How local OTT players fare in the midst of Amazon-Netflix war game

With two global players trying to carve out space in the nascent OTT sector there’s little to no doubt that the local players will surely be strategizing their moves for their users. A look at their performance and the future

by Madhuwanti Saha
Published - Dec 26, 2016 8:08 AM Updated: Dec 26, 2016 8:08 AM
How local OTT players fare in the midst of Amazon-Netflix war game

On December 14, Seattle-based e-commerce giant Amazon introduced to its Amazon Prime subscribers and other potential users its Prime Video service with announcement of nine original series with its aggressive price point of Rs 499 per year. Though a number is not available on its curated library, but the numerous tie-ups with renowned production houses including Dharma Productions, Vishesh Films and T-Series gives us a fair idea. Next day global streaming service Netflix (which entered the market this January) announced its first tie-up with Indian production house Red Chillies Entertainment (RCE). This association will bring all the latest movies starring actor Shah Rukh Khan exclusively to more than 86 million members globally. With two global players trying to carve out space in the nascent OTT sector there’s little to no doubt that the local players will surely be strategizing their moves for their users.

Rajiv Dingra, Founder & CEO, WATConsult definitely feels Amazon’s entry has definitely made the local players sit up, “When a player like Amazon comes in with cut throat pricing it will make the other players sit up and take notice but these are short term measures. Longer game is one of good exclusive content and who can bring it to their platform earlier.”

Amazon Prime Video is definitely among the cheapest of OTT services in India along with Zee’S Ditto TV. Netflix’s subscription rates start from Rs 500 and go up to Rs 800 a month. Spuul (Rs 150 a month), Eros Now (Rs 49 and Rs 99 a month) and Hotstar (Rs 199 a month) offer some content for free; premium content is charged. Then there are ad driven players like Sony LIV and Voot among others. Are there chances of leading to a price war? Dingra doesn’t think so, “Maybe not a price war just yet. But it will certainly expand the market and get more users paying for OTT which is a great sign for the segment.”

The local players are working on their game to increase its user base. As Gaurav Gandhi, COO, Viacom18 Digital Ventures puts it, all of them have different positioning. He explains, “All the large players are coming in with differentiated content. We are offering content from television, originals and kids. Hotstar brings in their content and sports. On the other hand Netflix brings in international content and their originals. From entry point of view we welcome all the players as it only helps to expand the market.

Where each stands out

Star India’s premium streaming platform Hotstar with 130 million downloads already has the edge with its sports content through its innovation on live sports streaming that includes coverage of  Vivo IPL 2016, Rio 2016 Olympic Games, Premier League football and Kabaddi World Cup on Virtual Reality. Apart from that it also has the latest movies and popular programs which includes shows like ‘Game of Thrones’, ‘Westworld’, ‘Veep’ and ‘American Crime Story,’ available exclusively in India on Hotstar. To add to it, for its services to Apple as an over-the-top content (OTT) platform, it was named as Apple TV’s app of the year for India in 2016. 

According to media reports DittoTV had reported that its partnerships with various telecom operators and low subscription pricing are helping it to increase its penetration and user base. It claims to have six million downloads and a user base of three million.

Meanwhile, Eros Now is going steady with over 55 million users which constitutes of 2 million paid subscribers. It has deals with major telecom operators in India including Reliance Jio, Idea and Vodafone which attributes to this growth. Its recent tie-up with Vodafone Play allows the latter’s subscribers to watch Eros Now’s library of more than 14,000 titles.  According to media reports it has deals with 16 telecom operators and OEMs internationally. 

Spuul, the digital video-on-demand (VOD) platform for Indian mainstream Hindi and regional content is also growing at a steady rate with18 million active users now and over seven lakh paid subscriptions per month. It has tied up with telecoms and digital wallets to provide an option of sachet pricing for smooth overall user experience. On the content front, it introduced a tiny download feature (which allows users to download an entire movie in less than 60mb) and adding blockbusters within just a couple of months of their release.  

Spuul India CEO Rajiv Vaidya talks about its reception, “The tiny download feature has been a great hit. Having said that, consumption on our big screen apps – Android TV & Apple TV – has shot up, especially this holiday season, with the addition of some of the biggest blockbusters from last year and this year. We just released a Spuul app for Roku devices, after multiple queries that came in from our diaspora audience.”

