Info-tech

Telecom tariff war heralds happy times for content companies

Rashmi Pratap Mumbai | Updated on July 18, 2018

Users have the flexibility of watching their favorite content any time, anywhere using OTT apps

Content companies have been the biggest beneficiaries of the telecom tariff war as the increased data consumption has been led by online movies, serials, and sports.

Content providers like Eros, Shemaroo and SonyLIV have increased their user base by almost five times since Reliance Jio brought down data tariffs from ₹225 to ₹10 per GB after its launch in September 2016.

“A combination of two factors has helped drive usage — one is the decrease in data tariff and the other is the increase in data speeds, enabling seamless video streaming,” Hiren Gada, CEO and CFO, Shemaroo Entertainment told Business Line.

The result is that OTT or over-the-top players are raking in the moolah. OTT contents giving users the flexibility of any time, anywhere viewership.

“The number of users accessing our content has gone up phenomenally from 140 million views across all our channels in September 2016 to over 630 million at the end of March quarter,” he said. On a daily basis, the traffic is up from 4 million to over 20 million in the 18 months since September 2016.

Pricing pull

Price-sensitive Indian consumers have taken well to OTT as watching movies or TV shows online uses only about 1 GB of data per hour for standard definition video and about 3 GB per hour for HD video. So in ₹30, one can watch a full movie at one’s own convenience. “As the overall cost to customer has reduced with lower tariffs, we’ve seen a significant surge in the time spent per session. This has resulted in increase in overall revenue,” Ali Hussein, COO, Eros Digital said. Eros Now, Bollywood and regional entertainment provider, has seen a jump in its paid subscriber base from 2.1 million in FY 17 to about 8 million in FY 18.

The registered user base of Eros has grown to 100 million at March-end. “We will leverage the opportunity of reduced tariff and expand our distribution with telecom partners and others. Additionally, we are focussing on having a sizable focus on direct-to-customers with the launch of our Originals later this year,” Hussein added.

Cord-never Users

Frank D’Souza, Partner with PwC India, pointed out that another factor boosting OTT is the rising population of cord-never consumers, who are between 12 and 18 years.

“Cord-never users have grown up consuming on mobile phone and that habit is not going to change. And when they get into disposable income, their first choice will be a non-linear (non-TV) medium,” he said.

Indian users are now consuming 6 to 10 GB per month on smartphones for watching content only.

Moreover, with the reduction in data charges, online content is bridging the gap with TV channel subscription packs. “Now people have two screens —TV and mobile. There is a simultaneous consumption when people are accessing online content during TV ad breaks,” D’Souza added.

Published on July 18, 2018

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