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Now, OTT adoption hits English-language TV channels as well

Nandana James Mumbai | Updated on October 19, 2020 Published on October 16, 2020

Warner Media’s shutdown of HBO and WB TV is an example of how OTT adoption, fueled by the pandemic, is impacting traditional channels

Just as fears of over-the-top (OTT) platforms sounding the death-knell for theatres amid the pandemic were being allayed, the platforms are now in the spotlight for potentially rendering English pay-TV linear channels redundant. This is especially in the wake of Warner Media announcing yesterday that it is shutting down its HBO and WB TV channels in India.

 

The HBO brand will remain present in India through Disney’s OTT platform, Disney+ Hotstar.

“OTT is the new Goliath around that is making linear pay TV channels look like pygmies. OTT is becoming the aggregator of content of every genre. In an era where one is looking at everything with a one-stop-shop approach, OTT with its content width and newly seen aggression with exclusive OTT releases, thanks to the pandemic and shut cinemas, is in a roll. This will mean more closures and pull outs by linear pay tv channels. The Warner Media action is the first among many to come,” Harish Bijoor, Brand-strategy expert, and Founder, Harish Bijoor Consults Inc, told BusinessLine.

Netflix, Amazon Prime Video and Disney+Hotstar did not respond to BusinessLine’s queries on the subject.

Pandemic-fueled consumption

The first key development that helped the OTT industry was the rapid spread of low-cost data on the back of Reliance Jio’s expansion and aggressive pricing over the past three years. Now, the second key development has been the pandemic, said Lloyd Mathias, business strategist and angel investor. The pandemic and the consequent lockdown accelerated the uptick of OTT streaming platforms, he said.

Changes in consumption behaviour and OTT adoption, which would have taken three-four years to take off, have now occured in a matter of six months thanks to the acceleration caused by the pandemic, affirmed Jehil Thakkar, Partner and Leader, Media and Entertainment, Deloitte India. Why would one pay for both OTT and pay-TV channels, especially when there is significant duplication, is another factor, he added.

Attractive content

The biggest hit to niche English-language TV channels happened when premium quality global content started being made available through OTT streaming platforms, said Mathias. “Further, the new pay-TV system where bouquet offerings were disincentivised over individual selection of channels, made the number drop drastically. Now, you have to choose every channel individually into your DTH basket, unlike earlier, when you had the option to buy a bouquet of channels — so the smaller niche channels came virtually free, as part of the larger bouquet buy,” he explained.

The shift by consumers to OTT platforms from linear TV channels for English-language content was already perceptible before, but the pandemic has accelerated this as well, said Mathias.

“The future of content is on-demand, non-linear. This is most suitable for today’s digital savvy, discerning, always-on, ‘I want what I want, when I want it’ consumer.”

OTT platforms offer edgier content, better production values and great convenience at very affordable prices (and also free),” said Lulu Raghavan, Managing Director, Landor.

The pandemic has accelerated the shift to OTT, she added. “Brands that truly have a pulse on the consumer zeitgeist and can quickly produce content that deeply resonates will win more eyeballs. TV is not dead though. If linear channels learn from their OTT peers and become more agile and innovative, they can still succeed in keeping the eyeballs,” Raghavan further stated.

When it comes to OTT platforms, the big advantage for audiences is the relatively ad-free environment and the ability to watch at any time or place of their convenience, coupled with the fact that most of the OTT channels have invested in fresh and high quality content with great production values, said Mathias.

Ad dynamics

Meanwhile, changes in the pay-TV industry landscape and the market dynamics accelerated by the pandemic were reasons cited by Warner Media for discontinuing its linear movie channels in India. “A key factor is the drop in advertising revenues which was the main source of income for these niche channels. Many advertisers, understandably, pulled back on their ad budgets given the overall slowdown due to the pandemic,” said Mathias.

However, as Thakkar pointed out, OTT streaming penetration still remains low in India, with the propensity to pay for it is even lower.

On the impact on DTH players and cable TV operators if more English pay-TV channels withdraw — as it would leave them with just regional and news channels mostly — Thakkar said, “English entertainment is so niche in India that it has no material impact in terms of overall revenue for cable and DTH.”

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Published on October 16, 2020
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