How to widen the stream will be 2023’s challenge

Updated on Jan 25, 2023 04:14 PM IST

As the year winds down, India’s over-the-top (OTT) streaming video services segment that boasts of more than 40 platforms including Netflix, Prime Video, Disney+Hotstar, Zee5 and Voot, among others, is bracing for fresh challenges in 2023

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ByShuchi Bansal

As the year winds down, India’s over-the-top (OTT) streaming video services segment that boasts of more than 40 platforms including Netflix, Prime Video, Disney+Hotstar, Zee5 and Voot, among others, is bracing for fresh challenges in 2023.

Topmost is enrolling small town audiences, expanding the number of paid subscribers and increasing the average revenue per user.

Earlier this month, a report from consulting firm Ormax Media spoke of 79% OTT penetration in the metros underlining the need to chase small town consumers for growth. India has 119 million active paid OTT subscriptions across 49 million paying audiences. This translates into an average of 2.4 subscriptions per paying consumer, most of whom live in Mumbai, Delhi and Bengaluru, the report said.

But going forward, subscription growth for OTTs will come from more people paying for subscriptions rather than the same people paying for more subscriptions. “I don’t foresee a consumer increasing the number of services she or he is paying for, from, say, 2.4 to 5 or 6. Platforms, if they have to expand, have to get new people into the fold rather than expect existing subscribers to pick more paid apps,” said Shailesh Kapoor, founder and chief executive at Ormax Media.

Importantly, streaming subscriptions that reported nearly 40% growth rate during the pandemic lockdowns, are now clocking a more modest 20% overall growth rate. “In the top 8-10 cities this is lower at 10%, reflecting a sort of saturation and the need to tap the non-metros and more mass segments,” Kapoor said.

But getting paid subscribers from these smaller markets where people rely on user generated content and free short video apps for entertainment will be a challenge. To crack smaller markets, global streaming platforms may also need to relook at their films and shows created from a big city lens. “To go beyond the top 15 cities, the nature and treatment of content needs to change and become more accessible, inclusive and mass,” said Kapoor, who speaks from experience of offering consulting services including tracking and testing of content for India’s media and entertainment sector.

But Nimisha Pandey, chief content officer (Hindi Originals), at Zee5 believes if you get the story right, it cuts across audience segments and geographical boundaries. Platforms are already designing content for small-town audiences and Zee5 is also widening and diversifying its content slate to address both niche and mass segments with growth coming from metros and non-metros. For stories to work in tier-2 and tier-3 towns, the cultural nuances and characters need to be authentic, Pandey said.

Gautam Talwar, chief content officer at MX Player agrees with Pandey that setting a story in a small town is not enough. Their cultural milieu, conflicts and struggles must be explored too. “The show that best represents these, finds connection with the audiences,” said Talwar citing the success of shows like Ashram, Raktanchal and Samantar on his platform.

An executive with an international streaming company, however, believes that as long as films and shows are broad-based, they work. “A lot of our seemingly niche shows have resonated in UP and Punjab,” they said, declining to be named.

In December 2021, Netflix reduced its subscription rates across plans by 18-60% to woo viewers in the small towns. The move helped the company expand its subscriber base to 6.5 million. In a recent blogpost, Netflix said Darlings, its Hindi film starring Alia Bhatt, enjoyed the highest opening ever for any Netflix film in India.

MX Player’s Talwar believes that well-narrated stories will find audiences who will pay for them. Its show Dharavi Bank, for instance, prompted a four-fold increase in its subscriptions. “You need to understand what is valuable to that consumer, and price it well enough for them to convert into paying customers,” he said.

Pandey said it’s not about one market growing over the other, though smaller towns certainly have more headroom for growth owing to increasing penetration of smartphones coupled with affordable data plans.

To address mass viewers, streaming companies may need more comedy, family dramas and love stories that dwell on emotions rather than on style and craft, Kapoor said. In an interview last month, Matt Forde, managing director, international production and formats at BBC Studios pointed out that the very high-end premium content used to gain initial subscribers may not be what streaming firms need now. Relationship dramas may help build new audiences but it’s still not clear if streaming platforms need to become more like traditional television networks just yet.

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