A digital revolution is putting more than half a trillion dollars into play. Television and filmed entertainment, especially traditional broadcast TV, is being transformed by the big and fast-growing inroads of internet and over-the-top (OTT) video platforms. Some USD 570 billion in annual market value – in content creation, aggregation, and distribution – is at stake.
OTT television – representing some USD 25 billion in annual revenues worldwide and generated mostly by a handful of big US-based global players, including Netflix, Amazon, and Google’s YouTube – is at the center of this revolution. Its impact on traditional networks (broadcast and pay TV) and video distributors (cable, telco, and satellite) has been extensively examined. To date, however, there has been little study on the impact of OTT and the changing TV landscape on the various domestic production ecosystems around the world.
OTT in the context of the TV industry
OTT encompasses the distribution of video content over the top of traditional distribution technologies. At the most basic level, OTT is simply a technology alternative that allows for the replication of the traditional home entertainment stack of consumer value propositions in a digital context. In technology terms, OTT is the delivery of video content through fixed or mobile broadband internet connections instead of over the broadcast TV spectrum or dedicated cable, fiber, or satellite networks. In many ways, OTT is neither more nor less than a replication of the traditional set of consumer video services.
Furthermore, although OTT mirrors the traditional video stack, digital technologies enable many distinctive characteristics and features that are not possible with over-the-air, cable, or satellite distribution. These include the sheer breadth of content available, flexibility of time and place for viewing content, and the flexibility of consumer offerings and price points that companies can offer and from which consumers can choose. It is hard to conclude that OTT’s impact on video production ecosystems overall is not positive.
Although, perhaps, it is not as positive in every area as everyone might like. The removal of barriers to distribution and the resulting explosion in new – and new kinds of – content, as well as new ways of viewing it, are all boons for consumers. While there is concentration of share at the top of the OTT market, the opening of new markets to producers has led to greater revenues and value, if not a commensurate increase in jobs. The latter may be a somewhat illusory disappointment. It is highly unlikely that there would have been big increases in video-related jobs if the OTT market had never come into existence.
There are legitimate concerns about the potential impact of globalized OTT programming on local culture, but these may be partially counterbalanced by the ability of anyone anywhere to become a content producer and showcase his or her local culture on a global stage. The output of a billion content creators – representing all manner of backgrounds, societies, cultures, and points of view in a way that was unimaginable 20 years ago – cannot be ignored. In this context, OTT has democratized both the production and the consumption of content to an extent never before seen. Is that sufficient to serve local societal and cultural needs and fulfill the objectives of policymakers? If not, how can policymakers support local content when the traditional regulations on supply do not effectively apply to OTT? These are tough questions to answer, but it is absolutely clear that the evolution of consumers’ viewing habits and sources of content means that the traditional thinking about content creation needs to evolve as well.
Scope in India
India is the second largest subscription television market in the Asia-Pacific region in terms of number of subscribers. India will be amongst few countries to register a double-digit growth up to 2020 in terms of television advertising. Though at a saturation level with expected average annual decline in subscription, cable television will continue to dominate the market over satellite television up to 2020. Also, digitization has resulted in tremendous growth in the number of television channels which has now crossed 800. Television penetration in India is currently at 61 percent which signifies scope for tremendous growth and expansion.