Growth and Inflation of OTT Business
An article by Samiksha Periwal
Over-the-top media service more commonly known as OTT platforms provide viewers with a wide range of media services via the internet. Some of the most common OTT platforms in India include Netflix, Amazon Prime Video, Alt Balaji, Voot and so on. It has become the “new normal” in covid times since traditional cinema halls and movie theatres have remained shut for over the past two years now. During the lockdown, it was a blessing for the majority of people because it offered them with a broad variety of content to binge watch and spend their time being entertained online.
There are majorly three categories of content available on OTT platforms- OTT television, OTT messaging and OTT video calling. The first category offers streaming television online through apps or separate dongles. It remains the most popular type of content offered by this service till date. According to a report in 2019, Disney’s Indian video streaming platform Hotstar achieved the record for simultaneous users viewing an OTT event with 18.6 million. This data alone demonstrates the platform’s popularity. The second category offers instant messaging services or online chatting opportunities supplied by third parties as an alternative to text messaging services provided by a mobile network operator. A very common and important example under this category is WhatsApp. It is possibly the most widely used app, particularly in India, because it permits official, personal, and business-related communication, all of which is available at the touch of a button. The third category includes examples such as FaceTime, Zoom and so on. This category has proved to be a life saver during this pandemic since almost everything, from education and work to communication with family and friends had shifted online. Hence, apps such as Zoom provided a virtual platform for face-to-face interaction which facilitated in essential communication.
In the last two years, this platform has seen a significant increase in popularity, especially in India. During the pandemic, the over-the-top (OTT) industry has in literal terms exploded. The most interesting fact about this rise is the contribution of audiences from rural India. According to the Broadband Indian Forum, rural India accounted for over 65 percent of OTT use during the lockdown. This itself suggests that web content is not only appealing for an urban educated class, but also goes out to interest people far and wide from different social settings and mentalities.
The nature of content available online varies a lot. We have content related to almost anything and everything available, however, the question we most often ask is what becomes popular? Or what has the ability to create a buzz in the market? To answer this question, one cannot give a generalized explanation or simply define a specific genre such as mythology, romance, sitcoms, crime thrillers and so on. This is because there is no “one type” of genre which influences the audience. It all depends on the quality of content one has to offer, the storyline, the issue around which a particular film or web series is revolving and most importantly the relatability. A strong, realistic and meaning storyline is very important for quality content creation. This is something that most Bollywood films lack; they prefer to present even a normal man’s life as a fantasy and include extraneous components that make the picture seem entirely unbelievable. It is important for the audience to see the characters being portrayed as ‘real’, only then will they be able to connect with the film and correctly understand the message behind it. Another important aspect is the topic on which one bases the content. Viewership is influenced by choosing newer and unusual themes, particularly those that have been vilified by society.
People are interested in such issues and enjoy seeing something different. This also aids in making an impact, raising awareness regarding less-discussed issues, and bringing about a shift in conventional thinking. This is one of the most influential things that Ott content has done. We have web series and films being made on homosexuality, mental health issues, women’s rights and so on. This contributes significantly to its popularity, particularly among the youth, who have a broader and more cosmopolitan view of society and are prepared to effect change.
Another important factor contributing to the expansion of OTT platforms is their accessibility. Audiences can access OTT content through a wide range of electronic devices. Mobile phones, Smart TVs, Set-box, tablet, laptop and desktop, all these electronic devices support their content. This factor is essential as the viewers can watch content anywhere, anytime, according to their comfort and preference. One can put on a particular web series on their Smart tv and watch with the entire family or simply switch to their mobile phones to enjoy entertainment privately.
OTT content has definitely influenced the Gen-Z population, more commonly known as the new generation or the youth of the country. To support this statement, according to a survey released by Dentsu Aegis Network (DAN) India’s Data Sciences Division, 65 percent of millennials and Gen Z prefer to consume video content on an over-the-top (OTT) platform over television. The paper, titled ‘Now Streaming: The Indian Youth OTT Story,’ delves into the OTT content and gaming habits of Urban India’s Gen Z and Millennial audiences. There could be various reasons to this, however, one reason which must be common is that the content that is being targeted to the youth. The usage of language, unusual storylines and introduction of fresh, realistic and ‘common man-like’ characters is what the millennial generation prefers. Moreover, living at a time period where technology rules everything and everyone, they feel the need to engage themselves in electronic devices and look for entertainment in these shows and movies.
