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OTT, video apps can work progressively with cable & satellite platforms

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MUMBAI: The market for Over The Top (OTT) services has been rapidly growing in the United States. However, can the same model be adopted for the Indian market? That was the key question asked at a discussion at FICCI Frames 2015 on the topic - ‘Clash of the Walled Gardens: OTT and Video apps versus cable and satellite.’

Joining the panel were Zenga TV founder and CEO Shabbir Momin, DGive director and CEO GD Singh, IndiaCast group COO Gaurav Gandhi, Videocon d2h CEO Anil Khera, Eros Digital COO Karan Bedi, Hungama.com CEO and Hungama Digital COO Siddhartha Roy and Hinduja Ventures whole time director Ashok Mansukhani. The session was moderated by Whats ON chief executive officer Atul Phadnis.

Sharing some insights from the US market, Gracenote general manager - video Richard Cusick said that according to a study conducted by the company, nearly 50 per cent of the US broadband households used OTT video services. Young viewers were particularly driving the change as 18 to 24 year olds watched less than half as much traditional TV as 50 to 64 year olds. “Netflix for example has 57 million subscribers worldwide and is a top OTT service provider,” he said.

Cusick said the study increasingly found that networks and studios were resorting to unbundling to single channels as well as live TV bundles. "In such a scenario, consumers benefit the most as great content is served to them," he said.

The question posed to panelists was whether the US implications were similar to that of India and if cable and DTH operators were changing the landscape? Gandhi felt that the implications were not similar to the Indian market because channel specific models like HBO were not available in India. “As a content broadcaster or distributor, the US markets are very clear that they will follow a proper pay model. Here it is still very disruptive,” he opined.

Moving to the experience of launching an OTT in India, DGive’s Singh said that while they still struggled to generate the right revenues, they did in fact receive 25 million downloads. He said when his company approached someone from the US for guidance for the company’s growth charter in India, the executive told him, “If you’re buying content, you cannot give it for free to audiences.” That was a major learning from the US market.

On the content front, Singh said that currently the company had 30 per cent of its content set under the pay wall, which was premium content. “We sell our service for $1 per month per subscriber. We have a million users paying us since we are screen, operator and consumer agnostic. We are looking at breaking even in the next seven to 10 months.”

Sharing his experience, Momin said that Zenga TV had started in 2009 and he was happy with the response from users. “What was surprising in the initial stages was that we saw response patterns coming in from Tier II cities. We now have 20 to 22 million active users per month and have been profitable for the last three years,” he informed. The company also launched a show called India’s Digital Super Star on its platform, which sold sponsorship slots.

Bedi opined that Eros Digital had 14 million active users, wherein the company followed a transactional as well free model that catered to Indian audiences as well as NRIs. “Some key points for our industry is that we will take a leap; a steroid growth will be seen. Two, revenue models like ad dependent, subscription based, free as well as paid will have to work in tandem,” he said.

The true value of the customer in the coming years will move towards mobile screen consumption, informed Roy.

Speaking from the perspective of a direct to home (DTH) operator, Khera was of the opinion that while OTT players may have a million plus subscribers, the content from OTT was for second screen consumption. Technology like 4K is only for television. On a lighter note, he added, “India gets entertained heads up and not heads down.”

Mansukhani too had a similar opinion. According to him, being an old cable company didn’t mean being out of date. He said that they too provided pay channels on a pre-paid model. “Most Indian homes today use multiple screens. It doesn’t matter who wins. There is space for all as content is being consumed via tablets, mobiles as well as television.”

Mansukhani went on to compliment Star India’s Hotstar app saying that it was a fantastic proposition.

“As a businessman, I am interested in exploring various opportunities but I’m worried about providing free content as high content cost is not justified in providing the content without a price tag. I am against giving free content on OTT,” Khera opined. He also hinted at Videocon d2h entering the OTT space but refused to give any details.

Speaking on the challenges of the OTT space, Roy said that for them to benefit from the digital advertising pie, the pie itself should grow in order for profits to trickle in.

The notion that OTT platforms are for free should be broken. “OTT is about the bundle and there is no choice if one has to pay or not. Cable companies are our allies as they provide us pipes for distribution,” Bedi said.

Having the last word, Mansukhani said that all stakeholders should come together and ask customers on the kind of content and pricing for platforms. The profits could then be shared, he suggested.

In conclusion, the panelists agreed that the three key challenges were cash flow, content windowing and specific business models.

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