Indrani Sen: The new kid on the media block

By Indrani Sen

The digital video entertainment is the new kid on our media block. Indian broadcasters, production firms, telecom operators,  video on demand players as well as international players are all crowding the in the space vying for a share of the rapidly growing segment.  Every business publication as well as industry websites have been carrying news and views on the topic. Broadcast Audience Research Council (BARC) has already announced their intention of starting measurement of digital viewership from end of 2016. Shuchi Bansal,  Media, Marketing and Advertising Editor of Mint recently reviewed the Indian Video on Demand (VOD) market scenario in her article “Video on Demand services set to explode in 2016”. (http://www.livemint.com/Opinion/k18JBjPyvSD7BZSgJcFjQK/Videoondemand-services-set-to-explode-in-2016.html). The lead-in to the article read “What is happening in video-on-demand services sector right now is similar to what happened to private satellite television in India in the early nineties” It will be interesting to wait and see if her premonition comes true, as this time the success of the new players reaching out to the consumers through mobile platform will result in a total churning of the Indian TV scenario and may lead to the death of many smaller TV channels.

Of course, the big TV players will not be affected as they are all jumping into the brand wagon of video on demand (VOD) or digital video entertainment to ensure that if the audience viewership shifts from large screen to small screen, their revenue goes from one pocket to the other. Star India was the first mover with the launch of Hotstar in February 2015. In first nine months, Hotstar earned the distinction of being one of the fastest growing mobile digital services across the world with 40 million consumers downloading it.  Balaji Telefilms followed suit with announcement of the launch of ATL Digital Media in April 2015. Eros Now from Eros International which had launched earlier in 2012 as an on demand digital movie library expanded their offer in 2015.  Airtel Digital TV was another early mover in this space from 2012 and tied up with Disney India in 2014 to launch an English Subscription Video on Demand (SVOD) Service – “Disney Family Movies”.

Notable among the others players who entered the Indian market last year were Hooq, Sony Liv and Yuup TV. Hooq, backed by Warner Bros., Sony Pictures and Singapore telecom giant Singtel offered Indian audience Hollywood content from Sony, Warner, Disney, Dreamworks and Miramax along with Indian content from leading banners. Multi Screen Media’s video on demand service Sony Liv rolled out before the festive season in 2015. Yuup TV with their offer of Live TV, Catch up TV and unlimited movies also entered India last October.

In January 2016, Netflix, world’s leading internet television network, entered the Indian market. After the early move by Star India in 2015, Zee Entertainment Enterprises Ltd (ZEEL) and Viacom took one more year to put their act together.  In February 2016, ZEEL launched their new video on demand platform OZEE earlier this year. In keeping with their business strategy in the linear TV space, Zee Group has entered this new space shooting with a double barrel gun. Apart from launching OZEE, ZEE New Media also launched Ditto TV, India’s first Over The Top (OTT) TV distribution platform. Ditto TV plans to offer live TV channels and on demand video content to consumers through all types of screens, connected TV, desktops, laptops, Tablets and smart phones. Viacom 18 Digital Ventures is planning to launch their VOD brand called VOOT by end of this month. Various start ups like Arre from UDigital Content Pvt. Ltd, promoted by Ronnie Screwvala and B. Saikumar are also crowding in this space. Recently launched Vodaphone 4G LTE service offers VOD services like HOOQ and Hungama Play among other facilities.

The two major Dish TV operators chose different marketing strategy for entering OOT TV. Dish TV launched Dish Flix in 2015 with a separate hardware along with a monthly subscription fees for watching ad free movies. Tata Sky is inviting their consumers to set up VOD services by connecting their internet to the TV set which is included in their subscription package. Quicker Entertainment is offering movies on demand to Cable TV operators which may help cable services to get additional revenue.

There is no doubt that we have now an ecosystem that supports VOD platforms with improving bandwidth and increasing smartphones. The young Indians who prefer entertainment on the go rather than appointment viewing on linear TV are turning out to be the early adopter of digital video entertainment.  Low percentage of multiple TV households will help in adoption of personal devices for finding individual solutions to entertainment. Our e-commerce system is also ready to support the transactions.

The real challenge for all the players is two fold. Firstly, they need to find a sustainable monetization model. Three  types of business models are currently operating in Indian VOD market-  (i) Subscription supported video on demand (Airtel, Tata Sky, Dish Flix, Quirk Entertainment, Netflix etc.), (ii) advertisement  supported video on demand (Hotstar, OZEE, VOOT,  You Tube, etc.) and (iii) transactional video on demand (pay per view).  Some of the subscription based models are offering ad free viewing while the others are combining subscription with advertisement support (Balaji ATL). Some are trying out the Fremium revenue model. However, time will only tell how Indian consumers with their penchant for consuming free content on internet and used to free downloading via Torrent will react to paying extra for digital video entertainment. Secondly, the heterogeneous Indian market makes it difficult for the VOD players to offer an ideal package of quality content to the consumers for which they will be ready to pay.

While many advertisers have already started experimenting with this new medium, the industry is now eagerly waiting for the BARC inputs to legitimise their expenditure. The large VOD players also need to build up their own analytics based on data generated by mobile users. Personalisation of VOD offering based on consumer insights will become a key differentiator which will make this medium stand out from other mass media.  How different VOD players use mobile analytics in addition to the BARC data for customising mobile user data for different advertisers will be an important factor in determining their success in the growing Indian market.

Indrani Sen is a media services veteran, having worked with JWT, later Mindshare and then with Emami.  In recent years, she is an independent consultant and academic. She is Adjunct Professor in charge of the Media Management programme at the Symbiosis Institute of Media & Communication, Pune. The views expressed here are her own.