Where do we expect the OTTs when the pandemic is over?

The Rise

Sandy Sen, is a busy person.

As the AVP of a foreign bank he is in charge of the company network and system infrastructure. Before the pandemic most of his work days were breathless. Sandy worked through his time, returned home, prepared for next day and followed the same routine next day, till weekend. Then the pandemic hit. And Sandy started to work through the day, from his home. There was no window of time as work, most of his work days would start around 9.30 in the morning and stretch to 9.30 in evening. Often later. The only time Sandy took break was in between, with a quick ten minute scan of Netflix. He completed quite a few web series with such ten minutes. Why Netflix? Sandy was clear. It is not Netflix. The OTTs together; since Netflix offered a quality bouquet of contents to his taste it is the default platform for him, otherwise the premium OTTs together offer an excellent entertainment package. They offer the anytime, anywhere option. And literally live by that freedom. Since then we have crossed the year. Sandy is still in working-entertaining-working mode.

Curious with Sandy’s behaviour, I started to ask around. The OTTs have blessed a huge section of India. Tier I, Tier II or any small town. The magic touched all. But not in the same way. The content is king and it changes colour.

Content, the supreme

English

The Indian audience consumes mainly four segments of contents. The so called elitist segment is the only one to consume original english content. This is the smallest segment and is even less than ten percent of the total viewership. The segment primarily subscribes to Netflix. This is mostly a metro crowd scattered by the pandemic to exotic vacation destinations of India or to hometowns, WFH. Very likely the hometown is also a metro. A small section like Sandy who have working partners or are locals, has chosen to stay at their place of residence. There is no individual data of growth on this segment but a hundred percent growth can safely be estimated in the pandemic. The niche audience never had so much time before, and they never felt the pressing urge of entertainment midweek. What Sandy had, was paid subscription for all the prime OTTs and very less time to enjoy them. So, his Netflix time will not improve the overall statistics other than growth in screen time. And it is same for the category.

Hindi

Hindi is the fuel on which OTTs have captured the moment and beyond. Well written and directed, gritty shows with violence and abuse; twisted political plots and thriller-like suspense, rustic feel-good stories, brilliant production and direction has not only uplifted the overall standard of web series, they have also drawn crowds en mass. Good stories, often edgy, in a binding narrative have done the trick. The demand and acceptance of Hindi content has gone up simultaneously. This is one moot point that helped the Hindi web series to spread fast, spread far. Audiences lapped up good contents even when they could not relate but enjoyed the show. Around the beginning of the pandemic there was another change. From the mobiles of millennials the OTTs entered the bigger screens. Working laptop was the first point of entry for the work-from-home professionals, to take one minute break in between schedules. Then it came to the desktop and then to the family television. Slowly from being an individual experience the web series nudged out the family soaps. Closed multiplexes helped the shift.

The regional

The growth of viewership is not astronomical in regional content but it was more of a psychological assurance for the viewers. Often a comfort viewing. But more importantly it helped OTTs penetrate the non hindi speaking regional audiences. New territories not ventured before. And this multiplied the viewership. The eastern and southern segments had more regional channels and even today the number of platforms is not very large and most of the shows are mediocre. The only assurance is the number of original contents in these platforms is much higher and audience reaction to such series is positive.

The adult

Adult or soft porn content was a surprise element of OTT. There is even one-line tease among viewers about subscriptions. ‘Ullu liya kya’ is one such common taunt(Ullu is an infamous platform of the titillating kind). For revenue, most reputed OTTs take the subscription model for paid viewers and advertising model for free viewers. Here, neither works. Transactional model where viewers are given a set number of downloads for given payment is the norm. The content is poor, but a few new faces emerged from the adult movies. The bold, daring skin show glues its clientele and is a serious business for both the viewers and producers. A film of twenty minutes to an hour is made in twenty five to fifty lakh in two weeks. The producer easily makes six to seven crore a year only from download payments. Generally the producer makes the platform to control payment. There are plenty of such platforms run by word of mouth and doing a roaring business. Who are the viewers? Primarily the migrant workers away from home and family. Then there are the regular fringe viewerships, adolescents who can hide their smartphones, people curious about the content and anyone interested. The biggest issue with this segment is the shadiness. Since this is unorganised and platform owners want to remain hidden the number of viewers is hard to estimate. And since this is a download dominated segment all that matters is number of downloads and the corresponding dough.

