Over the Top (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product directly to viewers over the internet, bypassing telco, multichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content. OTT is usually also termed as internet television or streaming television.
Its subscription-based video on demand services that offer access to film and television content, including but not limited to Amazon Video, Hotstar, ZEE5, and Netflix, as well as a wave of standalone television services that offer access to live streams of specialty channels similar to a traditional satellite but streamed over the public internet, rather than a closed, private network with proprietary equipment such as set-top boxes like Tata Sky, Dish TV, and MSOs.
You can think of an OTT application as anything that disrupts traditional billing models – from telcos or cable/satellite companies.
The creation of OTT applications has led to a wide-ranging conflict between companies that offer similar or overlapping services. The traditional ISPs and telcos have had to anticipate challenges related to third-party firms that offer OTT applications. Think, for example, of the conflict between a company like Netflix and a cable company. Consumers still pay the cable company for access to the internet, but they might get rid of their cable package in favor of the cheaper streaming video over the internet. While the cable company wants to offer fast downloads, there is an inherent conflict of interest in not supporting a competitor, like Netflix, that bypasses cable’s traditional distribution channel.
Across the world the linear TV viewership base is shrinking. In markets like the United States of America, the pay TV base is expected to come down from 103 million HH to 92 million HH in 2017. And sooner or later we will see a similar trend in India. Rather than fight cord-cutting, traditional media companies are beginning to embrace it by launching their own streaming services. So besides traditional OTT players like Netflix, Amazon, and others, we are seeing lot many players emerging in the OTT space specially from broadcast companies as well, to combat losing viewers to their existing on-air channels, by offering same and more differentiated content on OTT services of their own. Ad supported and hybrid models are being offered to keep subscribers to OTT growing.
Growth of OTT
The OTT video market in India is beginning to see real traction with more competitors and new innovative platforms on the back of cheaper data bundles. With 180.3 million active online video viewers and almost 4 million registered subscribers as of 2017, India ranked 150th in broadband penetration worldwide till 2016. Post Jio launch, India has become the number 1 country in mobile data usage. Jio users consumed more than 100 crore GB of data per month on the Jio network.
OTT offers a wide arena of differentiated international and regional content. Indians’ appetite for binge-watching online videos is set to make the country among the top ten OTT video markets in the world in the next 5 years from now. The current OTT market as of 2017 is Rs 2019 crore and is expected to reach Rs 5595 crore by 2022, growing at CAGR of 22.6 percent. India ranked 3rd in terms of fastest growing OTT markets across the world. Various innovations on the content aspect are being experimented, from focusing on more original cglocal content, focusing on live events to regional vernacular content, all is happening to ensure growth story continues.
With growing rural India, rapid 4G deployment, and more smart phones, the growth of OTT is being fueled and will put India among top 10 markets in the world when it comes to OTT consumption. While the future is orgastic and one fine morning we will wake to the fact that, it will beat on, boats against the current it will take few years to reach the rightful share of wallet. Telco companies are offering bundled OTT subscription with high data packs to keep their churn under control. OTT offers a Rs 5000 plus crore opportunity and also a survival strategy for broadcasters to embrace changing linear TV business.