Distribution of video streaming apps in India seems to have come of age. Direct-to-home (DTH) companies such as Tata Play and Airtel have introduced products that address over-the-top (OTT) video streaming distribution. Tata Play Binge+ and Airtel’s Xstream Premium set-top-boxes bring together several Indian and international OTT apps for streaming over TV sets.
In September 2021, Amazon Prime Video launched its ‘Channels’ service. Further, MX Player, which aggregates content from multiple OTT apps, puts select content from these apps behind a paywall.
“India has more than 40 SVoD (subscription video on demand) services, though top five players rake in 90% share of revenues. For the long tail of niche services, per subscriber economics is becoming unfeasible, given the high cost of acquisition,” observes Mihir Shah, vice president, Media Partners Asia. Super-aggregation, therefore, is imminent, particularly for niche/ regional players.
According to Deloitte’s TMT Predictions Report 2022, India has around 40 video streaming apps and 102 million paying content subscribers. The OTT category, which accounts for 7-9% of India’s overall entertainment space, is set to witness a CAGR of more than 20% to reach $13-15 billion over the next decade. But overcoming distribution challenges will be key to the growth of subscription revenue. Currently, the SVoD market is worth $0.8 billion; it could grow to $2.1 billion by 2026.
The Deloitte report estimates that each paying customer in India has, on an average, 2.4 subscriptions. Price sensitivity holds Indian customers back from paying for multiple OTT streaming services.
Reducing friction and streamlining payment are among the conveniences these aggregator services offer. Adarsh Nair, CEO, Airtel Digital, says, “The unified content search and AI-driven personalised curation for each customer delivers a seamless viewing experience.”
The experience of moving from one app to another in search of content to watch is also eroding the experience of watching content on OTT video streaming. According to a 2022 Accenture study, 44% of users spend more than six minutes trying to find something they want to watch.
“The flipside of the growth of OTT streaming platforms is that it has led to customer frustration in managing multiple OTT accounts, usernames, passwords and payment options,” notes Chaitanya Divan, head — Prime Video Channels, Amazon Prime Video India, indicating that aggregation therefore, is the way out. Channels has brought on board nine rather niche OTT streaming apps — discovery+, Lionsgate Play, Docubay, Eros Now, MUBI, hoichoi, Manorama Max, Shorts TV and hayu.
Treading the TV path
All sorts of OTT apps are tying up with multiple distribution service providers to widen their reach. Eros Now, which claims to have 7.9 million paying users, has partnerships with Airtel Xstream Premium, Amazon Prime Video’s Channels and Jio Cinema, among others.
Eros Now CEO Ali Hussein draws a parallel between content consumption on television channels and OTT video streaming platforms. “On TV, viewers are loyal to shows, and not so much, channels. With OTT apps, viewers could potentially unsubscribe or delete the app after watching one show they really like.”
A distribution mechanism that brings down the overall cost for the consumer is, therefore, a win-win for both platforms and subscribers. The monthly subscription fee for Tata Play Binge+ and Airtel Xstream Premium starts at `149, each.
Shah says the OTT viewing experience has gradually started resembling the pay TV distribution model — familiar in terms of packaging, content discovery, and even payment experiences. This familiarity is also being offered at the bundling level. Indian consumers prefer bundles over à la carte when it comes to selecting television channels to watch, and the same is likely to apply in the consumption of OTT platforms. Tata Play currently lets users add Netflix and Amazon Prime Video to a basic bundle of 12 OTT video streaming platforms.
In addition to benefitting from the reach of distribution service providers, OTT platforms also gain access to consumption patterns of users, and can mine data to identify viewer preferences.
Analysts say that improved distribution and affordability brought about by bundling will propel the OTT market towards mass adoption. Subscribers living in tier-I and tier-II cities may even make the switch from traditional linear TV to predominantly OTT content consumption. Financial Express