The war for OTT dominance

While users are busy binging on OTT shows, there is an ongoing content war among competitors.

Until just five years ago, the internet penetration, compared to leading countries, was an abysmal 13 per cent with about 200 million users. Since then, a lot has changed in the way the internet is consumed and it is now a way of life, rather than a luxury.

We currently stand at about 600 million users or about 45 per cent penetration with a majority still accessing it from urban areas. However, the next wave of growth is expected to come from rural areas, which still sees only about 25 per cent internet penetration. This leapfrog change can be attributed to a sharp decline in internet access costs and affordable smartphones. Jio alone can be attributed as having led this change by offering internet at 1/10th of the pre-Jio era pricing.

Video is witnessing huge growth in consumption and it is expected that marketers will be investing incrementally in the format, which is a reflection of how consumers like to absorb content. Another example of the video explosion is understanding how YouTube has grown in the past few years. Pre-Jio (2016), YouTube witnessed about 250 million homepage views in a day; this number is now in excess of 1.2 billion per day.

A report from Zenith suggests that in 2012, the average time spent on video was a mere two minutes, which is slated to be 67 minutes in 2019. This represents a 34x growth in video consumption since 2012!

Surprisingly, or not so surprisingly, the growth is led by rural audiences who consume 65 per cent of the content. Given the rural dominance in content consumption now, it may seem feasible that 95 per cent of content consumption is of a regional nature. The stats are mind-boggling and it is no wonder that we are witnessing a war of OTT platforms.

With over 30+ OTT platforms, the players are investing huge amounts in creating content which is exclusive and appealing to target audiences. While YouTube (if it were to consider an OTT) thrives on UGC with added features and paid subscriptions, Hotstar is known for its IPL and domination in the sports category, Zee thrives on dominating with its regional content, and Netflix has premium and perhaps the largest compilation of originals globally. Some newer platforms have taken to licensing content from other platforms while producing its own as well, like MX Player.

It’s anyone’s guess as to who will lead the category, but by the end of this OTT dominance war, each player would have either consolidated, as can be seen in the international markets with Disney taking over HULU or would have established a niche content category addressing the needs of their TG.

Whether it is the audience that comes first and content customised to cater to their requirements, or content created to address non-existent needs, it will depend on the nature of the platform. In my view, audiences are prone to change their habits regularly. Content focused on addressing needs only goes so far to make any significant impact or creates the kind of enthusiasm to subscribe for a service. OTT platforms have a long battle ahead in a bid to create original, ground-breaking content which will keep audiences on their toes and wanting for more.

As per Comscore data, 95 per cent+ of the audience is active on video platforms. Do note that Comscore reports on 18+ for mobile and 6+ for Desktop. And even if it were to exclude YouTube from the equation, the top ten OTT platforms have a 60 per cent+ reach within the total Internet audience base.

Hoichoi is the first regional language OTT service dedicated to the Bengali-speaking population which, as of March 2019, was reported to have about 150,000 Unique Users and is on a growing trajectory. Shemaroo and DishTV are set to release their own platforms and Hulu may enter the Indian market too.

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Mobile service providers and cable networks had a clear advantage to leverage their licensed assets to grow a significant base early on. However, that ship has sailed and production houses have taken over to establish their own platforms. Without an aggressive content strategy, players like Airtel TV will consolidate with the likes of MX Player and offer bundled packages to increase content consumption while monetising through ads. JioTV has managed to gain a significant audience base and looks strong in the space.

It is anyone’s space and associations can change overnight. In the meantime, let’s binge watch and enjoy the show.

(Sumeet Batra is head of Digital Media Audit and Advisory at Spatial Access, a media audit firm.)