Star Wars? Regional OTTs giving stiff competition to big boys Netflix, Amazon

While over-the-top (OTT) platforms such as Netflix and Amazon Prime are giving priority to Indian users, viewers in the country are giving preference to regional video streaming platforms, especially in times of COVID-19.

The reason is simple. Indians like to watch content in their native language.

This reason was enough for Abhishek Jain, film maker and the founder of CineMan Productions Limited and Parimal Modi, CFO, Khushi Advertising, to start a video streaming service called OHO with only Gujarati language content. The platform went live on May 7.

Talking to Moneycontrol, Modi, co-founder of OHO, said, "We thought that there is enough space for a Gujarati language OTT. There are around six crore Gujarati speaking audience in Gujarat and around one crore globally. So, we are targeting these seven crore viewers who love their culture and language."

For the launch year, Modi expects to get majority of the subscribers from the overseas market. "They are more affectionate about their language and culture," Modi said. On the domestic front, there is a challenge because of the competition from other OTT platforms.

Yet, he is confident to get on board as many as 50,000 subscribers by Diwali this year.

Love for local players

OHO's target doesn't seem to be a tall ask because regional OTT players have been able to attract more subscribers on their platform as compared to many national and international players.

Bengali OTT Hoichoi, which was launched in 2017, had as many as 1.3 crore subscribers until last September. Aha, a Telugu OTT, which was launched in February 2020, has registered 10 lakh paid subscribers.

Now compare this with national and international OTT platforms.

Disney+Hotstar, which is the leading OTT in terms of paid subscribers as it had 2.5 crore subscribers until last year. Other OTT platforms such as Netflix, Amazon Prime Video, ZEE5, ALT Balaji have 44 lakh, over 58 lakh, 18 lakh and 17 lakh paid subscribers, respectively.

This shows that there is a strong market for regional OTTs.

"Most of the regional OTTs are far ahead of Netflix and Amazon Prime Video. So, in terms of subscriber base they are big platforms. The other advantage they have is cost. Their content cost is much lower. This is a significant advantage in terms of increasing content library and keeping the users hooked on to the platform," said Utkarsh Sinha, MD, Bexley Advisors, a boutique investment bank, focused in early stage deals in tech and media.

Adding to this, Karan Taurani, Vice-President, Elara Capital said, "Typically, a Hindi web series is made on a budget of Rs 2-2.5 crore per episode and that is because of global (OTT) players entering the space. If you look at regional web series they are made at Rs 40-60 lakh per episode. Regional content cost is at 50 percent discount versus Hindi."

If we take OHO's example, Modi said that they have an in-house production team and have been able to manage within their budget. "We are planning to spend Rs 10 crore in the first year on content, tech and marketing. It is at a smaller scale," he said.

Along with low content cost, Taurani said that the regional OTTs have strong number of users coming from international markets.

International interest

"Hoichoi gets a huge chunk of revenue from Bangladesh and even Singapore. And Gujarati OTTs also have huge audience in international markets and more so in the US. So, there is hardly any distribution cost."

If we look at the newly-launched OHO, the subscription cost for Indian viewers is Rs 499 a year and for international users it is $20 a year.

This is why Taurani said that return on investments (ROIs) for regional OTTs are attractive, thanks to revenue coming from international markets and low content cost.

Content is king

While the above two aspects are making more players enter the regional OTT space, filmmaker and producer Akshay Bardapurkar, who also launched a regional OTT called Planet Marathi, said that it is good content offering by regional OTT players that is helping them attract more viewers on to their platforms.

Even the new kid on the block, OHO has interesting content plans which includes music videos and non-fictional content along with films and web series.

"We will have classic Gujarati films and original shows coming every 10th day of the month. So, every month you will have three web shows. We are also doing something with music as we saw people watching a lot of music videos on phone on OTTs and that's why we are adding that feature on OHO. We also have literature work and we want to bring that live. So, along with non-fictional shows we have fictional shows dedicated to regional literature. Overall, around 40-50 content titles will be available to users and it will be a mix of all," said Jain who is the co-founder of OHO.

Regional OTTs in demand

While the overall video streaming space is seeing growth with paid subscribers going up from 29 million in 2019 to 53 million last year, Bardapurkar thinks that going local makes a lot of sense right now than making Hindi content.

"Even if there are three Gujarati and Marathi OTTs, it will work because there is lot of content out there. Platforms like Netflix take India as one business model and they focus on the model which gives them more money. As for regional OTTs, our concentration is one particular region because that region will give us more money," Bardapurkar said.