Gaurav Gandhi, COO, Viacom18 Digital Ventures, looks back at the highlights of 2016 in the digital video spectrum and what to expect in 2017.
2016 was an explosive year for online video in India – both in terms of number of players arriving in this space as well as the user base and their time spent on digital video. India would easily be the fastest growing major market on digital video consumption today – especially given the growth in the last three months.
As we got into 2016, we had YouTube as the market leader and a hangover of 2015 when Hotstar announced itself as the online video destination for all big sporting action. 2016 started with a bang with the Netflix launch. Zee launched its on-demand service OZee in the early part of the year. Then came VOOT – and upped the game with Indian Digital Originals and Premium Kids content along with all the TV shows from the Viacom 18 family. Jio’s video services (JIOTV and JIO cinema) were unveiled with its much-awaited launch in September. And of-course the year ended with Amazon launching its Prime Video in the country.
The second big change this year was the rationalisation of data prices. Led by Jio’s disruptive pricing, majority of the telcos radically reduced data prices giving a huge momentum to online video consumption across markets. Furthermore, this development will enhance video consumption watch-times per session (and on an overall basis), as users increasingly start watching longer format content over cheaper data.
The year also saw some really good initiatives in the digital original content (largely in the web-series space). TVF and Voot and a few others tried to push the envelope here and had some good successes in 2016.
The kids space saw some action as well – first with VOOT launching its dedicated protected (through parental control settings) space for kids – VOOT Kids- with 100 top kids characters and You Tube Kids launching in later half of the year. Amazon Prime Video that launched this month too promises to have some decent kids’ content.
If you think 2016 was exciting, tighten your seatbelts for 2017.
Here are six things that you will see in the OTT Video space in India:
1) Even more launches: Players like Balaji ALT (with its original content line-up) are slated to launch in early 2017. Market sources say that a large southern market focused broadcaster is preparing for its OTT service launch in 2017 as well. Besides that we will surely see revamped video services from the big telcos (to compete with JIO) and even see some TV Everywhere (authenticated) services from the traditional video platforms (including a revamped service from a DTH platform that already operates such a service). I also foresee a couple of pure OTT aggregators even exiting this space – realising it’s hard (and really expensive) to do this unless you are either a content company or a technology company.
2) Online video goes deeper and more regional: Driven by even more affordable (maybe even subsidised/value bundled) data services as well as big focus on local languages (in both content and UI) will drive the online video market deeper into the country. I expect online video penetration to easily cross 200 million by end of 2017
3) Large Ad-supported OTT platforms gain advertising revenue momentum: Today each of the three large A-VOD platforms - YouTube, Hotstar and Voot - already deliver billions of minutes of watch time every month. Of this HOTSTAR and VOOT deliver this on the back of premium content with very sticky and loyal viewers (users spending 40-50 minutes per day) – giving advertisers an opportunity to do sponsorship, content integrations as well as regular ad-placements at scale. And You-Tube of-course delivers the largest audience base, even though the content is not always that premium. As the overall time spent on these services grows further, they are likely to move up the chain to be integral part of media plans from just being add-ons currently. This will further get a boost as common measurement for digital video services rolls out
4) Even more focus on original content: With at least four well-funded players having made their intent clear about their focus on original content for digital, this year will see the bar go higher on the number, scale and bets in this space. The television programming will go even more ‘center-of-plate’ driven by BARC’s pursuit of measuring the 185 million TV homes and as a result the quest for ratings in the times when rural audience weightage is roughly 50 per cent to total ratings, will lead to the top 20-30 million Indians turning to the digital platforms to seek the stories that they can connect with and relate to. This is quite a big opportunity here for some breakthrough content and we can expect more mainstream large content creators getting into this space this year.
5) Subscription services will start to get some traction: There are a variety of factors that will help the Subscription services to get some traction in 2017. The biggest one being the coming of age of digital payment ecosystems (helped immensely by the recent demonetisation). Continued focus to create original Indian content for the digital audiences, get the international series day and date (without cuts) and film premieres just after theatrical will all help build a case for audiences to pay. As OTT services reach the living room (and go beyond phones) and hi-speed broadband at fixed monthly price points become a reality, a discerning set of viewers will start paying for premium, original, ‘un-cut’ and ad-free content. Of course this market is likely to be small at start, but will start to grow rapidly.
6) A sharply segmented demographic focus: This will happen at two levels – the first being the increase in the diasporic footprint and second being the emergence of rural consumers. 30 million overseas Indians (including NRIs & PIOs) have always been a lucrative market for entertainment. It was first the movies and then the Indian TV stations. Over the years, the highly priced cable packs, limited choice of content and absence of legitimate on-demand options for Indian content gave pirates the opportunity to tap into this market. We already see the platforms around the world trying to address this, but this year is likely to see the big four Indian broadcasters who run their OTT platforms in India (and control majority of the premium Indian IP) to create innovative strategies to directly reach this large audience base that has a propensity to pay for content. Furthermore, while the Government’s Digital India initiative aims to deploy the National Optical Fibre Network (NOFN) providing broadband connectivity to cover 250,000 gram panchayats, and telcos and technology companies focus on closing the last mile gap, it is content creators like us who will have to dial up our offering (both product experience and content) for this segmented market.
All of the above are likely to make 2017 a ‘coming-of-age’ year for online video in India.
(The author is COO, Viacom18 Digital Ventures)
Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com