How streaming wars have intensified the fight for ad rates and subscriptions

With the streaming wars heating up and the OTT space becoming crowded, advertising has also become a quintessential part of it. While consumers are increasingly opting for OTT services, companies are also venturing into this line of business.

After Flipkart,  Walmart will soon be launching its streaming platform, Vudu. According to the Pitch Madison Report 2019, the advertising industry has grown by 14.6%, and in 2019, the market has grown by 16.4%, taking it to an all-time high of Rs 70,888 crore.

With the advent of Reliance Jio optic fibre, the competition has become even more fierce. According to Anup Sharma, Independent Marketing Communications Consultant, “Post the recent TRAI tariff regime the subscription costs of most TV channels have become expensive and according to a study by Velocity MR, it is expected that 80% of people may switch to online streaming platforms such as Netflix, Hotstar, Amazon Prime. Amazon India had launched its loyalty program Prime at a promotional price of Rs. 499/- with a bundled offer of content streaming, aware that video content and entertainment will play a key role in bridging the gap for customers to experience e-commerce by hooking the viewers into shoppers”.

He also added, “India’s OTT industry now includes MNC players like Amazon’s Prime, Netflix and national domestic and regional players Hotstar, Zee5, Voot, BalajiAlt, etc. While most OTT players such as Netflix and Hotstar are currently are on the subscription model, the game will again change as Reliance Jio, with 3.25 lakh route km of optic fiber network, plans to disrupt the market with a bundled HD TV, broadband and landline phone services and over-the-top (OTT) content all coming at a very competitive price”.

It seems that OTT has taken root and is ready for take-off with an increasing number of players. Going from just 9 players in 2016 to 30 OTT players and counting.

Talking to Zubin Dubash- Chief Operating Officer (Digital) at Shemaroo, about how this model will work for the new players in the market with everyone scrambling to be a part of streaming wars.

Dubash said, ”Video is the most engaged internet use case today with 87% penetration across smartphone users. The e-commerce market is 90m MAUs whereas the video streaming market is 300m MAUs. By adding Video into a shopping app they are attracting users via free video and inducting them into the shopping experience, thereby growing the shopping MAU base”.

Talking about how the advertising rates will shoot up with the subscription rates, he said, “Advertising on OTT is gaining huge demand from the advertiser community owing to stickiness and richer profiling of audiences. Subscription, though barely 3%-5% of the video streaming user market, is growing rapidly with increasing adoption of paid content”.

Dubash gave an insight into Shemaroo’s OTT platform. He said, “We believe every segment is unique and has a unique set of content needs,  which is why we offer a depth of content in niches like Bollywood Classics, a hugely underserved, high demand segment. Devotional content and regional content such as Gujarati and Marathi offer a flurry of movies and plays (nataks).  He also revealed that there is a game-changer service coming soon on ShemarooMe.

 The cluttered market gives customers a huge array of platforms to choose from. They have a huge variety to select, watch and pay. So, how do customers react in the cluttered market and how does a platform make a niche for itself in the crowded space? Jyoti Bansal- Chief Executive Officer, PHD Media India replied, “The streaming space is jumping many steps and that’s only natural. If we have hundreds of TV channels and then billions of views on YouTube, having multiple streaming players was only a matter of time.  Each player will have to define its positioning and audience and build a content and subscription strategy accordingly. The ones who don’t try to be everything to everyone will most likely be the winners”.

“Streaming is doing to entertainment today what satellite TV did more than 25 years ago. As PHD, we are bringing the same rigour to evaluating and using streaming platforms for our clients, albeit with metrics suited to this format”, added Bansal.

Dubash seconded Bansal’s thoughts by saying that today customers are content loyal, not platform loyal. They follow the show and not the platform. I think the OTT service that creates platform loyalty will eventually create significant differentiation in the market.

The streaming wars are another way for advertisers to make money in the cluttered market. Forming a niche for themselves is the urgent requirement of OTT platforms to attract viewers as well as advertisers.

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