Benita Chacko

“The cost of great content can’t be borne by subscription alone”: Chanpreet Arora, Voot

What will power the OTT revolution in India- subscriptions or advertising revenue?

As the streaming business in India soars, much of the focus has been on the subscription aspect of the business and the content that compels the viewers to pay up. But the reality is that advertising pays more of the bills, than subscriptions, and at a lower cost, too.

A recent report by the Singapore-based Media Partners Asia reveals that about Rs 8,250 crore of OTT’s topline of Rs 14,000 crore in 2021, came from advertising. Subscription revenue made up the rest, Rs 5,750 crore.

That’s exactly Chanpreet Arora’s point. The SVP and business head, Voot AVoD (advertising video on demand), thinks that the role of advertising in OTT’s India success, is under-appreciated.

In an interview with Sreekant Khandekar, co-founder of afaqs!, at the recently held vdonxt asia Week presented by Voot, she passionately explains her point of view.

Edited excerpts:

Could you briefly talk about Voot’s journey, and why you’re so bullish on advertising?

The OTT business is about six years old. Voot was one of the first platforms to come up. It has been successful in leveraging its content in the television ecosystem for digital. We created a TV-led OTT universe.

Voot is now a multilayered, multilingual entertainment platform. It is a freemium service, with Voot Kids and Voot Select as its very successful subscription platforms.

Are OTT players, with a legacy in broadcasting, more comfortable with advertising, than pay?

If you look at the entire media business, TV and film are the ones that have delivered strong pay revenue. And within TV, sports and entertainment have worked – but not news. That same grammar will work in digital.

Today, 80 per cent of the revenue in the media business, comes from advertising. And, why is that? It is because India is a low-subscription or a no-subscription market. If the OTT players – including Voot – that are playing the subscription game successfully, continue to create great content for the audiences, the cost can’t be borne by subscription alone.

When you consider an ad-based versus a pay-based path, do these demand diametrically different approaches to running a business?

Absolutely! It's different on several counts. If you look at the SVoD play right now, it's about building loyalty and habit, more than revenue. It's about attracting a user to your platform consistently with premium content that they don’t have access to elsewhere. That's why so much money is going into building high-powered content.

On the AVoD platforms, meanwhile, it's a grab for market share, led by the TV players. Initially, it was about servicing the catch-up TV audience. But now that we've hit critical mass, the digital-first audiences on Voot, for example, aren't necessarily going first to TV.

There's this huge, new audience that is coming first on digital, sampling us and then using TV. Typically, 65 per cent of our audiences on Viacom’s digital platforms, are Gen Z (under 25). That's not the demographic of TV. So, it's no longer about catch-up TV in the same way as it was earlier.

SVoD is targeting people, who're transacting online and willing to pay extra for exclusive content. AVoD is trying to be the first port of call, where you start to sample digital-first content, TV content and content in different formats.

If you're earning Rs 100 through subscription and the same amount through advertising, would the subscription path demand a disproportionately high degree of investment?

Absolutely! It's not even comparable. It's a multiplication factor, because the costs of content and consumer acquisition are extremely high. The interesting thing is that our TV content is still very appealing and inexpensive.

What's the challenge in getting more advertisers to spend more money on streaming?

I don't see it as a challenge, but more as an evolution of the ecosystem. We're already looking at certain reports estimating that the OTT video business will command anywhere between 45 and 50 per cent of the total video advertising in three years. That's pretty aggressive. I don't think we're struggling to establish why OTT's the right place to advertise.

We now need to invest in high quality entertainment, data and analytics, and building solutions through ad tech. The OTT industry isn't in a challenging stage, where we're questioning why we should be invested in. It's more about how much.

'Bigg Boss' has become quite huge (online) for your company. What lessons can you draw from that?

Launching 'Bigg Boss' OTT as digital-first before 'Bigg Boss' on television last year, was one of our biggest punts. And, we did three things right. We reimagined the format for the digital audience. The duration was six weeks, compared to four-and-a-half months on TV.

There was user participation in deciding what would happen inside the house on a day-to-day and weekly basis. And, we were able to weave in the brand challenges not just through tasks, but also with the content that we created on the digital platform around it.

Third-party studies show that some of our primary sponsors got phenomenal value, much higher than they'd expected.

Are there other properties that you're going to take online this year?

Yes, we're starting this year with the 'Khatra Khatra' show. It's a light roast comedy show. You'll see us reinvent some old IPs and bring in new ones across languages.

Watch the full interview here:

Nepa India

Nepa India is a consumer science firm helping some of the world's most reputable brands in more than 50 countries to unlock growth and profitability across all main areas impacting their customer relationship: Marketing Optimization, Innovation and Customer Experience.

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Nepa is known for its straightforward, no-nonsense consumer insights approach to nurture and grow its client's brands. Nepa also creates thought-provoking and powerful thought leadership content through its marquee properties, Originals & Espresso.

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