The industry in India

The devices

Today it is not hard to find a big screen for home viewing. Regular televisions now come in three by four feet, the diametric measure is sixty inches. And at a reasonable price. Th top brands are available around fifty thousand. A bargain if the dimensions and features are seriously considered. In the urban drawing rooms such television screens are sufficiently big and somewhat compensates the multiplex screen. People do not miss the big screen. They definitely miss the expensive popcorns though. And the clarity, picture quality is high definition for most of them. So, from the six inch screens of millennials on the family the OTTs shift to ten times bigger fields of family drawing rooms. Even with their mixed bouquet of risqué contents.

The langage

The vertical surge we have seen in this pandemic primarily rides on Hindi contents. Talented actors guided by able directors and supported by daring producers created some remarkable series. There has already been controversies. With religion, politics and though at a lesser degree, casteism. There is call for monitoring content. Bring the platforms under censor. Often the platform heads have tendered unconditional apologies and taking them all along, the Hindi content is challenging viewers with raw, rustic, real life productions. And the viewers lapping them in all eagerness. In between the change of device happened from mobile to bigger screen television and viewership grew multifold with this change.

The war

The Indian subscription model has much smaller value, the industry term for this is Average Revenue Per User(ARPU). In international context it is much lower. What they make up in is volume. And once dominated this market can be a real goldmine for most international platforms. Netflix or Hotstar-Disney combine, as the international flavours charge on the higher side and ZEE5 or AltBalaji or surprisingly Amazon Prime charge a much lower subscription. Against the foreign onslaught the desi brands have held their own fort and grown remarkably. Probably they have gained more from the pandemic. However the real gainer is the viewer from this war. There is a push along the spectrum from all participants for better content, and there is an undercurrent of price war. A negligible one but can be a show of muscle in close challenges.

Shuffle play is from Netflix, for content viewing. They use algorithms mixed with ML to help viewers find content of their choice. By middle of this year viewers will see the final of this product out of Beta. Buoyed by the thirty seven million new subscribers, Netflix has already announced their plan to release a movie a week through 2021.

AltBalaji or ZEE5 is offering a steady competition to these numbers. Balaji added additional seven thousand subscribers a day almost every day at the peak of pandemic. ZEE5 already had a robust viewer base, much higher than Netflix. Their main challenge will be to convert the viewer base to paid subscription. Even with their low subscription charge they can shoot for the moon.

The market

At the end of 2019 the Indian OTT market was ₹ 42.5 billion. Estimated growth was roughly 33%. The revenue growth was much faster than viewership growth and there was a difference of 7–8%. What we have discussed till now is an explosive growth prompted by the pandemic. It will be reasonable to cross those earlier figures and wait for fresh data once the pandemic is over. However a fresh estimate is, nearly thirty crore Indians follow OTTs of their choice. Please understand the ghosts of hidden subscribers, who trust the download channel only, are a big part of the numbers but can’t be traced properly and tabulated. And till there is an authentic report we will have only estimates. Let us wait till the pandemic is over.

Tomorrow

Sandy Sen is ecstatic. He is licking for more content. New series, new movies. Already Warner Bros declared their intension to release movies simultaneously in multiplexes and OTTs through 2021. The exclusive window multiplexes enjoyed has been denied. It is interesting to watch if other production houses follow the trend. Already there has been some movie releases in India through OTTs, in this pandemic. And the response for most was good. However it is unlikely to have the noise of a multiplex movie release in OTT, for any Indian producer. And that is the primarily point on which many movie makers will hesitate to release their movies only on OTTs or simultaneously with multiplexes. The momentum building will be much lower. And correspondingly they get a timid response compared to a multiplex release.

As OTTs penetrate more, there will be rise in backlashes against their contents. Often prompted by mutual rivalry, often to gain social or political mileage, often to act as self appointed guardians. The signs are already there. And it will depend on the clout of the platform to steer away from those obstacles. How do they navigate will be a challenge.

The multiplexes will have lot many challenges when they open. Their finances will be thoroughly stressed but they will need infusion of funds to start things, to innovate and face those growing challenges. How they do this is interesting to observe. Whether the multiplex segment completely overhauls itself to emerge anew, or they limp to prosperity, it now a million dollar question.

I called Sandy. He is betting on the OTTs. Against every point I raised he countered with his ANYWHERE-ANYTIME logic and FREEDOM funda. I am waiting.