Broadcasters led OTT platforms bet big on original content

Digital video subscription in India was Rs 2,820 crore, growing at a 30% CAGR

To cater to the Indian viewers’ varied entertainment needs, the ‘big four’ among the broadcaster-led OTT platforms in the country are investing heavily in creating original shows and adding features to their apps. They are also beginning to charge higher subscription prices for premium offerings.

The ongoing pandemic has resulted in a sharp rise in time spent on video streaming apps, strengthening the relevance of these apps in the lives of consumers. As per a BARC-Nielsen study, there was a 19% increase in the time spent on watching OTT originals during April and May compared to January 2020.

The latest streaming platform to reinvent itself has been SonyLIV. The platform has added three new originals to its content library and increased the price of its premium subscription packages from Rs 99 a month, Rs 499 per year, Rs 299 per month and Rs 999 per year. Zee5, too, has an annual fee of Rs 999, and a pocket-friendly fee of Rs 99 per month.

Meanwhile, Disney+ Hotstar plans to charge premium users Rs 2,089 for a year. However, an introductory discount of 58% gives users access to premium shows and movies at Rs 1,499.

In 2019, video subscription revenues grew 111% as per a Ficci-EY report. However, the percentage of paying subscribers is less than 5%, the report noted. Digital video subscription in India was Rs 2,820 crore, growing at a 30% CAGR.

“The demand for original shows has increased and the cost of creating these is rising too, but there are only a handful of production houses that can churn out that quality of content,” says Jehil Thakkar, partner, Deloitte India.

As per industry estimates, the cost of making one episode of an OTT original could range from Rs 50 lakh to Rs 2 crore. In the case of some tentpole series such as Sacred Games, it could be as high as Rs 3-4 crore per episode.

The latest trend of premiering movies on digital due to delays in theatrical releases is further expected to boost subscriptions for these platforms. Disney+ Hotstar has obtained the rights to screen seven movies direct-to-OTT, including Laxmmi Bomb, Bhuj and Sadak 2.

Estimates by Red Seer Consulting placed Disney+ Hotstar ahead of all OTT platforms with 30 crore monthly active users (MAUs) in 2019 while Zee5 had six crore MAUs. Although SonyLIV was not aggressive on the original content front until recently, the platform’s live sports portfolio is crucial, say experts.

Platforms are also stepping up their advertising driven business by offering a variety of avenues for brands to engage with the viewer. Zee5 has introduced HiPi, a short-video offering like TikTok. “Our ambition was to be more than a catch-up TV and original content platform. To this end, we have introduced music videos, gaming and are now focussing on UGC short-video format and news videos,” informs Rajneel Kumar, business head, expansion projects and global head of products, Zee5. Zee5 has built out a camera app with filters and pre-programmed music for HiPi.

Gourav Rakshit, COO, Viacom18 Digital Ventures, expects users to turn to their favourite OTT platforms for all kinds of video content, not just fiction shows. “We have observed that during the lockdown, people have been consuming instructional content on the platform including fitness, cooking or well-being related videos,” he says. As a result, the platform has struck partnerships with Cult.Fit, Isha Foundation and UpGrad in the last few months.

A self-serve advertising tool has become crucial to the growth of these platforms as it enables SMBs with small budgets to advertise on OTTs. Disney+ Hotstar and Zee5 have made their self-serve platforms public, while Voot may take longer to introduce the service to the public. Ficci-EY estimates suggest that SMB advertisers could have spent as much as Rs 8,750 crore on digital advertising in 2019.

Read Also: General entertainment channels return with fresh content

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