Decoding JioCinema’s foray into subscription-based OTT market

JioCinema recently launched a paid subscription service - JioCinema Premium. The platform’s premium offering at the moment, includes content from HBO, Max Original and Warner Bros. 

HBO and Warner Bros. content was earlier streaming on Disney+ Hotstar. The premium plan gives the audiences access to content on four devices simultaneously, for an annual fee of Rs 999.

The platform has been streaming the ongoing Indian Premier League (IPL) for free and already has a large user base. It’s now focussing on retaining that audience by acquiring, and making, content.

A few weeks ago, it was announced that JioCinema is all set to host original content. Jio Studios, the media and content arm of Reliance Industries (RIL), unveiled a massive lineup of 100 upcoming titles - a mix of web series and movies.

Jyoti Deshpande, president - RIL media and content business, also hinted that much of this content could be behind a paywall.

As per Uday Sodhi, senior partner, Kurate Digital Consulting, while this isn’t something new, a lot of Disney+ Hotstar user base, will migrate to JioCinema. 

As per The Walt Disney Company’s Q2 FY23 results, it lost 4.6 million subscribers. This happened as soon as the platform lost the IPL to JioCinema. 

JioCinema, on the other hand, has experienced a swift rise in the number of users. 

“JioCinema has built a massive following with the IPL. It’s crucial for JioCinema to retain audiences on the platform. Based on the entire new customer acquisition, JioCinema will try to convert some of these audiences to SVOD. This isn’t something new. This is exactly what Hotstar (now Disney+ Hotstar) and SonyLIV did - draw customers with live sports and then retain them with content,” says Sodhi. 

Another leading media consultant, who didn’t wish to be named, states that Hollywood content on OTT in India, doesn’t necessarily bring in a lot of subscribers, but it does bring in paying audiences. He adds this is just the stepping stone to JioCinema’s content library.

As per Vibhor Gauba, associate partner, M&A Consulting, KPMG in India, OTT players in India look at multiple strategies to boost their subscription base. These strategies include live sports content, original series and premium English content. Each of these have a set of takers, in terms of audiences.

“When it comes to premium English content, the potential market is likely to be quite niche, and a price point of Rs 999 per year, is likely to be attractive, as long as this type of content is supplemented by other round the year content, like originals, movies and sports.” 

“However, we believe there will still exist a substantial market for platforms that are targeting the masses with Hindi and regional content, with multiple pricing strategies around monthly packs, ‘mobile only’ lower price points and telco bundles,” Gauba shares.

It looks like JioCinema is currently focussing on multiple audience cohorts. While it has launched premium offerings, it has also been announcing a slew of free content.The platform recently streamed Saif Ali Khan and Hrithik Roshan-starrer, ‘Vikram Vedha’, for free. The platform also announced a slew of Bhojpuri titles that the audiences can stream for free, while watching some ads. 

JioCinema’s price point can be termed on the lower spectrum of OTT premium offerings, compared to the likes of Netflix. Considering India remains a price-sensitive market, the pricing, if paired with appealing content slate, can surely attract the masses. 

Karan Taurani, SVP, research analyst (media, consumer discretionary & Internet), Elara Capaital, feels just HBO and Warner Bros. content, can’t drive eyeballs. 

“Consumers using global content, definitely don’t want to watch ads and, hence Netflix, Amazon, Disney+ Hotstar and other global giants, have an ad-free offering, which JioCinema is trying to target. The IPL being offered for free, is actually to gain traction from the masses for JioCinema, but an ad-free SVOD model, with HBO/Warner Bros. content, will also help target the premium households.” 

“Disney+ Hotstar has had the highest paid subscriber base (61 million - pre IPL) in India, primarily due to the IPL, global content, web series, movies and catch-up TV content. In order to scale up to that level for a paid subscriber base, JioCinema will need to expand its content offerings,” states Taurani. 

He adds that JioCinema’s premium offering prices, show that AVOD monetisation isn’t a sustainable model for expensive content like the IPL, etc.