Deep in the interior of Assam, a twenty-something returned from Bangalore last year. He used to work at a factory that decided to shut after Prime Minister Narendra Modi declared the lockdown to restrict the outbreak of coronavirus in India. He was one of those “migrant labour” who migrated 3,100 kilometers after he lost his job. With a lot of time and little to do, he learned to assemble LED bulbs by watching YouTube videos. Today, he runs his own company and has even employed seven friends.
YouTube in India has come a long way. Once it used to thrive on catch-up television content across languages. But then as Indian broadcasters started launching their own video streaming apps they started pulling content out of YouTube. Came in the comedians and began an era of ‘web series’. Creators like ‘Pocket Aces’, ‘The Viral Fever’, ‘All India Backchod’ kept the urban mass on the platform. ‘Nisha Madhulika’, ‘Wah Chef’, got women to watch content and learn new recipes.
Then came the advent of OTT. Amazon Prime Video, Netflix, Hotstar (Disney+ Hotstar) wrote cheques to TVF, AIB, Pocket Aces to get content. The income difference was huge and the creators realised apart from the community and ‘iconic metal play buttons’ they hardly earned anything on Google’s YouTube. That was another exodus. But as Jio garnered popularity and Internet reached deeper into the country, YouTube kept finding new creators. The likes of ‘Ashish Chanchlani’, ‘Bhuvan Bam’ rose like a phoenix and the subscriber count grew in no time. T-Series with a huge library of songs and ChuChu TV with nursery rhymes became global leaders on the platform.
In 2020, according to a report by Media Partners Asia (MPA) YouTube commanded 43 per cent of the revenue generated in the online video market (about $1.4 billion/Rs 10,277 crore). Disney+ Hotstar assumed 16 per cent of the market, while Netflix had 14 per cent. 67 per cent of the digital video market is contributed by advertising spends. In 2020, 460 million viewers sampled videos online while there are only around 29 million subscribers. To capitalise on the advertising spends, Times Internet-acquired MXPlayer kept its content free. A recent entrant in the AVOD (Advertising VOD) is Amazon.
The e-commerce giant has launched miniTV within the app used for shopping and payments. miniTV promises to offer “unlimited entertainment” for free. It has licensed content from TVF, Pocket Aces and other popular “YouTubers” including Ashish Chanchlani and intends to monetise them through advertising. Analysts view this as a part of Amazon’s global push to rake in more ad dollars. International reports find Amazon’s US ad revenues last year grew to $15.73 billion, increasing its market share from 7.8 per cent in 2019 to 10.3 per cent in 2020. Amazon’s ad revenue in the US is driven by search revenues from ‘Sponsored Products’ and ‘Sponsored Brands’, while video ad revenues on properties including Amazon Fire TV, Twitch, and IMDb TV grew significantly as well. In India, ‘Twitch’ (popular among game streamers) hardly has a presence and a significant drop in the price of smart television has reduced the popularity of Fire TV Stick. So, is miniTV the biggest bet from Amazon to garner incremental advertising revenue?
“miniTV’s primary goal is to create a huge funnel to the shopping app. Advertising is a secondary goal,” opines Kunal Dasgupta, founder and CEO, TRIPLECOM MEDIA iTap and former CEO of MSM (now Sony Pictures Networks India). He adds, “This is because Prime has benefits of free delivery but has not created too many users in terms of India’s population of smart users, unlike the US on that basis alone. In terms of size, going free is the only way to bring in hundreds of millions of shoppers. That’s why it’s inside the shopping app.”
“As far as paid subscription for Prime Video goes, we have reached a saturation point as the low-hanging fruit has already subscribed either standalone or as part of a telco bundle. SVOD growth will be slower now as more AVOD enters the space,” asserts Dasgupta.
Apart from the likes of YouTube, Facebook (which are categorised as social media platforms playing video), MXPlayer and now miniTV, the video on demand platforms launched by broadcasters also have content available for free that are monetised by advertisement. Then there are short video apps like Josh, Moj, MXTakaTak, Mitron and plenty more. But advertisers, especially after a few “unsafe” experiences, are skeptical when it comes to exposing their products to new interfaces.
“Amazon with its scale and technology definitely will bring in trust in advertisers at large,” asserts, Gopa Kumar, COO, Isobar India. “This will also bring in content in a brand-safe environment acceptable to most of the advertisers,” he adds.
So, another challenger for YouTube? “Rather than YouTube getting affected, I feel there will be a movement of ad budgets from linear television to Advertising VOD. That is the main revenue opportunity for digital,” opines Kunal Dasgupta.
Gopa Kumar seconds Kunal Dasgupta’s assessment. “India primarily is an AVOD market. Movement from TV to AVOD will happen but I don’t think there would be such a drastic shift. As of now, people are shifting and watching more and more online content. AVOD will definitely open up more avenues for advertisers in the future.”
GroupM’s ‘This Year, Next Year’ (TYNY) report for 2021 says that the ad market will touch Rs 80,122 crore in terms of size, 45 per cent of it is estimated to be spent on television while 35 per cent on Digital.
For the content creators, it is a welcome play! Sources reveal that Amazon has been in discussion with content providers for more than 18 months for miniTV. Flipkart also tried something similar, but the video platform got hidden somewhere in the bombardment of banners with hefty discount offers and deals. “How Amazon leads the retail customers on the app to watch content and how the customers behave after viewing the content is something that will be critical,” says Aditi Srivastava, co-founder of Pocket Aces – creator of shows like ‘Little Things’, ‘What The Folks’.
Amazon miniTV, opens up a whole new audience set who want to consume quality short/long-form content feels Vijay Koshy, president of The Viral Fever. He adds, “There is an inherent comfort factor for the audience since this comes from the house of Amazon.”
Like Dasgupta and Gopa Kumar, the creators too feel YouTube isn’t going anywhere. “YouTube still remains the largest platform and 2nd largest search engine with a UGC angle and that still keeps them unique and one of the best platforms to create your own kind of content,” says Koshy.
Srivastava feels the liberty to operate the channel independently and access to analytics is what makes YouTube unique. However, she adds that if YouTube does not start commissioning some of the creators on the platform, large content will start moving away. “Now that we are a large company and have a sales team, we are able to sell our large shows to brands. Independent creators, without the sales team, will now start to move away to platforms that are commissioning. So, YouTube will either have to start helping them with sales team or commission to retain,” Srivastava adds.
YouTube indeed is the leader, but challengers are gearing up too. Reports suggest YouTube’s market share is expected to decline to 55 per cent in 2025 from 67 per cent in 2021. Analysts believe as domestic broadcaster-backed platforms and short-form UGC video players expand share, along with the likes of MXPlayer and now Mini TV, YouTube will be under pressure. What this collective growth of AVOD does to television, also remains to be seen. Afaqs