Content ads come to the rescue of OTT firms

Star India-owned Hotstar and Viacom 18’s Voot have access to local and Western content and both tend to monetise through advertising. While the former offers a ‘freemium’ subscription and advertising service, the latter has opted for an entirely ad-based model. This has catapulted the two to the top of the charts in the OTT (Over The Top) sphere in India, leaving biggies such as Netflix and Amazon Prime Video behind.

Hong Kong-headquartered analysis firm Counterpoint has ranked local providers Hotstar and Voot as first and second, respectively, in the OTT segment in the Indian market, followed by Amazon Prime Video and SonyLIV. Netflix is ‘far behind’ other players, ranking fifth in terms of user numbers behind local and international rivals, according to the analysis.

The improvement in the average internet speed in India has been spurring growth in the OTT segment. Though major broadcasters in the country have invested in the segment and launched their own OTT platforms, the main hindrance to the market is the average price for cable and satellite subscriptions, which limit subscription revenues for the OTT players.

But, advertising has come to their rescue. Digital entertainment start-up Pocket Aces, which raised $3 million in December 2016, is riding high on the fact that FilterCopy, its mixed media offering for all things shareable — such as interesting articles, relatable videos, and funny memes — ranked top on Facebook with more than 71 million (71,128,760) views in the new-age entertainment category, with 27.4 million followers.

The company, which became the first Indian digital company to distribute content on China’s premium platform Youku Tudou through a partnership with WebTVAsia, has created written content with brands like Little Hearts, Lifestyle, Kurkure, Epigamia, and Penguin Random House India. Over the past two years, the digital content house has worked with over 40 advertisers including PepsiCo, Flipkart, T-Series, Marico, Kingfisher, OYO Rooms and Swiggy.

As an official pointed out: “Having kicked off our new syndication wing in 2017, we distributed our content across multiple territories and platforms. We have Pocket Aces’ content across leading OTT platforms, in-flight entertainment systems of leading airlines and even on Tata Sky’s new TV Channel QYOU.”

DTH platform Tata Sky live-streamed four-day long music festival Sunburn on its mobile app. This was the first time that the festival was live-streamed on a mobile app, making Tata Sky the only OTT platform covering the festival live. Apart from the live-stream, the app also showcases nearly 500 hours of music fest content from over the years, open to all users, including non-subscribers.

Malay Dikshit, Chief Communication Officer, Tata Sky, said given the “increasing screens and the appetite of millennials to experiment with content, it is essential to reach the entertainment needs of consumers, just the way they like it.”

Rising digital content consumption in the country has resulted in significant growth of digital video advertising, which is about only one-fifth of TV advertising.

The growth of OTT platforms and the overall digital content market is however driven by a mix of advertising and subscription revenue, said Dushyant Kohli, Head of Growth, nexGtv, an OTT platform. He said that in order to attract more advertisers and rake in higher profits, it is imperative for OTT players to differentiate content, which will offer advertisers a unique branding and marketing opportunity.

Girish Menon, Co-head, Media and Entertainment at KPMG India, notes that OTT consumption in India has reached a tipping point with the rollout of 4G, which has resulted in a dramatic and rapid growth in internet penetration and video consumption, which “has also fundamentally altered the consumption demographics and patterns.”

The OTT market is currently valued at $280 million with nearly 100 million subscribers, and is poised to grow at 35 per cent year-on-year. A recent Duff & Phelps report indicated that OTT Video on Demand (VoD) channels have also expanded their consumer base due to digitalisation, with Netflix and Amazon Prime, accompanied by domestically built Hotstar, Voot, and Ozee were, revamping their existing models to make the most out of digitalisation.

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