2018: A year of large-format digital shows and tier-II & III audience

Success of original shows such as ‘Sacred Games’, ‘Mirzapur’ and ‘Karenjit Kaur’ suggests that online viewing audience are slowly lapping up digital content from OTT platforms

Yearender

Revenue contribution of $500 million, online viewing audience count of 225 million and 32 players-- the figures of the over-the-top (OTT) industry in 2018 might not be eye-catching yet, but certainly can’t be overlooked. The Indian OTT space has shown good growth in the last five years and national & international players are now vying for a piece of the market that is slated to expand to $4.5 billion-$5 billion in the next five years, according to BCG Report ‘Entertainment Goes Online.’ 

This explains the success of large-ticket original shows such as ‘Sacred Games’, Mirzapur’ and ‘Karenjit Kaur’, even though catch-up TV, latest Bollywood movie premieres and live sports are the biggest drivers. Year 2018 saw most players like Netflix, ErosNow and HungamaPlay launching their originals such as 'Sacred Games,’ ‘Side Hero’ and ‘Damaged’ among others.

Sameer Gogate, VP-Business Development, Vuclip (that has Viu), says that 2018 has been a great year and it will get only better now. “It’s been a great year for OTT. As penetration goes deeper, it’s only going to get better. As far as content is concerned, original story is totally working for us as well as in all the markets. As we can see from the reception of shows, a good story resonates very well with this TG of 18-24.”

Ajay Chacko, Co-Founder & CEO of Arre, says, “Till last year, people talked about social media and search behemoths as big places for content. Now, they are stuck to user-generated content model. Also premiumisation of content leading to large format shows has been the driver. This has resulted in OTT players getting more traction than social media giants.”

As a result of the trend, players such as Amazon Prime Video India, Voot, ALTBalaji, ZEE5 and HungamaPlay are scaling up fast. For instance, ALTBalaji scaled its content library by double in 2018. Mid-2018, Voot announced a slate of 18 Originals with diverse genres ranging from comedy to thrillers. ZEE5 released 15 originals across six regional languages.

Investment is also increasing at a fast pace. In addition to live sports rights, the nature of shows produced is also evolving—tent pole properties built for OTT are being created at a per hour cost that is 3-4 times more than the cost of traditional TV content (according to BCG Report). The need to differentiate to attract eyeballs is leading to aggressive bets on original content.

The report also mentions that most consumers (81 per cent) have up to three video/OTT apps on their smartphone. Further, all platforms struggle with retention of consumers—on an average 50 per cent of OTT apps installed are uninstalled within the first seven days of installation. That’s one challenge all platforms are grappling with.

Telecom partnership offering more reach

2017 and 2018 saw telecoms service providers such as Vodafone, Airtel and Idea taking to aggregator models- aggregating content across multiple platforms like ALTBalaji, Hooq and Eros Now and providing a payment interface. They are also leveraging access to other OTTs as a differentiating factor to drive consumer retention and acquisition.

This is a much preferred mode of distribution than the slow pace of organic subscription, according to industry experts. There was also aggressive partnerships between video streaming services and smart TVs and digital wallets.

Sunil Lulla, Group CEO, Balaji Telefilms, says, “To amplify the reach of content, ALTBalaji was the first OTT platform in the country to partner with telecom service providers like Jio TV/ Airtel TV/ Vodafone Play, amongst others, to get mass distribution by bundling our content into these services.”  

This is resulting in increased watch time. “We have seen the average watch time on telecom platforms improving, where consumption of longer formats is increasing as compared to 3-5 minute video clips in the past. The OTT platforms have an average watch time of nearly one hour a day which is significant,” he offers.

Sahil Shah, VP - Media and Operations West, Watconsult says, “Telco partnerships for almost all OTT players have got in additional volume of users which should contribute to 20 per cent of their total user base. Yet what’s interesting to note is that the time spent and usage of these new users are highly content driven. And so all OTT players are working the hardest on content. OTT viewership in India should reach the 350 million mark by 2020, with telco and OEM partnerships sourcing a decent part of the growth. Yet, usage & time spent at scale will depend on the breadth and depth of content an OTT player has to offer in a fiercely red ocean environment.”

Who is watching what?

The OTT consumption still remains a relatively urban phenomenon with the top 8 to 10 cities in the country accounting for bulk of the viewing and subscriptions. However, a number of smaller cities and towns often come in the top 25 to 50 list.

Even Chacko observes the emergence of increasing consumption from tier-II and III cities, especially after Jio disruption, is something that he has witnessed in his own content as well. “It has become fairly democratic. Our shows, which earlier had 3-4 million viewership per episode, are now getting 12-13 million viewership. And this increase has come mostly from tier II and III cities. It’s not as much as a demographic shift as much it’s psychographic or geographic,” he points out.

Karan Chaudhry, President and COO, TVF, that offers mostly youth-centric content, agrees with Chacko. “There has been a huge spike in the Tier II and Tier III city viewership for our content which mimics the internet penetration growth in our country,” Chaudhry says. The platform has seen a primary growth in the 15-35 year old segment (more in the 15-24 segment).

Siddhartha Roy, COO, Hungama Digital Media, too believes that Tier II and Tier III cities have shown good growth. “Metros, Tier II and Tier III cities are all consuming content on our service at an unprecedented rate, with Tier II and Tier III cities registering more than 50 per cent growth over the last year in terms of content consumption.”

The demographic of the audience for most of the platforms has mostly been between 15 and 35 years, with men dominating the lot at 60-70 per cent. This has led to production of male-oriented dark, gritty, thrillers and gangster-dramas like ‘Sacred Games’ (on Netflix), ‘Mirzapur’(on Amazon Prime Video India), ‘Apharan’(on ALTBalaji) and ‘Rangbaaz’(on ZEE5).  

Lulla gives an idea, “The urban male audiences prefer political, thriller and crime genres such as our latest series Aphara..  On the other hand, the females in general across urban and mass segments prefer romance drama genre like ‘Haq Se,’ ‘Broken But Beautiful’.”

HungamaPlay has viewers coming for its non-Hindi content. “Over 48 per cent of our users consume non-Hindi content. Punjabi, Tamil, Telegu, Marathi, Bengali and Kannada are the most consumed languages with Bhojpuri, Malayalam and Gujarati becoming popular as well,” says Roy.

On the other hand, Viacom18’s online video-streaming service Voot, known for its content segments and originals, has more female audiences. Akash Banerji, Head Marketing & Partnerships at Viacom18 Digital Ventures, shares, “It has increased from 30 per cent to 51 per cent. Generally, 55 per cent audience is below 24.”

A promising future

It’s only going to get bigger from here with more money to be pumped into production. Chacko expects the number of original hours to increase to 1000-1500 in 2019 from 600-700 this year.

It will also set in a viewership pattern for the platforms, remarks Girish Dwibhashyam, Content Head, Spuul. “2019 will be a year which sets the tone of the future viewership pattern of content in India. A lot of experimentation, which is underway by content creators and OTT platforms, will see their outcome and both creators and platforms will discover what viewers really want and what they don’t.”

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