This article analyses the adoption of OTT by the cinema industry and consumers in India in the latter half of the pandemic lockdown period. The article also elaborates on the OTT trends that are catching on in the post pandemic era and explains why it’s the new normal of cinema in the future.
Entertainment Industry in the Pandemic
At the onset of the pandemic, many industries suffered layoffs and were forced to wait on the sidelines to see when they’d be able to return to normalcy. With industries being forced to adapt and be more receptive to help employees with their workplace engagements, one such is the case of the entertainment industry. With the whole country in lockdown, the livelihoods of small-time actors, support staff, producers who had their money invested in mega-budget projects, were all affected and essentially came to a standstill.
With cinema screens and multiplexes being closed through 2020, production houses found a saving grace for their movies in the way of OTT (Over-The-Top) platforms, and OTTs jumped at the opportunity to be able to expand the delivery of their content to the comfort of customers’ homes. The exposure of audiences to OTT (over-the-top) streaming content in the 18 months of the pandemic in India has pushed content creators (film and TV content) to jump on the bandwagon of exclusives of video OTT favorites Netflix, Amazon Prime Video, and Disney+ Hotstar. Other players began releasing content specifically for local and regional audiences.
Cinema Industry welcomes OTT
With Actors and film crew coming together to support the entertainment industry, then started a plethora of direct-to-OTT movie releases for even the popular mainstream stars across Indian cinema like Saif Ali Khan (Bhoot Police), Dhanush (Jagame Thandiram, Karnan), Amitabh Bachchan, and Ayushman Khurrana (Gulabo Sitabo). While even when cinema halls across the country began opening in FY 21, the films that were released in theatres almost always were paired with an OTT release date a few weeks into the screening. Even cinema studio giants like Marvel were no different in this regard with the Disney+ Hotstar release of Black Widow, Shang-Chi, and Eternals (as well most definitely) within a month of its theatrical release.
And it’s not just the big boys of the OTT industry that are eating this pie. Ever since the pandemic forced the theatres to close, the regional OTT market has also been booming. For example, around 15 OTT platforms have started in Malayalam alone over the last year, minting close to INR 40 Cr in revenues. This number is expected to increase significantly over the next five years with FICCI estimating regional language consumption on OTT platforms will cross 50% of the aggregate market.
While OTT leaders like Amazon Prime and Netflix rope in A-list stars for commercial blockbuster big-budget movies, regional OTT concentrates on small-budget movies that boast amazing content. The success of small movies like “The Great Indian Kitchen” prompted Amazon Prime to later acquire their streaming rights as well. Many debutant directors and actors that get sidelined from theatrical releases are reaching consumer homes through opportunities and content provided by these regional OTTs.
OTT Consumption and Growth
According to the 2021 FICCI & EY media and entertainment reports, 28 million Indians bought online subscriptions in 2020 (up from 10.5 million in 2019), leading to a 49% jump in digital revenues. Additionally, the report mentions that 284 million Indians consumed content that came bundled with their data plans in the year. OTT players have seen accelerated customer acquisition amid the pandemic, and to retain the fleeting customers, the OTT players, as well as the players of the supporting markets, are shaping new consumption trends for seamless user experience.
While the likes of Voot, MX Player, AltBalaji (Avalon was even involved in the initial launch of the AltBalaji OTT) were making inroads into the local Digital subscription space even before the pandemic, it gave them a much needed boost.
The pandemic saw renowned studios launching their own OTT platforms, to grab as much of the market as possible. In March 2020, once Disney Studios introduced “Disney plus” in India through Hotstar, even the Discovery Channel launched Discovery+, the India-focused video-streaming service. Lionsgate, the Hollywood studio behind films like La La Land, Hunger Games, and The Twilight Saga, also launched its OTT service in India in December 2020. And with so many OTT platforms out there, Reliance even rolled out its integrated OTT service JioTV+ in July 2020, which will aggregate content from 12 video streaming platforms like Netflix, ZEE5, Disney+ Hotstar, Amazon Prime Video, Eros Now, JioCinema, YouTube, etc.
According to the 2021 Netscribes OTT report, the video OTT market was valued at INR 8,700 Cr in FY2020, and owing to the presence of 40+ OTT streaming platforms (national and regional) and a surge in video consumption over the past year, the market is expected to grow up to INR 30,000 Cr by FY 2025.
OTT trends that would shape the post-pandemic market
The pre-existing growth of OTT received a boost in the form of the pandemic and from here there is no looking back for the industry.
Audience-tailored content is King
With direct-to-OTT original content becoming more and more popular, the crowning achievement for OTT came in November 2020 when Netflix India original Delhi Crime won the International Emmy for Best Drama Series. With brands needing to offer a differentiated value proposition to their customers, this has primarily been either on a demographic or a psychographic level. More evidence of this can be seen with the continuous emergence of local OTT platforms like Hoichoi (Bengali), Aha (Telugu), Koode & Manorama Max (Malayalam), Planet Marathi OTT (Marathi), CityShor.TV (Gujarati), all within the last year.
User experience is given top priority
With a plethora of content out there for consumption, streaming platforms have begun to understand the rising importance of User experience. From user-friendly content navigation to proprietary content suggestion algorithms, OTT platforms are introducing new features, and perfecting existing ones to keep the user engaged and on the platform. Netflix introducing its “Play Something” feature to overcome the over-choice bias of users, introducing short videos (like that of Tik-Tok) for Kids’ consumption are clear signs of this. Almost all shows now come with subtitles (the anime/manga trend has caught on to other genres) and/or dubbed into other languages to reach wider audiences. An Indian consumer who loves the thriller genre can enjoy Korean thrillers by means of subtitles/dubbing. Prime examples for these are the exploding success of Netflix Originals like Money Heist (Spanish), Squid Game (Korean), and Dark (German) in India. The success of any OTT platform is now equally decided by the content they create/aggregate and the user experience they provide.
Bundling OTT for monetization
With different players adopting different models for revenues, platforms like Voot, MX Player rely on advertising for major portion of their revenue whereas platforms like Netflix, and Amazon Prime Video operate purely on a subscription model for their revenues. Platforms like AltBalaji, Disney+ Hotstar, Sony LIV, ZEE5 also provide services to customers on a pay-per-view basis allowing audiences a chance to sample new content without having to subscribe to the entire library. Collaborative subscription packages have started to become more and more popular compared to a standalone subscription model for monetization. Being able to offer a bundle of platforms and content at comparatively affordable prices ensures users don’t have to choose between two competing channels when they can have both and access their preferred content, making it a win-win situation for the platforms, and the customers.
Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institution or organizations that the owner may be associated with in professional capacity, unless explicitly stated.
M Karthik Kumar
Karthik has 3 years of experience across Sales, and Consulting. As a Consultant, he has experience working on engagements in telecom, agribusiness, and consumer durables. He is a graduate of IIT Patna and IIM Tiruchirappalli. He enjoys badminton, hockey, traveling, and binging TV shows.