The trends that will define OTT industry in the coming years

Guest Column: Kaushik Izardar, Executive Director - EORTV Media, shares insights about the four new realities the OTT space will witness in the new normal

e4m by Kaushik Izardar
Updated: Jun 29, 2020 3:41 PM
Kaushik Izardar

Suddenly Komolikaka swag has been replaced by Haathi Ram Chaudhary’s robust avtaar. Watching Asur on Voot gives you goosebumps and waiting impatiently for the next season of The Family Man is the new normal. How quickly we have adapted ourselves to the new normal is worth being applauded. No longer do you see people navigating between Star Plus, Colors, Sony, or any other channel, which they used to watch religiously. What has happened to the viewers and what has caused this sudden transition? Party animals no longer want to hit the dance floors and workaholics find working from home a safe option. What our generation is witnessing has gone down in the history and the ages to come shall remember one word for sure and that is “LOCKDOWN”.

Lockdown has made one thing clear that a man should be ready to face contingencies in life. Who would have thought that one fine day the Prime Minister is going to address the nation and from the next morning the streets shall be deserted and the offices shall be empty?

Social distancing is one word that everyone abides by and staying indoors is more than just a need. What do you expect people to do in such sombre times? Either they can listen to the same news on different channels or they can explore some exciting and fascinating series on OTT media. People have found comfort in binge-watching their favourite series on different platforms because these series have a limited number of episodes and have an engulfing plot.

As per the data shared by Broadcast Audience Research Council India (BARC India), there was an increase of 5% in the viewership between March 13-March 19. Be it watching the content on TV via fire stick or watching the original content, the data says that the increase has been 5% and 10% respectively during the lockdown phase.

But despite this, people have found out ways and means to stay active, happy, busy, connected, and entertained. For this reason, there has been a sudden spike in the over the top (OTT) viewership since the first phase of lockdown began in the country. Data says that there has been almost a 20% increase in the viewership during the pandemic.

This coronavirus lockdown has brought about a paradigm shift in the entertainment industry with OTT (over-the-top) platforms seizing most of the opportunity. This consumer-centric and digitally-driven industry is one of those sections of the entertainment world which has done extremely well even in the current situation. As the need for social distancing intensified and lockdown extended, the viewership of major OTT platforms surged exponentially. It is chiefly attributed to the shutdown of multiplexes, shoots of TV shows, and other avenues of entertainment.

Amidst this lockdown period, these OTT platforms have taken the responsibility of satiating the increasing entertainment appetite of audiences. They are catering to the pent-up demand of audiences who have been ousted from the pleasure of new movie releases by constantly providing fresh content on their devices without disobeying the norms of social distancing. Web shows have become an escape point for viewers to ward off the boredom of being confined within their homes. Besides, these platforms are also rendering a sigh of relief to producers and filmmakers by allowing them to keep the show business running and providing them with enormous reach even in these horrendous times. 

EORTV is a niche platform and an upcoming premium OTT platform has content lined up focused on LGBTQ and other hormonally-challenged societal communities and to germinate an acceptance for the LGBT community by eliminating any kind of biases based on gender stereotypes and sexual orientation(s). This subject has been touched by few and the stories are very fun-loving, contemporary and in an acceptable zone. We believe not only this time, but good content will also always have an edge. 

Undeniably, the lockdown has been a boon in disguise for OTT platforms. Some experts say that owing to the potential threat of coming in contact coronavirus, people may not engage in group activities like watching movies in theatres for quite a long time. On the account of given circumstances, it seems like producers have started acknowledging the power of these platforms in terms of distributing content and reaching to a larger section of viewers. Probably, that’s the reason why instead of waiting, they are willing to release their movies on these platforms. 

It has almost been 5 years since OTT industry came to existence but it never posed any sort of threat to the business models of theatres or multiplexes till the last year. In the present situation, digitally-driven OTT platforms surely have an upper hand. This has prompted some experts to show their concern over the future of movie and theatre business due to the fact that digital releases do not draw returns as much as theatrical releases. 

However, some predicted that the consumption patterns that they are experiencing right now are not likely to stay after things get back to normal and people resume their regular lives. Even though OTT platforms offer convenience and control to watch any show at any time, it cannot be compared with the pleasure and experience of watching movies on big screens. Also, many research studies have proved that viewers usually prefer fresh and original content, which may persuade movie buffs to step out of their house and watch films in theatres. 

Moreover, the structure of the content that these OTT platforms offer may work against themselves. Typically, most of the content streaming on these platforms consist of start, middle but no end, until it is a movie release. It goes and goes, episode after the episode, and season after the season. While on the other hand, the movies that release in theatres gives the sense of finality, that too, in a limited time. This could also be a driving force for audiences to visit theatres. Thus, what we believe to be the strength of the OTT industry, may turn out to be their drawback. 

Considering all these factors, combined with the small share of revenues that these platforms generate, it can be said that it is improbable for OTT industry to threaten the theatre and movie business. Therefore, uncertainty looms over the disposition of OTT industry after the lockdown comes to halt and everything goes back to normal. 

As per given the new realities, the OTT industry is expected to go through four trends in the approaching years.

First: Film Makers continue to release on OTT Platform with an added production margin and don’t spend on P&A (an Akshay Kumar film typically goes at Rs 65-70 cr for Digital Rights whereas during this lockdown his film Laxmi Bomb went at a whopping Rs 125 cr approx on a digital platform.) 

Second: The release of mid or low budget movies on OTT platforms. 

Third: The third one is the change in the economic model of film-making as movies could be made under a budget so that producers will not have to suffer much loss if it gets a digital release (if a movie is produced at Rs 25-30 cr. It will be always advisable to sell it to the OTT platform with some margin and get the monies recovered rather spending more Rs 10 cr on P &A and releasing in theatres and wait for the luck to favour you)

Fourth: The consolidation of OTT platforms. Some experts also believe that most of the entertainment avenues shall co-exist in the future by feeding each other and independently serving their goal. 

Furthermore, these streaming platforms usually do not embrace the conventional advertisement-based revenue model. This implies that they have to count on cash that may lead to high debt for companies. Therefore, given the growing competition, the platforms with strong economic backing, strategic investors, and a robust team of corporate communication are likely to survive and gain an edge over those with lack of proper economic structure and other advantages.

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