Streaming video market: Every brand is trying to find its special place

Nila Nila Odivaa (Oh Moon Come Here) is the story of Nila, a vampire in love with Om, a human being. The 13-episode series, aimed at millennial Tamilians, will start streaming on Viu from July 24.It is one of the four Tamil shows Viu, a part of the Hong Kong-based $4.7 billion PCCW, will launch.

The Rs 10 billion Eros International’s Eros NOW either owns or aggregates 70 per cent of the intellectual property (IP) of Indian movies in the last 10-15 years. Of its 100 million registered users, more than 7.9 million pay an average of $5 a month (in India) and $30 (overseas) to watch films, making it one of the largest pay-apps from India.

Marathi, Tamil and Telugu are among the most watched languages on Zee5, the Rs 71.3 billion Zee Entertainment Enterprise’s video app. Launched earlier this year, Zee5 has commissioned more than 200 hours of original content each in eight Indian languages. “Our game is languages,” says Tarun Katial, chief executive officer, Zee5.

Welcome to rush hour

In India’s crowded streaming video market, every brand is trying to find its special place. At the top of a heap of the 35 odd video apps sits the $11.6 billion Netflix, known for its cutting edge originals such as the recently released Sacred Games. “We are not into sports or news. We do well servicing the niches. Of the $8 billion on content in 2018, a majority goes to originals,” says Ted Sarandos, chief content officer, Netflix. Many Indian OTT brands are now beginning to agree.

“You can be a khichdi player with movies, originals everything, but eventually a brand is what resonates with consumers. The current broadcast incumbents are great at getting OTT brands out. The question is what does the brand stand for?” asks Ali Hussein, COO, Eros Digital. Vishal Maheshwari, country head, Viu India agrees. “For business to make sense, it has to be target group (TG) focussed. People are still producing for generic audiences, what you see online is plus or minus TV,” says he.

It is nice to specialise

Much of this jostling for the right niche was bound to happen. What has hastened what would have been a jog to a run is overcrowding accompanied by market forces.

India’s Rs 660 billion TV industry reaches over 800 million people who watch TV for about three hours a day. And it has 412 million people with decent broadband connections. The headroom for growth, drop in data costs and rise in consumption has meant that India’s streaming video market has grown much faster than anyone anticipated.

While the 35 apps such as Hotstar, Voot, AltBalaji and others put together get only Rs 25 billion in revenues, millions have been pumped into them by private equity players, broadcasters and telecom firms. The pressure to find the next big hit or find a set of viewers who will pay is huge.

“None of what we are doing is serendipitous. Two years ago, we did a lot of aggregation, some originals and hoped that the khichdi works,” says Maheshwari. But research led it to zero in on the 18 to 34 year old millennials with originals tailored to them. Pelli Gola, its 2017 Telugu original, hit the sweet spot with season three now in the making. While originals account for 20 per cent of the content on Viu, they bring in 60 per cent of its traffic; the rest comes from aggregated content.

Zee5, on the other hand, is going as mass as possible - with both originals and Zee TV content - because that is what Zee is about, says Katial. “This is a great opportunity for broadcasters to go BtoC (business to consumer),” says he. In India, broadcasting is typically a B2B or business-to-business industry since the primary selling is to advertisers, the biggest source of revenues. Going direct to the consumer is an area where Eros, a film studio, has a natural upper hand. The movie business gets more than three-fourth of its revenues from the box-office – that means getting people to walk in and pay.

“I don’t think all genres are suitable for subscription driven video-on-demand (SVoD). The behaviour pattern of the two types of content (advertising and subscription driven) is different. There is the more ‘here and now content’ such as news, how to tie a tie or make Legos. Then, there is the more recreational, lean back content,” says Hussein. Originals and films are subscription driven while short form videos like the ones made by Bhuvan Bam or AIB are free and ad-driven.

However, professionally created content gets more than three-fourths of the traffic on most apps. And here, “The big challenge is the paucity of creators for this medium. This is different from movies and TV. The creative strength is still developing in the ecosystem,” reckons Maheshwari.

The second challenge is monetisation. Online video makes just 3.7 per cent of the TV industry’s revenues. The ad rates, even for the best or biggest video apps, don’t go beyond $3-7 per thousand viewers compared to several hundred times that for TV. Globally, too, YouTube, the biggest ad-driven streaming brand, and Netflix, the most successful pay one, remain exceptions.