He adds, “Spuul stands out from the competition in various aspects. A clean, user friendly UI and our deliberate choke on advertisements makes the service one that users keep coming back to. To facilitate offline viewing, Spuul pioneered the offline sync feature, which enables the user to download the movie of his choice onto his mobile device, to be viewed in low network zones or when travelling. An adaptive bit rate allows the users’ device to automatically adjust the stream quality of the movie according to his internet signal strength.”

Sony Liv, the Video On Demand (VOD) platform under Sony Pictures Network India with 27 million downloads so far, have been strengthening their content with expansion to kids with LIV Kids, sports (Copa America, UEFA Euro 2016 and Super Fight League among others) and original content offering.

Uday Sodhi, Executive Vice President & Head-Digital, Sony Pictures Networks, tells us how do they set apart, “We have a strong content portfolio. We have got the best sports portfolio in the country. We have amazing range of live television and movies. From portfolio perspective we are most complete people. We have a huge head-start over anybody else.”

Viacom18’s Voot is going strong with 15 million monthly users, 50 minutes spent by a user on an average every day and a watch time of 1.2+ billion minutes a month. Gandhi says, “Our strategy is very clear. We are saying we are the house of exclusive content from Viacom18 but we don’t stop there. We build property around TV shows. For instance with ‘Big Boss’ we have ‘Unseen Undekha.’ We do original content around our shows itself.  Then we have Voot Originals where we had great success with three of them particularly, ‘It’s Not That Simple’ and ‘Shaadi Boys.’ At this point we are the largest creator of digital content this year. Then we have the Kids play where we upped our game from 70 characters during launch to 220 characters. We continue to build and strengthen that. We are going multilingual in that as well. So we are clear on the three pillars of success and we are going to build on that. We have been voted the best app on Android for 2016

He talks about its differentiating factor, “Voot is one of the largest video destinations in the country right now, in terms of volume. Voot has also differentiated with majority of content being exclusive. We want to be a product that people watch daily. We have 95 advertisers across categories like FMCG, telecom, consumer durables and automobile on board which is going to touch 100 by end of this month. We have brands coming to us for branded content as well as sponsorship. For our upcoming show ‘Untagged’ we have Motorola as our partner.”

Future of OTT market

From the looks of it the co-existence of local and international player, each with their differentiated positioning and diverse content, will happen seamlessly. And, the OTT segment will continue to expand, given the increasing number of users and competitive internet plans.

Vaidya explains it further, “The market for OTT players providing video-on-demand (VoD) services is becoming one of the fastest growing markets today. The active OTT VoD subscribers in India are expected to increase from 12 million in 2014 to 105 million by 2020, according to a Media Partners Asia report.”

He goes on talk about the increasing video consumption and the tremendous growth potential for high speed mobile data growth, “The market potential for online content viewing is huge. Mobile data traffic grew 50 per cent in 2015, driven by 85 percent surge in 3G data traffic. This growth is largely on the back of surging consumption of videos, with approximately 40 per cent of mobile data traffic being driven by video and audio consumption. Despite this growth, 3G device penetration in India is still at 32 per cent in 2016 and of these only 38 per cent have 3G connections, indicating the tremendous growth potential for high speed mobile data growth. Broader adoption of 4G in 2016 is expected to provide further impetus to video consumption on smartphones and mobile networks. Content will decide the success of the OTT players.”

Sodhi stresses on the expanding OTT market, “Market has 150 odd million connected devices. It will touch 300-400 million in the next few years. Once that happens market is going to expand rapidly. Mobile video is probably the fastest growing segment within the content consumption and the advertising space. We are seeing significant growth and assured to be in this for the long run.”

Dingra on the other hand, believes OTT’s growth will not be bringing in large numbers despite its rapid growth in the short term, “I think OTT is the future of televised or TV like content consumption and is here to stay. Though its growth in India will be rapid in the short term it won't be having large numbers but cumulatively it could grow to be as 10 million paying users in India over the next three years. It does become a great audience pool of premium audiences for marketers.”

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