Has online video begun affecting TV ratings?

A look at what the experts from the industry have to say.

There has been a dramatic explosion of online content consumption in the last couple of years and this has been led by video, primarily. YouTube is the grand-daddy of online video and over the years it has been joined by the likes of Facebook, Hotstar, SonyLIV and Voot, to name just a few. There has been added excitement in the OTT (over-the-top) space with the more recent entry of Netflix and Amazon Prime Video in India.

To better understand the phenomenon, we asked a panel of experts the obvious and logical question - is this surge in online video consumption beginning to hit viewership of television?

Here is what they had to say:

Edited Excerpts:

Partho Dasgupta, chief executive officer, BARC India

Partho Dasgupta

Television continues to be the most effective platform for reaching a large section of viewers. TV has only been a growth story.

Let's look at it from the TV viewership point of view - the average viewership for total TV in 2015 stood at 21.2 billion impressions, which currently stands at 29.2 billion. Apart from that, even the youth (15-30 year olds) that are considered to be the highest consumers of OTT content, contribute 32 per cent of total TV viewership, the highest amongst all age groups. This too, has been growing year-on-year. In fact, youth continue to engage increasingly with television. The daily time spent watching television by this age group has increased since last year and now stands at 3 hours 34 minutes, almost on par with the time spent of the entire TV viewing universe.

As TV penetration increases, we can only expect this to go higher and the potential for this growth, in a country like India, is humongous.

Yes, consumption of OTT platforms is increasing, but there are still challenges, including bandwidth issues. According to reports, the country currently has 300 million internet-enabled mobile phones and 250 million viewers consuming online content. When compared with TV viewing individuals, there is still a long way to go for digital consumption.

TV remains the medium which attracts the maximum advertising revenues, even today. Several industry reports suggest that 45 per cent of ad-ex will be on TV. This is growing year on year. As long as the measurement issue is not solved for OTTs, monetisation will suffer and only quality SVOD platforms will see traction.

Increasing Average Time Spent per Viewer on TV (currently standing at 3 hours 43 minutes), new channel launches and growing ad-ex are just a few indicators which demonstrate robust TV growth.

Sameer Nair, chief executive officer, Applause Entertainment

Sameer Nair

Not yet, but it is beginning to distract premium audiences and attract mass audiences.

Let me tell you how...

Distraction - The recent release of Sacred Games competed for attention with World Cup Soccer, Wimbledon and yes, Sanju. Who won? It's hard to say, but attention was divided.

Attraction - My 84-year-old mother tells me over breakfast one day - 'I want Amazon Prime'... on further investigation, I discover she saw a Breathe promo on Colors and since Madhavan is one of her favourites, she wanted Prime, to watch the show.

Recently Hotstar reported that they broke a world record in simultaneous concurrent video streams, and yet, the advertising revenues for the 2018 IPL broadcast grew YOY.

Finally, my driver informed me that other drivers and security staff at my place of work have and are watching pirated episodes of Sacred Games. Good news - the content has wide appeal. Bad news - it's being pirated.

500 million smartphones, the cheapest data in the world, a huge content need gap for the giant world between Naagin and Narcos, and a very deeply connected WhatsApp universe to rapidly disseminate video to disparate audiences. Gradually, as consumers realise that OTT frees them from the tyranny of the broadcaster's schedule and the TV-set's immobility, and they come to appreciate the true value of the anywhere, anytime, long tail - pirated or otherwise - they will wonder how they managed in the first place.

But all of that is in the future. Meanwhile, no, I don't think OTT is affecting television ratings yet, but I believe it will.

Girish Menon, partner and co-head, media and entertainment, KPMG India

Girish Menon

The rapid uptake of data consumption, especially on mobiles, has led to a surge in both the number and usage of OTT apps in India. The industry has been cognisant of this pattern, resulting in a wave of OTT-first content being produced in India in the last six to eight months.

However, Television still remains the dominant mode of media consumption in the country. With more than 500 channels, with daily original programming available to the consumers for anywhere between INR 200-250 per month, TV retains a strong value-for-money proposition. In fact, with the TV penetration only at 65 per cent of the overall households in India, as per our estimates, there is still ample room for it to grow.

A look at the age-wise viewership, as per BARC, shows that TV viewership grew across all age groups and increased by 22 per cent in 2017 with the 15-30 age group also seeing a robust 20 per cent increase. This outlines the acceptance of traditional television amongst the millennials as well, who are assumed to be the early adopters of technology.

Long form content consumption on OTT will take some time to evolve given the current low level of wireline internet penetration in India. Further, continued investment by traditional broadcasters on television seeks to ensure that a large volume of original content is available across TV channels on a daily basis; volumes that OTT platforms are not able to match currently.

In fact, OTT is likely to evolve as a complimentary screen, given that more than 97 per cent of the TV market consists of single TV households, as per industry estimates. OTT feeds off of this latent demand and positions itself as an individual screen allowing viewers the flexibility of 'anytime, anywhere' media consumption over and above the traditional family appointment viewing on TV. The popularity of Live and Catch-up TV content on OTT is a testimony to this fact.

Thus, in the near to medium term future, television is not likely to be under threat from OTT, with a complementary co-existence being the most likely scenario.