With the rising number of digital platforms and the audiences on them, the mindset of making cheap content for digital is fading out.With an increasing focus on original content, input costs for platforms are set to rise manifold. According to KPMG FICCI Report 2017, on an average, 20–30 minutes of fictional digital content can cost anywhere between Rs. 12–15 lakh, which is higher than content costs on television. Both Netflix and Amazon Prime Video have set aside Rs. 2,000 crore each for acquiring content to attract customers, according to recent reports.
Industry sources have mentioned there has been a stupendous rise in the costs of a 1-minute video from Rs. 5,000 a year back to Rs. 30,000–40,000 today. A five-minute video can set back a content creator by Rs. 5 lakh. Arre’s web series ‘The Real High,’ an eight-part travel series went up to a crore.
VinayPillai, Co-founder, Dekkho says, “You can make interesting and immersive content without spending an insane amount of time. In the long-form content, you are probably going to have to spend the same amount of money as television. If you create good content by spending good money, it will work better. That’s a tried-and-tested model.”
Pillai adds, “Creators who are making cheap content are facing backlash and not getting viewership.”
There’s a huge number of audience watching content on mobile phone and large TV via Apple TV or Chromecast at the same time.
Going by the numbers, the assumption that digital is a fast and cheap medium is becoming a myth. NandiniMansinghka, Founder of The Booster Network, agrees and says that the idea of digital being a small screen has to be done away with.
Mansinghka points out bluntly that consumers are not willing to compromise on production quality. “We need to be aware of the quality when creating a web show and it can’t be lower than TV. Depending on the kind of subject matter you have, you will be required to match up to film logistics,” she said.She also noticed some players smartly using storylines which don’t use a background leading to lower budgets for the show.
Ashwin Suresh, Founder of Pocket Aces, thinks otherwise. “When you create content at a scale of an Amazon you need to attract a lot of audience. Storytelling has to cater to several types of demographics. If companies are able to do things cheaper than TV and bring in audience then it’s not really a myth,” he says. He gives the example of a show from DICE Media called ‘Little Things’ which had a reach of 3.5 million per episode. He adds, “Our data shows people don’t care about production quality as long as the sound quality is good.”
Most importantly, digital gives content creators the leverage to experiment with format according to their budget. Pillai says, “AIB tells a great story in 5–7 minutes. Hence, they spend lesser on production.”He points out that there will be always be space for niche and amateur content because it’s a refreshing change.
All experts point out that customer acquisition is the biggest challenge as it is expensive and a long-term game. Mansinghka says, “To get your customer and retain them is a long-term process.”
Pillaiadds, “If you are trying different formats of content which are more user generated and for social media witha low budget, it will work. If you are looking at the user to pay or be invested in long format, you have to spend.”
Suresh points out another challenge. “Producing at a low budget is getting harder because of the rising talent costs. These are the problems faced more by small indie players like us. There’s a dearth of good scripts with new-age content,” he says.
Content acquisition costs of online streaming giants like Netflix and Amazon Prime Video are mindboggling. A point in case is Netflix which signed deals with Bollywood stars Shah Rukh Khan and Aamir Khan for satellite and digital promotion and streaming for their next ventures. According to industry sources, Netflix is paying Rs. 15–20 crore for a film starring either. There are also reports of Aamir Khan selling digital rights to all his films exclusively to Netflix for Rs. 500 crore.
Mansinghka believes that the big players understand the game but she is more concerned about the mushrooming digital platforms. “Amazon and Netflix understand that they have to pay for content. But there are a large number of players who have hardly kept budget for content acquisition and depend on revenue sharing for getting content. That’s a myth,” she says.
She is clear that running an OTT platform is as expensive as running a TV channel. “I think the final cost of putting it together, bringing in viewers and making it profitable is a game of Rs. 100 crore. Unless you have that in your kitty, you will not be able to fight the biggies,” she says.