat once more, and video streaming platforms are expected to become the most popular option for Indian people.

There was strong growth in viewership and subscriber numbers for OTT platforms during the first two waves of the pandemic. During the first wave, when a nationwide lockdown was imposed, streaming platforms in India recorded a 30 percent raise to 29 million paid subscribers in July from 22.2 million in March, according to industry estimates. There were as many as 40 million paying users in the first half of 2021, when the second wave hit the country, according to data by Ormax Media, a media consulting firm.

While the fresh curbs may not drive viewership and higher subscriptions, Sharma said the segment is expected to grow rapidly due to greater acceptance and understanding of the OTT model. Likhita Chepa, a senior research analyst at CapitalVia Global Research, noted that growth in the OTT market has been huge over the past few quarters. “We expect around 20 to 25 percent growth in viewership in the coming years as this industry is expected to attain 500 million users by 2023,” she said. Viewership is the aggregate of paid subscribers and those consuming free content online. Mukherjee of Hoichoi said, “We are expecting a 5x jump in content consumption with the release of two new shows and one film this month.”

OTTs are geared up for this year in terms of new content. While Amazon Prime Video plans to double its original content line-up this year, ALTBalaji, a subsidiary of Balaji Telefilms, will launch Apharan season 2 and Red Suits You, among other shows, in 2022. Telugu OTT player Aha will continue with one release every Friday and will offer more originals, web shows, and non-fiction shows. It is also preparing for a Tamil launch during Pongal this year. Marathi OTT Planet Marathi will launch about 18 shows and six movies this year. Direct-to-digital releases, a concept that came into existence after the pandemic led to the shutting down of theatres and movies that went straight to streaming platforms, may once again become a key part of the original content line-up of OTTs.

Due to the current Covid-19 situation, some states have ordered theatres to shut down while others have imposed capacity restrictions. This has led producers to delay the release of their films on the big screen and reports suggest that filmmakers are looking at a digital-first release strategy. “Based on the trend seen in 2020-21, we can expect mid-scale films to go direct to OTT,” said Shailesh Kapoor, CEO of Ormax Media. When it comes to investments, OTTs are likely to continue spending more on direct-to-digital releases. Platforms have offered premiums of 80 percent for direct-to-digital releases in the past two years. “Since OTT platforms are still in subscriber expansion mode, they see the so-called premium they are paying as a marketing investment to get new subscribers and this may continue for 2022 at least, especially because platforms are continuing to see growth in their subscriber base,” said Kapoor.

Original content continues to remain the key user need, which is why streaming platforms are spending more on such content, according to a recent report by the Boston Consulting Group and the Confederation of Indian Industry. The report noted that there have been 60-70 percent growth in original content year-on-year. The number of hours of original content on OTT platforms in India went up to an estimated 2,400-2,600 hours in 2021 from 500-600 hours in 2018. The CII-BCG report also said investments in Indian original content by OTTs saw a 30-40 percent growth year-on-year. Investments increased to $600-700 million in 2021 from $180-210 million in 2017. Streaming players believe that originals are key to driving subscriptions.

While advertising video-on-demand (AVOD) – or content supported by advertisements – has a bigger share in the Indian OTT space, subscription video-on-demand (SVOD) has seen significant growth over the years. SVOD users have grown to 70-80 million in 2021 from 14 million in 2018. SVOD revenue has increased to $800 million $1 billion in 2021 from $100-200 million in 2018. The report expects SVOD revenue to overtake AVOD in the coming years. In addition to growth fuelled by originals in the streaming space, competitive pricing is helping to attract more paid users.

The CII-BCG report noted that Netflix, Prime Video, and Disney+ are offering plans in India that are 70-90 percent cheaper than US rates. Netflix recently slashed its India pricing and experts said the platform could see double-digit growth in subscribers due to the revised plans. “Fuelled by competitive prices and the availability of a wide variety of new content, a lot of shared subscribers might turn into paid subscribers,” said Sharma. Kapoor estimates that the number of OTT subscriptions will grow 15 percent for the next one to two years.

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