Another benefit of this business is the low subscription fee, as well as the ability to share your subscription with many users of that platform, which has facilitated in content reaching a wide range of audience. Previously, only a more privileged class could watch films in theatres and certain families that owned a television set could enjoy watching TV programs. To watch video content over the internet, all you need now is a smartphone and an app, or a small monthly subscription cost. The cost of subscription for Over-the-top media services is a lot less compared to television broadcasting service. Customers have been empowered by the OTT Platform in recent years by offering them with a number of entertainment options. Traditional means such as satellite cable are no longer used by users. Surfing through channels is no longer necessary, and viewers can now make educated choices about what to watch.
The first OTT platform to be launched in India was BIGFlix, a new venture of the Reliance Industries in 2008. Considering the time frame, no one at that time could have thought that this industry is going to have such a bright future. Thirteen years down the line, we see the inflation and rapid growth of this business and can also speculate to see a similar trend in the near future. The OTT industry’s upward trend reached a new high in the last two years and is continuing to rise each day.
The pandemic did have a major role to play in this because people had more and more free time sitting idle at home. They preferred watching shows and films in their leisure time. Previously only a limited set of actors, usually not very popular among the masses, would work for online content creation. However, with the rising popularity of this industry, and considering the flourishing business, a lot of mainstream cinema actors, directors and producers are trying their hand at OTT content creation. For instance, the 2020 film ‘Ludo’, Directed by Anurag Basu was a huge hit and its cast included renowned film actors such as Abhishek Bachchan, Pankaj Tripathi and so on. On the other hand, new talents from the OTT background have become very popular and are getting a chance to showcase their talent on the big screen. Pratik Gandhi, the main lead from the 2020 blockbuster series ‘Scam 1992: The Harshad Mehta Story’ is a great example of this.
The rising trends in this industry have predicted a hike and a shift from traditional cinema halls to a complete online over-the-top service platform. According to independent transaction consulting firm RBSA Advisors, the Indian OTT market, which was valued at $1.7 billion in FY20 (including video and audio), has the potential to rise to $15 billion in the next 9 to 10 years. This trend is said to continue for various other reasons as well. OTT services in India have drawn a growing number of customers as a result of improved networks, digital connection, and smartphones. According to RBSA Advisors’ MD and CEO, Rajeev Shah the pandemic has surely revolutionized the way people consume media. The use of over-the-top (OTT) services became an unmistakable trend during this time. This surge was fueled by the expanding market and customer demand for personalized content on OTT platforms. OTTs have provided consumers with a never-before-seen level of choice in terms of content, accessibility, device/medium (phone, laptop, tablet, or TV screen), and the censorship policy. Massive investments in original and acquired content by OTT services like Netflix, Amazon, Disney+, Hotstar, and others will help subscription video-on-demand take a larger percentage of total OTT revenues in the future. Furthermore, tier 2, 3, and 4 cities, as well as the Indian language speaking population, will drive the next wave of OTT growth.
A common question raised regarding the OTT industry is about their business model. Many individuals are perplexed as to how they can make such a profit with such low subscription costs. The answer to this question is that the business model of OTT platforms mostly covers subscribership with sponsored content. The majority of their earnings are supposed to come from advertisements. This model would initially seem risky and uncertain; however, investments turn out to be fruitful in the long run and once the media service becomes popular, a lot of advertisers approach these platforms to endorse their products.
Another contentious issue surrounding over-the-top media services is whether or not it is a bubble. Any technique, phenomenon, or invention that is likely to become obsolete is referred to as a bubble. We can either say that OTT, like traditional television, is here to stay. As technology advances, new ways to consume OTT content may emerge. It is likely to occur due to the existence and merging of numerous players, as it does in many growing sectors. Most independent players, are building OTT with the hopes of being purchased, merged, or consolidated which itself explains it is has a long way to go. There could be an alternative perspective to this where consolidation can be viewed as an option, as is the case in most other industries. At the end probably, thirty or so players will come down to just five or six, that is when the quality of Content and its access will decide the future in OTT. We could agree or disagree with either of the two points of view. What will truly happen and how things will turn out in the future will be decided in the subsequent years.
Keeping the current situation in mind, we do see a hope that over-the-top media services might have a very bright future. However, once the pandemic is over and people get busy with work, movie theatres and cinema halls reopen, this market will have to be at its best to compete and cope up with big screen cinema and various other television programs. The quality of content available will yet again play a very crucial role. We can only hope that, in the near future, this platform will also assist in bridging the digital divide, provide relatable and unique material, raise new ideas and philosophies, and give us with a great deal of fun.
Samiksha Periwal is an 18 year old student from Kolkata, West Bengal. She is an enthusiast, eager to learn and explore. She has done her schooling from Lakshmipat Singhania Academy, Kolkata and is currently a student of Christ University, Bangalore pursuing a triple major in BA Psychology, Sociology and English. She is a passionate writer and has won many laurels for her school through the years.