Gone are the days when Indian consumers merely watched short, snaky videos on their mobile phones. Watching a 20 minute television show or even a film on the mobile phone has become a way of life. According to a recent report released by Star India's over-the-top (OTT) platform, Hotstar, 2017 not only saw a five time jump in online video consumption, more than 96% of watch time on Hotstar came from videos longer than 20 minutes. Even more interesting is the fact that it is actually consumers from smaller towns and cities who are watching more online content than their metro counterparts. Cities with population of 1 lakh and 10 lakh, according to the Hotstar report, witnessed the highest growth in watch time.
No wonder OTT platforms are spending crores on creating original content. It is well known that the likes of Amazon Prime and Netflix have tied up with virtually every film production company to create cutting-edge content for them at a huge price (Rs 1-Rs 2 crore per episode). Star India has paid a whopping Rs 16,000 crore to bag the media rights of IPL, a large part of which is expected to be monetized through Hotstar. It's not just the biggies, the others too are not just chalking out serious content strategies, but are also evaluating various business models to monetize the content. Zee Entertainment has recently launched Zee 5, which promises 100,000 hours of content at launch and would be adding another 50 hours of additional content on a daily basis. Zee 5 is a freemium model, where all its original and international shows are available at a monthly subscription of Rs 150. "At launch we will have six original shows...next year we will have 100 original shows," Amit Goenka, CEO, Zee International and Zee 5 Global had said in a recent interview with Business Today.
Film-maker, Vikram Bhatt, has recently launched an OTT platform, VBontheweb, which he calls a multiplex on the web. "I will have different shows, you come, buy a ticket and watch the entire show. There will be no monthly subscription and I will not go the A-ward way either. I think A-ward is extremely constricting because the advertisers will more or less decide the content. They don't want violence, sexuality, they don't want anything that the audience wants. They want blandish, non-controversial kind of content. They are more GEC oriented. I don't think A-ward will work until you become such a big OTT player that brands start advertising just as they do on Youtube. To get advertisers interested one has to clock huge numbers," says Bhatt. His dictum is to sell shows at the price of a vada pav. "It's at Rs 18, because that's what a vada-pav sells at my office. You pay 18 and binge the entire show," he adds.
While the new and the established are going all out to create original content, telcos such as Reliance Jio are also going all out buying out content creators. After all, over 90% of online content consumption happens on the small screen, the mobile phone, says the recent Hotstar report. Reliance bought a 25% stake in Balaji Telefilms for Rs 143 crore in July last year, and more recently picked up a 5% stake in Eros International. Though there is nothing in the offing, but Zee's Goenka in a recent interview with Business Today, had also said that the company is open to evaluating interesting content company acquisitions.
The OTT industry is barely 3-4 years old and most of the players are just about testing the market, and consolidation already seems to be in sight. However, it is indeed the best time for content creators as the demand for original content is going to be steadily on the rise.