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Global markets: The next frontier for Indian OTT platforms

10-May-2017
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Global markets: The next frontier for Indian OTT platforms

The time is ripe for Indian over-the-top (OTT) players to enter the International market with a subscription-based video on demand (S-VOD) model. The spring in their step comes from the global consumer spending on S-VOD services which is expected to total USD 18.7 billion in 2017. It is an increase of 28 per cent from 2016, according to Gartner Inc., an information technology research and advisory company.

These statistics have been exploited by Eros Now and Spuul, who have a significant international presence and are cashing in on the Indian diaspora. Viacom 18’s OTT platform VOOT is all set to make its international debut this year. According to media reports, even Hotstar will enter the international markets soon. B4U is also expected to launch an OTT, catering only to international audiences.

European and North American users reportedly have higher chances of paying a subscription fee for OTT content. Gaurav Gandhi, COO, VOOT, says that when OTT players from India enter the international market, companies will largely follow a subscription-based model and depend less on advertising for revenues.  

The creators of Spuul started out with a single-minded agenda to reach out to the diaspora audience and have been rewarded handsomely in terms of revenue and viewership. “95 per cent of our revenue comes from subscriptions. Revenue from countries like Pakistan, USA, UK, Australia and countries in the Middle East contribute to nearly 50 per cent of Spuul’s revenue,” said Rajiv Vaidya, CEO, Spuul India.

While Indian users of OTT platforms are still averse to S-VOD, Indian OTT players could foray into the international market with their library of regional content that has a huge demand among the Indian diaspora, to grab a piece of the S-VOD spending pie.

For Spuul, the S-VOD model has contributed towards significant revenue generation from outside India and has helped Spuul break-even and turn cash positive. According to Gandhi, the average revenue per user (ARPU) in the international market for television is around USD 3-5 per channel. In comparison, the monthly ARPU in the Indian TV market is around USD 3-4.5. Therefore, the opportunity for Indian OTT players in the international market is huge.

“The cable providers around the world do not carry the wide-ranging TV content that is available in India, that gives OTT players like us an opportunity,” says Gandhi. In addition, with users moving away from traditional television, Indian OTT players have a chance to serve engaging content to users who are already familiar with OTT platforms, he says.

The opportunity does come with its set of challenges, “We need to see to it that the consumer buys multiple services individually as opposed to one cable operator providing these 5-6 channels,” says Gandhi. Vaidya says that another challenge is the high consumer acquisition cost, which would reflect in the marketing budgets of the OTT players.

Both feel that there are different models that OTT players can employ to offset the challenges. “OTT players could provide a traditional platform like a Dish TV in the US, OSN in the Middle East or a Starhub in Singapore. They can offer their customers a wide-range of VOD libraries from Viacom 18, Star, Sony or Zee. There could be partnerships with global telecommunications companies and finally it could be completely over the top where individual players have separate apps,” Gandhi says.

He suspects that when the time comes to go international, there could be a chance for collaboration among OTT players; something that is hardly seen in the Indian market.

The opportunities for regional content are plenty as well. Co-founders of YUV, an upcoming regional OTT player from Tamil Nadu, B.S.Radhakrishnan, GauthamSwaminathan, both feel that the international market will embrace Indian OTT players, give the range of regional content libraries available on platforms. According to Vaidya, content in languages like Tamil, Telugu, Punjabi, and Gujarati are most popular among the international audiences right now.

VOOT is currently working with its media distribution entity ‘IndiaCast’ to make firm plans for their journey ininternational markets this year.

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