Entry of content creators in the OTT space not a threat to streaming giants: Experts

Even though more and more content creators are jumping on the OTT (over the top) bandwagon, experts believe that this will not impact the big video streaming players such as Netflix and Amazon Prime.

Hanish Bhatia, Senior Analyst at Counterpoint, told Moneycontrol, “I won’t say content creators are a direct competition to players like Hotstar as of now. These are bigger players and they are more of content aggregators. For instance, Hotstar is turning back to players like Shemaroo or Eros and it is actually acquiring content from these content creators/distributors. Whereas, companies like Ultra, Shemaroo are all content creators which have existing libraries of a wide variety of content.”

“For example, I have to watch a movie from the 1980s or 1990s. Chances are that they won’t be available on Hotstar. Hence content creators are bringing all their existing content libraries in the OTT market so as to leverage that content and drive new revenues through partnerships,” he added.

Shemaroo, one of the biggest content acquisition and distribution companies, recently joined the OTT space by launching its streaming service ShemarooMe. The company differentiates its streaming service as desi,  having a huge library of Indian content.

“In the last one year, we have seen almost all the traditional players with a good content library shifting to the OTT space. Five or ten years back, almost all movies used to release on T-Series or Eros or Shemaroo. As a result, they have a wide library of content and have decided to launch their own OTT services in order to open up new avenues,” Bhatia explained.

“So, their strategy going forward is not particularly similar to that of a Hotstar or Netflix. Instead, they are trying to generate new revenues through partnerships. For example, in the case of Shemaroo, they have tied up with Vodafone. Right now, the content market is more operator driven. Jio started this race,” he said.

He further said that there is a possibility that Shemaroo's content may be available on Hotstar. “And then they are also getting into partnerships with telcos and particularly smartphone union.”

Giving the example of music streaming apps, where content partnerships are very popular, Bhatiya said, “For example, the Hungama app is a pre-installed app on Xiaomi devices. So they have MeMusic in a partnership with Hungama Music.”

Along with Shemaroo, other players like Zee Media, Viacom 18, and Balaji Telefilms have gone digital to open up a fresh revenue opportunity. For them, it is important to cater to the instant era audience that wants to enjoy content anywhere at any time. Hence, these companies are raising money to either create exclusive content or are tying up with other platforms.

In the case of Shemaroo, Bhatia believes, “There is a strategic challenge in the Indian OTT market as it is more focused on the advertising revenue. So, it depends on how Shemaroo is planning to monetize it – are they going for a  total SVOD (subscription based) model or a hybrid model, which has both free and subscription-based content, similar to what Hotstar has.”

He added that we will have to see “what kind of strategy they will follow going forward" and if they have "a significant amount of money to invest in original programs and creating new content to cater to younger audiences.”

The company, which has around 3,500 movies in its kitty, believes in collaborations and will have a lot of its content available on its partner platforms.

Shemaroo is betting on masala content and classics, in an attempt to make the OTT user base wider.

“We have seen that the OTT market is more penetrated in the 16-24 and 25-30 age groups. However, the content libraries of traditional media houses were more dominant during the 90s. Which means that they may cater to a wider user base, depending on their strategy,” said Bhatia.