Report on Shemaroo

#Forecast2021: How technology, infrastructure upgrade will shape OTT ecosystem

All leading platforms will focus on better user experience.


KOLKATA: The over-the-top (OTT) platforms have seen accelerated customer acquisition, especially post-Covid2019. To increase the stickiness of fleeting users, the platforms are adding more and more content to their libraries. But what is more important in the crowded ecosystem of India is a seamless user experience. As all the leading players have already widened their user base and revealed strong content line-up, the coming year will see more discussion, higher effort in the tech aspect of the equation. Robust internet penetration, fibre roll out, affordable smart TVs will also shape new consumption trends for the industry.

While statistics often throw light on the thriving OTT market in India, one of the biggest challenges that remain undiscussed is the churn rate. Analysts estimate most of the leading players have over 50 per cent churn rate in India. Especially, when more than 30 players are offering a plethora of content, one bad experience is enough for a consumer to switch to a competitor.

User experience to take up more space:

“The primary goal should be the user experience. As an industry we have been content-led, now we need to focus on user experience, recommendation, personalisation. I don’t think we have done much yet as an industry,” Viacom18 Digital Ventures COO Gourav Rakshit notes.

The first step towards a better user experience can be a stronger recommendation engine. A Zee5 spokesperson says studying the consumer’s content viewing habits has become even more essential for the OTT players to cater to their content needs in the wake of the pandemic. With the increase in demand of high-quality content across genres, diversification of content, personalisation and recommendation based on watching history will play key roles in staying relevant, the spokesperson adds. MX Player CEO Karan Bedi, who terms the platform as an equal blend of tech and media company, says there will be a lot more innovation in these areas.

PwC India media, entertainment & sports advisory partner & leader Raman Kalra is of the view that content discovery is a challenge across all OTT platforms, especially with so many shows and movies coming out. Much deeper investment needs to go into content recommendation engine and personalisation to be able to recommend the right set of content, Kalra suggests.

Identifying this market gap, a new type of app has emerged. Flixjini, an app to help users find the right movie to watch, by aggregating content from all streaming services in one place, found takers during the lockdown. When Jio launched JioTV+ during RIL’s last AGM, it promised to ease content discovery.

“Technologies such as AI and ML, big data, and voice-assisted search will play an important role in content discovery and enhancing the overall experience of content viewing. It will also help in bridging the urban-rural divide. In an increasingly cookie-less world, contextual targeting will become the norm,” the Zee5 spokesperson adds further.

Greater measures to tackle piracy:

While the worldwide lockdown in 2020 resulted in the emergence of new users, it also saw a spike in illegal streamers as well. Illegal streaming, or piracy by any other name, could cost the industry around $12.5 billion by 2024 and the only way to curb the threat is a concerted effort by service providers. Content is being extracted from the devices from where it is legitimately supplied, along with copyright violations like including identity theft and skimming of customer credentials.

2021 will see 360 degree investment in content security. OTT platforms are expected to look at measures like Digital Rights Management (DRM) solutions, forensic watermarking, two-step log in authentication. “We were engaging with the government of India for data protection laws and we stressed content protection as one of the most important clauses that the lawmakers should take up. We are seeing good results from that engagement. We are hopeful that a new law that doubles down on copyright protection will be introduced by April,” Zee5 India technology head Tushar Vohra had said in a webinar hosted by Indiantelevision.com.

Furthermore, in the wake of WhatsApp privacy controversy, Telegram registered around 25 million new users in just three days. Telegram’s overwhelming popularity as an alternative to get free access to any new movies or shows could be a growing concern for streaming services as new users flock to the platform.

Telco deals, 5G optimism:

From the infrastructure point of view, the telecom service providers will help OTT platforms to grow further. Within the first month of 2021, Amazon Prime Video India has launched a mobile only plan in collaboration with Airtel. All Airtel customers on bundled pre-paid packs can avail a 30-day free trial by simply signing up to Amazon from the Airtel Thanks app using their mobile number.

Telcos will go more aggressive this year as the content deals will help them to survive by retaining subscribers and higher ARPUs. On the other hand, partnerships with telecom service providers will continue to account for a larger chunk of SVoD revenue for broadcaster-led and other OTTs in the near term, a recent report from Elara Capital emphasises.

“From being an inadequate data nation hardly a few years ago, India today leads the world in data usage at 9.8 GB per month as per a Swedish telecom equipment maker Ericsson. Indians are devoting nearly three hours a day on their smartphones. More than 30 per cent of this time is spent on entertainment,” ALTBalaji marketing, direct revenue and analytics senior vice president Divya Dixit highlights.

Additionally, OTT players are now optimistic about 5G rollout. While the debate about the implementation of new generation technology is still unsolved here, business tycoon Mukesh Ambani said Jio will pioneer the 5G revolution in India in the second half of 2021. One may recall that the entry of Jio and the consequent data democratisation was a landmark moment in the country’s streaming landscape.

“With 5G, the probability will be extensive, and the industry will take a giant leap. While it holds prospect to impact and revolutionise the entire consumer experience profoundly, OTT video consumption is expected to draw immediate gains from high speed 5G networks,” Dixit shares. Additionally, the advent of 5G will create many opportunities for content creators to use AR and VR to make the content streaming experience more immersive, the Zee5 spokesperson adds.

Device ecosystem to grow further:

Although the device ecosystem is far behind the telcos yet, smart TV and other connected devices are seeing gradual uptake. Prices in the smart TV segment have been dropping with Chinese and Indian brands flooding stores in both brick and mortar and online market places. Along with that, connected devices like Amazon Firestick, Roku, Tata Sky Binge, Airtel Xstream are also witnessing an uptick in consumption.

 As more viewers in urban areas migrate to watching their content on CTVs over traditional legacy television sets, experts believe this segment holds high potential. Top executives from Disney+Hotstar, Amazon Prime Video acknowledged that CTV viewership of OTT platforms, which had already been on an upwards trend, has bumped up more during the Covid2019 pandemic. With the maturation of the market, family viewing is also growing. New players like Samsung TV Plus, Samsung’s free streaming service for its smart TVs and Galaxy phones which is coming to India in 2021 are trying to tap the market.

“With the increase in high-broadband connectivity and affordable smart TVs, the overall connected devices ecosystem presents a huge headroom for growth in the future of the media and entertainment industry,” says the representative from Zee5, a platform which has been highly aggressive in the segment.

Home broadband to catalyse growth:

And finally, the growth in fixed line broadband will give OTT platforms another boost. With work from home, school from home, Indians have adopted more home broadband connections in the last year. The latest statistics have shown that not only bigwigs like Jio and Airtel, but the smaller players have also expanded their customer base.

India’s fixed broadband market is projected to grow at a CAGR of 18 per cent between 2020-25 to reach 45 million subscribers with more than 82 per cent of subscribers through fiber, a recent MPA report states. While leading players like Netflix, Amazon Prime Video, Zee5 have already entered multiple ISP partnership, 2021 will see more tie-ups in this arena. 

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