“Indians are starting to pay for content”: Zee5’s Tarun Katial

The fourth edition of Brew, GroupM's flagship content event was held at New Delhi on January 22, 2020. All about delving deep into the cultures and subcultures that are emerging, the event garnered much insight into audience truths from brand leaders, platforms and entrepreneurs who are shaping the cultural narrative of India, spanning languages, genres and categories.

In his presentation at the event, Tarun Katial, chief executive officer, Zee5, threw light on the emerging trends in the OTT segment.

He began with mentioning that India is a growing economy and that this economic growth is also helping shape the growth of the country digitally.

In a slide highlighting India’s growth story vis-a-vis world economy growth by 2022-2023, he pointed out that India contributes 15.9 per cent whereas China and the US contribute 28.4 per cent and 8.5 per cent respectively.

“Many believe that digital is the top end of the spectrum. Many say it is about Google and searches, but in reality, digital is much more than that,” he said.

Referencing a recent KPMG report, he shared that it divides the population in a rather interesting manner. “It gives you a sense of how people consume digital and where they get their source of digital from.”

The report divides the population into: 'Digital only consumers' – the top end of the market, 'Tactical digital' - people who want digital but also tactically watch linear television, 'Bundled digital' – people who get access to digital content because it is a part of their bundled service by telecom operators or ISP operators, 'Mass consumers' and 'Free consumers'. The number of 'digital only' consumers grew from approximately one million in 2017 to approximately two and a half million in 2018. It is expected to reach five million in 2021. The number of 'tactical' consumers grew from six million in 2017 to 12 million in 2018 and is expected to touch 25 million by 2021.

The overall internet user base is expected to double in the next two years. Rural will become the biggest growth driver, contributing nearly 50 per cent of the total share, Katial said.

Speaking about what’s happening in the OTT space, he said that the market is cluttered given the number of players. However, he pointed out that "it is not as fragmented as people think it is."

Katial said the Indian market has over 20 OTT platforms. He categorised the likes of Zee5, Hotstar, SonyLiv, Voot as broadcasters with network content; YouTube, Amazon Prime, Netflix as global majors; and the likes of AltBalaji, Jio, ErosNow as independent - without network content.

He said that the projected internet users in India by India would be close to one billion (924 million, precisely) by 2023, as compared to 612 million users in 2018. The Indian OTT market will grow three times by 2023, and the annualised growth rate is projected to be between 40-50 per cent for the next five years. “It is not just the free OTT play. Indians are starting to pay for content,” he noted.

Talking about the emerging trends in the category, he said that 40 per cent of the consumers prefer content in regional languages. “We knew this was coming, and therefore our platform has content available in 12 different languages. Apart from the main languages, almost every Indian language has a content play going now. Since most keypads do not support so many languages, voice search is the only way to get content discovery going.”

He mentioned that the segment is seeing hyper personalisation. It helps engage consumers on the basis of multiple parameters like watch history, source of acquisition, connecting one-on-one with respective tastes/interest/affinity level, micro-segmentation, discovering funnel optimisation lookalikes for acquisition, content depth and width and many others.

Katial also spoke of an upsurge in the whole device ecosystem – in the consumption of content , ranging from a small feature phone to a smart TV. Ipsos Prediction 2020 states that 72 per cent of urban Indians will be watching more TV from streaming services opposed to cable TV, he pointed out.

Sales of television sets measuring more than 32 inches have grown by 10 per cent in the offline market and have seen a 90 per cent growth online in 2019 vis-a-vis 2018. This is an outcome of rapid urbanisation of consumers who are showing higher propensity towards new tech adoption and also the massive drop down in price, he said.

Crime and thrill are the key genres giving maximum viewership and subscription return, he said. “Since the category can’t be divided on the basis of demographics, it’s segregated as per the taste cluster – thrill seekers, sitaron ke diwaane, OTT streamers, latest movie buffs, new age women stories, crime lovers, etc.”

Towards the end, he also spoke about how Zee5 has implemented these insights on the platform, using data, technology and content as its three main pillars.