New Delhi: Video streaming services are increasingly diversifying their offerings with more free content after realizing that relying on subscription alone will not be enough to sustain the over-the-top (OTT) business.
For example, JioCinema has made available local language programming including new movies and shows for free, while Disney+Hotstar is offering premium sporting events at no cost to mobile users. Amazon has followed suit, streaming international content on its free service MiniTV.
However, industry experts said this strategy may not generate enough profits for the companies, given that digital advertising spend in India is primarily directed at Google or YouTube. As a result, new movies or high-profile shows generally aren’t free. Hence, production houses are focusing on producing cost-effective, high-volume shows rather than premium, large-scale programmes.
“This will happen more often going forward as platforms are still in the game of subscriber acquisition and these are tried and tested strategies that matter in India,” said a senior executive of a streaming platform. However, the services are spoiling the consumers. And when it’s streamed for free, the value of premium content drops, he said. “Technically, even on linear television, programming is not free.”
A senior executive at a content studio said that with the pressure to build a bottomline, all OTT platforms have realized that catering to premium audiences with disposable income may not be enough. “The market is chaotic and production houses are being asked to make shows with around 40-50 episodes 30 lakhs per episode. About 70% of conversations are based on similar content,” the person said.
Queries to Netflix, Amazon Prime and Disney+Hotstar did not elicit any response.
Given that OTT is still in its nascent stages in a vast untapped market like India, companies must identify, explore and capitalize on this remarkable appetite for streaming services, said Manish Kalra, Chief Business Officer, ZEE5 India Said. “Our ad-supported model drives viewership and revenue as audience appetite for quality content grows. AVOD content drives the top funnel to upgrade to SVOD packs for a better experience. “The special material enables us to create a healthy funnel from AVOD to SVOD,” Kalra said.
The platform, which has dubbed versions of over 200 international films, has also launched Korean dramas dubbed in Hindi and other languages, besides a slew of films and web series like Lakdabagga and Sarvam Shakti Maiyam to be launched in the coming months has been prepared.
Certainly, there isn’t enough money for advertising to sustain the kind of spending that platforms like JioCinema and Amazon MiniTV are allocating to get or create free content. Media and entertainment industry experts point out that platforms such as MX Player have already struggled with this model. Furthermore, there is an even greater need to market and promote free content to grab people’s attention. “Unlike TV, where pay channels garner maximum viewership and advertising, companies like Google and Facebook account for 60-70% of all digital advertising. Also, at the end of the day, advertisers look for impressions,” said Anuj Gandhi, media analyst and founder of Plug and Play Entertainment, a media tech start-up, adding that given the clutter, any content is likely to be lost. There is a high probability of OTT ecosystem.
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UPDATE: July 17, 2023, 11:33 PM IST