How technology is shaping the future of streaming services in India

By Prashanth Rao and Akshay Sudhir

Technological disruptions have always had a deep and pervasive influence on the media and entertainment (M&E) industry. Failure to accurately read technological trends and adjust business models could easily mean the difference between failing as “video rental chain” Blockbuster or winning subscribers as “DVD rental company turned global OTT player” Netflix. With dominant global Over-The-Top (OTT) players (Netflix, Amazon, Disney, etc.) and production house-backed local OTT players (SonyLIV, Zee5, AltBalaji, Eros Now, Sun NXT, etc.) vying for price conscious Indian subscribers, the key factors that can set the competitors apart are the availability of relevant content and adoption of the right technology enablers.

The streaming business is capital intensive and requires long-term investor commitment as profitability depends on sustainability of a paying or monetisable subscriber base. The annual per capita M&E spend in India in 2021 is expected to be US$32, a fraction of the spend in China (US$2,22) and the United States (US$2,260). This means that OTT players fight for a smaller share of an India subscriber’s wallet while continually investing in original and licensed content. Customer price-sensitivity and fatigue due to a multitude of available streaming service options means that OTT players will have to work hard to protect their subscriber base while ensuring cost-effective operations. This would require significant investments in technology to ensure seamless availability of content and robust usage of infrastructure to deliver the best Quality of Experience (QoE) to subscribers across every possible streaming device.

Improving QoE meant that OTT players had to move from the traditional approach of running their own capex-intensive data centre operations to embrace cloud-based solutions. Cloud-based operations enable OTT providers to scale operations to meet peak traffic demand and deliver content reliably to customers with no downtime. OTT players have embraced the cloud and invested in partnerships with resilient Content Delivery Networks (CDN) to support and scale dynamically to deliver content to millions of concurrent users across India. OTT services have also adopted edge scaling that localises traffic and improves the delivery of content within the local Internet Service Providers (ISP) network.

OTT players are also expected to benefit from the deployment of 5G networks in India over the next two or three years. 5G networks are expected to be at least 10 times faster than 4G LTE and reduce latency by at least half in commercial implementations. With India expected to have over 500 million online video subscribers by FY23, 5G is geared towards enabling OTT players deliver new and improved customer experiences at a fraction of the cost. This would bridge the performance gap between broadcast and OTT streaming services. OTT players can provide cost-effective, high-quality, and low-latency content at the right scale to their subscribers. Customers can live-stream content such as sports, music shows, and e-gaming events, further driving OTT adoption.

Reducing network bottlenecks and improving the QoE could also trigger improved partnerships between traditional broadcasters and OTT players as they explore synergies to provide better choices to the subscriber base. Cloud-based gaming services, such as Stadia by Google, Project XCloud by Microsoft, and Luna by Amazon would also benefit from low latency. With reliable performance, dependence on costly and outdated gaming hardware would be unnecessary and this is expected to drive increased adoption by subscribers.

Cloud computing also offers the ability to quickly deploy servers, scale storage requirements seamlessly, and perform near-real time analysis of terabytes of data. This provides streaming services the ability to use AI and machine learning to continuously improve OTT content. Through AI and machine learning, OTT players can use Content-Aware Encoding (CAE) video compression to provide the best possible picture with minimal bandwidth consumption. AI also enables the hyper personalisation of content by improving recommendation engines to provide nuanced content recommendations using the content preferences of millions of customers. Actionable intelligence and real-time insights into consumption patterns can unlock better customer engagement and deliver relevant localised advertising. Better insights into content consumption patterns can also aid OTT players in making informed decisions while commissioning original content creation and managing existing licensed content.

It is not just original content that is being localised but OTT players have also realised that there is an appetite for content that is dubbed and available in regional languages. OTT players are building technology to manage the simultaneous preparation of dubbed content with original content for release to make content more accessible and strengthen the reach of their international content catalogues.

Technological advances are also driving convergence in M&E companies by expanding what the definition of content could mean to the entertainment of the subscriber. Streaming services can combine video, games, and music that could be delivered with a greater degree of interactivity, building monetisable offerings that rapidly adapt to shifting customer preferences.

The diversity of content and an extended OTT ecosystem also highlight the need for security and constant vigilance. OTT players currently protect content through multiple Digital Rights Management (DRM) solutions, such as Widevine (Google), FairPlay (Apple), and PlayReady (Microsoft), to support most user environments. The adoption of Common Media Application Format (CMAF) will help standardise implementation of DRM, reduce system overhead and CDN inefficiencies. OTT players also employ forensic watermarking to track and prevent illegal distribution of content, building confidence of production houses as they adjust to the new normal of digital-only releases and shrinking theatrical release windows.

With India being one of the fastest-growing M&E territories in the world and with 50 percent of its population under 30, there is an increased propensity of customers embracing streaming services and the medium is expected to become increasingly relevant for M&E content distribution. Technological advances will continue to shape and disrupt the industry but strategic investments in technology will help streaming services harness new opportunities, enhance customer experience, and remain relevant for the years to come.

The authors are partner and associate director respectively at Deloitte India

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