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the Indian
Market
Differentiators for OTT & TV Channel v/s OTT
Markets
On-Demand Content Ecosystem
Payment
Marketing Partners/
Channels Gateways
• Partners with interested in • Credit card, Debit Cards
similar customer segments • Net banking
• ATL • Mobile Wallet
• BTL
OTT Business Models in India
Content
Understanding Customer Behavior • For OTT Platforms “Content is King”
• Varied Content – Originals, Long/Short type , Catch-up TV etc
• To understand different customer segments • Different types of content developed and syndicated by OTT
• To provide a complete consumer experience - Platforms
reduce churn rate & increase retention
• Make use of Analytics for personalization
• In India : Regional Content is in demand, Distribution, Promotion & Marketing
especially in the South
• Select the right distribution mix
Setting the right price point • To create awareness - For customer
acquisition
Demand for Basis the rural & urban divide and other demographics, demand for content like
Varied movies, TV serials, news, sports etc. gave rise to different channels across
Content languages.
Limited time
Limited slots per channel led to an increase in the number of channels under one
slots per umbrella. E.g. Zee has over 90+ channels catering to different demographics in
channel terms of content – Zee News, Zee Marathi, Zee TV HD etc.
Viable Television moved from mass channels to mass + niche channels with pay revenue
Economic model catering to niche channels & advertisement revenue catering to
model mass/general entertainment channels.
Customer Behavior
• Customers are largely fickle, and they switch their accounts to different platforms
• According to a BCG Report, most customers have up to three video/OTT Apps on their
smartphones – hence OTT platforms will need to compete for being in the top three positions
Consumers
with a strict
preference
10%
for originals
Supply of
originals 1%
Movies are the preferred category with comedy,
drama, and action being preferred genres
Language preference
OTT TV
19%
28% 28%
37%
44% 43%
Source: KPMG, Unravelling the digital video consumer, 2019, BARC, 2017
How happy are Indians with OTT rates?
7% 6% 10% 4%
16% Nothing 7%
20% 20%
23%
24% ₹50-200 22%
34%
₹201- 400 30%
₹800+ 7%
Australia India Philippines Singapore Thailand
Yes No Don't Know
Average monthly OTT rental ₹ 306
Indian consumers, just like those in other
developing nations, don’t mind ads if it % consumers unwilling to pay 59%
reduces their bill
Consumers subscribed to one or more paid OTT There is no single service that provides all
the content I want
42%
Reasons One or more of my video services is bundled
Australia 44% 10% 46%
for having or sold as a package together with other 36%
more than services
Source: Ovum, OTT Media Services Consumer Survey, 2019 video OTTs
Online video service has poor content library
Other 12%
Can OTTs drive behavior of pay?
% whose entertainment needs are Active television subscriptions Migration from DTH to OTT
being met online (millions)
2
36 5
38
↓17%
161
50% 21%
133
Average monthly OTT rental ₹ 306 Average monthly DTH rental ₹ 467
As traditional TVC content becomes increasingly accessible on OTT platforms and internet connectivity
improves, consumers willingness to pay for OTT would increase and users will migrate to OTT.
Source: Ovum, OTT Media Services Consumer Survey, 2019, EY, The era of consumer ART, 2020, YouGov, 2020
IPL v/s Original Content – What should an
OTT choose?
HOW OTT is affecting SPORTS
IRR 17.79%
Investments in ORIGINAL Content BY OTT’s
Increasing consumer
engagement by improving 1
upon features like VR feed,
live chat, score predictions, 2 Putting out highlights and
contests etc. original content as
freemium to bring people
into the product with
something that can be
enjoyed year-round, 24/7.
450 60 30%
• E-commerce industry revenue has been growing with a 3-year • Bundling of the services is common.
CAGR of whopping 33.62% and stands at 43.5 Billion $USD. • The difference in ARPU is essentially because of the
• Whereas, revenue of SVOD OTT industry has been growing at subscription-based nature of SVOD service.
3-year CAGR of 22% and is currently at 0.5 Billion $USD. • ARPU can be increased if the OTT platforms move towards a
• Age bucket wise distribution is almost similar for both the hybrid of SVOD and AVOD model or essentially a freemium
industries and is maximum for 25-34 age bucket. model.
• Advent of Big Data and smart recommendations has positively • Analogous to the subscription-based priority delivery and
impacted both these industries. access model followed by the e-commerce majors, a freemium
• Much of the growth of the industry has been triggered by an based priority access to subscribers on OTT would accordingly
increase of internet (4G) and smartphone penetration. increase the subscription rate.
LEARNINGS Subscribers First
Similar to the e-commerce companies providing exclusive access to paid
subscribers. Paying members could be given instant access to future
episodes which may sometime comprise an entire season. After the shows
completes all its weekly releases, all the episodes except for the first one
could be made exclusive to paying members driving subscription.
One-stop Solution
Having an exhaustive collection of services would Going Local
increase the stickiness of the customers, especially Changing consumer behavior from savoring global
considering India with plethora of vernaculars. brand and content to more local and regional content
in vernacular languages is the need of the hour for
the OTTs. And this is evident from the attempts of
multiple OTT platforms to harbor local content
through collaboration with local players. For
Consolidation instance, Netflix’ recent collaboration with Viacom18
OTT industry itself is very competitive and often
bleeds heavy while offering discounts to retain the
customers, hence if the products are not well
differentiated then it makes business sense to
consolidate with a bigger player.. Differentiation
Having distinctive and differentiated offerings would
go a long way in avoiding a potential acquisition by a
bigger player in the market. The key differentiators
here could be model (SVOD, AVOD, TVOD etc.),
alternate offerings like News (Disney+ Hotstar),
Games, Competitions etc.
Partnership with TelCos
The rise of both the industries is very complemented by the development
of the TelCos, and since both these industries sustain themselves on
platform economy, it is justified to get in collaborative partnership with the
TelCos.
OTT & Telcos
OTTs in India have grown on the back of the rise of
telcos
0.1
2017 2020
Telco
Organic Total
partnerships
Source: TheKen
Growth through partnerships is driven by strong
mutual benefits
Benefits for OTTs Benefits for Telcos
Large share of costs subsidised by telco Customers more likely to stay longer & pay more due to OTT
bundles
All customer
60% More likely to stick
$6 acquisition costs
Increased customer with their current
subsidised 43%
retention telecom provider
Complete ARPU
100% $5 through telco
Spend more on their
Higher willingness to pay 42% carrier plan due to
bundles
Large chunk of
60% ₹15 ARPU subsidised
Increasing smartphone penetration & data % of daily online video watching time
consumption
33
58%
Mobile phone 87%
46% Smart TV
21 5%
38%
Laptop 4%
30%
23% PC 2%
17%
13% 1%
Tablet
6
Other 1%
2014 2015 2016 2017 2018 2019 2020
0% 20% 40% 60% 80% 100%
Column1
Smartphone penetration (% of popn)
Smart TV prices (in Rs.) have fallen 30-50% in just 2 yrs Smart TV penetration has thus grown exponentially
75%
-31%
-40%
-53%
14
80,000
29,000 50,000
55,000 8
30,000
13,500 5
Globally, people prefer watching on TVs after signing up on laptop & mobile
TV
Viewing preferences
+ rise in family
oriented content
Laptop
will drive OTT
viewership towards
smart TVs
Mobile
Tab
Hardware: Providing real estate on the remote Software: Get priority access on TV homescreen &
incentivises the view to subscribe recommendation push
Push content
recommendations on
homescreen + before
beginning viewing
Conventional TV
viewing
Content studios Cable/DTH companies TV companies
? ? ? ?
Thank You!