How are OTT players fighting the distribution challenge?

For now, telcos have emerged as one of the most viable distribution partners.

Online video platforms today have started to spend hefty sums to ensure they are offering premium quality content to consumers. A year ago, Karan Johar said in a press conference, "What fails to become a feature film or a TV show ends up being a web-series." That's certainly not the case anymore. Today, Big Synergy, which produces Kaun Banega Crorepati, or EndemolShine, which gets Bigg Boss on TV, are devoting workforce to creating quality shows for online platforms.

But that's just one part of the story; the other part is to take the content to the consumer who then needs to consume it so that the platform can recover the cost of creating it. Then there's also the distribution challenge. India is a country with a huge population and by the end of 2018 we are expected to have 530 million smartphone users (Zenith report). Currently, there are about 350 million smartphone users and 450 million internet users (IAMAI). Despite that, the most viewed video on YouTube in India could only fetch 22 million views in 2017; not even 10 per cent of the total internet ecosystem of the country. YouTube is an open video-on-demand platform and if 22 million is the benchmark on Google's platform, then distribution is a challenging piece that's currently hiding behind rosy PR growth headlines.

Both, subscription-based video- on-demand (SVOD) and advertising-based video- on-demand platforms, at this stage, are looking for available avenues to reach out to consumers.

Nachiket Pantvaidya

"OTT distribution strategies have two parts: one is distribution for revenue and the other is for reach," explains Nachiket Pantvaidya, group chief operating officer, Balaji Telefilms and CEO ALTBalaji.

"We target the urban masses of India with our content and we understand that to reach out to that target group, we need to have a robust distribution strategy through various partnerships. Like it is for TV content distribution, where you partner with cable operators (DEN, Siti Cable etc.) and DTH operators (Tata Sky, Dish TV etc.), for over-the-top content, you have to partner with telcos (Airtel, Jio, Vodafone etc.)".

ALTBalaji is an SVOD platform, which means consumers need to pay a fee to access content; yet, to ensure that it is reaching out to maximum consumers, the first three episodes of its shows are available on YouTube and Facebook. "Once they have sampled the content, only then will they make an effort to download the app and subscribe to a plan. Also, we don't want to spend on marketing to pull in consumers; for us, marketing is pushing our content to them. Putting three episodes for free streaming on YouTube, is a part of our marketing strategy," asserts Pantvaidya.

ALTBalaji content is available on Vodafone Play (Vodafone's OTT platform) and Jio Cinema (Jio's OTT platform); telecom subscribers of these networks can easily access content and do not need to pay a subscription fee. So, is it not a loss for SVOD platforms? "In India, the hard reality is that revenue comes from distribution and very little from subscription. For substantial revenue to come in, consumers need to get used to the OTT ecosystem and the OTT players need to have big enough libraries. I do not see that happening before the end of 2019. At this stage, telco distribution is a viable source of revenue and by the end of this financial year (April 2017 - March 2018), we plan to have a presence in the major telecom networks in India," informs Pantvaidya. In the next 12 months, ALTBalaji plans to get 22-25 million consumers to sample its content through the telcos.

What is the telco-platfrom partnership like; who pays who? "There is no fixed MRP; the pricing varies from deal to deal. Our partnership with the telcos is like that of a shopping mall and its shops. The telco is the well-built mall and we are putting up a shop in that mall," explains Pantvaidya.

Telecom service providers want consumers to consume data and that is why they want all the content creators to partner with them. On the other hand, the content creators want to reach out to more and more consumers and that's where telcos come in. Who pays who depends on the nature of the deal and the number of views. It's not just ALTBalaji that has its content available on telcos; there are many other SVOD platforms which do the same.

Hotstar keeps its premium content available for Jio TV consumers, Hooq has its content available on various telcos and recently, Amazon Prime Videos partnered with Airtel TV through which Airtel Postpaid consumers, with a plan of Rs 499 and above per month, can access Prime Video content free for a year.

Vijay Subramaniam

Uday Sodhi

"This exclusive offer enables us to reach Airtel's significant customer base across the country, providing entertainment anytime, anywhere on a reliable service with great playback quality and low data usage," says, Vijay Subramaniam, director, content, Amazon Prime Video India.

Sameer Batra, CEO, Wynk, adds, "This partnership is a major milestone in Airtel's endeavour to build a world-class content platform. With Airtel TV, we are stepping up the value proposition and offering a complete digital entertainment experience to our Postpaid and Home Broadband users."

It's not just SVOD but AVOD platforms as well that distribute them through various avenues and telcos are one of them. "For us, it's important to be a part of the device that consumers are likely to use to consume our content," says Uday Sodhi, head, Digital Business, Sony Pictures Networks India.

By devices he means Television sets, smartphones, tablets et al; the OTT platforms partner with the gadget manufacturers to have the app pre-installed on the device which enhances the possibility of the consumer using it. "With Liv, being a part of Sony, we are in a unique position because of the group's presence in the TV and mobile phone markets. But it's not only Sony Bravia TV sets or Xperia phones that we are on, we do a lot of partnerships beyond that as well," says Sodhi.

"We are primarily an AVOD player and it is very important for us to be in an environment that the consumer is comfortable with and that is why we are there on Airtel TV and looking at other telco partnerships too," he adds.

Most of the major AVOD players (aside from YouTube) in India are the digital extensions of traditional broadcast networks (Star India, Zee, Sony, Viacom18, SunTV) and they ride on catch-up television and original content with brands embedded in them. AVOD players have now started selling catch-up content on digital separately and the brands associate with them on a pay-per-view model. (Unseen Undekha, Cutless, Bigg Buzz...a look at VOOT's Bigg Boss strategy.) This means that the more views a video gets, the more the platform earns and that is why distribution plays a vital role.

AppleTV, Roku, Amazon Fire Stick and Google Chromecast are the other distribution avenues for digital players. These are devices that enable consumers to cast content on larger screens. In other words, these devices can turn a normal TV into a smart TV. "ALTBalaji is on the Amazon Fire TV Stick and Roku and the partnership helps us to take our content to the international consumers," says Pantvaidya. "A lot of consumers like to watch live-action and films on larger screens and that is where Amazon Fire TV Stick and Chromecast help Sony Liv," Informs Sodhi.

At this stage, being everywhere seems to be the strategy, but as supply and demand grow, it will be interesting to see how the tables turn.