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India’s OTT space will be ad-driven business in future: Uday Sodhi, SPN

12-October-2017
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India’s OTT space will be ad-driven business in future: Uday Sodhi, SPN

In this year’s edition of exchange4media Mobile Awards – The Maddies, Uday Sodhi, ‎Executive Vice President and Head - Digital Business - ‎Sony Pictures Networks India Private Limited (SPN), in a fireside chat with Anurag Batra, Chairman & Editor in Chief, BW Businessworld on the ‘Programmatic best practices for a smoother and more rewarding experience’ forecasted that OTT space will remain ad-supported for a very long time.

He explained by sharing the challenges in the current ecosystem, “In India, it’s an impossible task to collect money on an online service on monthly basis. The friction in payment is significant. It’s slightly different from the rest of world also were paying for a subscription is part of people’s habits to get charged on their credit cards by vendors on a monthly basis. How many services do we allow that in India? You don’t allow your electricity or a telephone company to do that. So how are you going to allow an entertainment company to charge you automatically on a monthly basis? So in future, I see this as an advertisement-driven business.”

Sodhi added another reason from a payment perspective. During the chat he shared how in the other parts of the world Video on Demand (VOD) is supported either by transactional (pay-per-view) or monthly payment like Amazon or Netflix. "The advertising-supported model in India is unique. Because the payment ecosystem is very different in India the ad-supported model is what works here. So it will remain an ad-driven-supported model. You will see that grow at a very fast pace.”

The conversation started with numbers. With less than two per cent of advertising spends on mobile, Batra posed the question to Sodhi on its future, “Where in five mobile marketing would be in terms of spends?” Sodhi answered, “Today the entire ecosystem of digital video has 150-180 million odd consumers connected to 3G or 4G and has smartphones. That number will grow at 3X in the next few years. That’s half a billion users. So we are talking about a consumer base which is almost 2X of what the US market is today. So the market size will be significantly larger. As platform owners and market solution providers what’s important is will be able to provide solutions to advertisers and advertising partners at that point in time will the medium be large enough for mainstream advertising? We will see that huge swing. In last two years, we are seeing that OTT and digital window are becoming mainstream to most advertisers. A lot of campaigns are going digital first. The way advertising is targeted just changes the moment you have mobile in your hand. It’s the only entertainment device you carry with you 24*7.”

With BARC planning to get into digital measurement (which Batra described as a game-changer in Indian mobile and digital advertising world), he wanted to know if this move will help in the growth of this space. Sodhi answered, "Today BARC or no BARC today most advertising is being bought by advertisers on a real-time measurement basis. There is enough and more measurement available in the ecosystem. We have been monetising our platform by very sophisticated measurement, targeting and reporting techniques. But BARC is trying to solve the issue of an industry-wide template where everybody speaks the same language and everybody’s measurability is comparable to other. Hopefully once BARC raises that thing our ARPUs coming in from advertising will go up far more.”

Discussion then moved to ad-block where Batra asked Sodhi how publishers are dealing with it and educating the advertisers on it. Sodhi pointed out that he is seeing more interest by advertisers to integrate their brands into their (Sony LIV) content. "We encourage lot of advertisers to be part of the content. It gives far more value and far more credibility.”

Sodhi also pointed out that print will move to video at some point in time if the scale has to be as it opens up larger market for consumption and advertisers Social responsibility of OTT platforms was also talked about. Batra enquired about the social impact of the growth of mobile content. Sodhi assured saying that they (Sony LIV) are putting in checks, “All the content in Sony LIV that we think are not appropriate for anyone below 18 goes behind a paywall. As responsible content players we are setting filters ourselves.”

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