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Media 2018: OTT party could end soon

India is undoubtedly a country of contradictions, and the same is true even when it comes to media consumption.

twitter-logoAjita Shashidhar | December 31, 2017 | Updated 12:03 IST
Media 2018: OTT party could end soon

India is undoubtedly a country of contradictions, and the same is true even when it comes to media consumption. There are millions being spent on creating edgy digital content. It's not just Indian media companies but also multinationals such as Netflix and Amazon Prime are battling to attract the eyeballs of 1.3 billion Indians.

On the other hand, Star India relaunched its second general entertainment channel Life Ok as Star Bharat, a free-to-air channel on DD Free Dish ( with brand new content). Star Bharat has been challenging the company's flagship channel Star Plus and also the likes of Colors and Zee. In fact, free-to-air channels have grown phenomenally in the last one year and advertisers have been more than happy to spend mega advertising bucks on them despite ad spends drying up due to demonetisation and GST, as they help them reach out to masses deep down the country.

However, it's video consumption on smartphones and tabs which clearly dominated media consumption in 2017. Thanks to Jio offering free data for most part of the year and the other telcos following suit with irresistible data plans, average data consumption in India increased to 8-9 GB per month from 1-2 GB, and it is videos that were most watched. Indians are watching full length movies and shows on their personal devices and not just short, snacky videos.

OTT platforms are spending crores per episode on creating content as they experiment with both advertising as well as subscription led models. There are over 25 OTT platforms in the country, and a sizeable number of consumers have started consuming entertainment only on their personal devices. The last one year also saw leading film production companies, be it Excel Entertainment, Red Chillies or Dharma Productions signing content deals with the likes of Netflix, Amazon Prime and Hotstar. They are not only creating shows for these platforms, they are also releasing their films on these platforms literally within a couple of weeks post their release in theatres. In fact, footfalls in multiplexes are known to have dipped this year.

Consumers are frequenting them only when there is a big ticket, star-studded release happening. So, consumers are not just looking for value for money but also value for time entertainment, with no compromise on quality. This explains why OTT platforms are spending crores on content. Are these steep content investments justified in terms of profitability? That surely is debatable.

In fact, the one big reason known for The Walt Disney Company spending a whopping $52.4 billion on buying 21st Century Fox is to be able to counter FAANG (Facebook, Apple, Amazon, Netflix and Google), where bulk of the media and entertainment action has moved on to. So, at the IPL auction earlier this year, there were only two broadcasters in the race, the largest bidders after Star India and Sony Pictures Network were Facebook and Airtel.

While the mega Disney deal is currently stealing headlines, the other big investment that captured headlines in India in 2017, was Star India winning the IPL bid by paying close to Rs 16,000 crore. The obvious question is whether Star's investment on IPL is too much? Well, the analyst community's take on this is that monetising IPL may not be easy, but since it is a successful format, advertisers will be more than happy to spend a premium on television. So it's going to be both television and digital that will help Star India cover its IPL investment. Star India is talking about airing IPL in regional languages so that its able to reach to more audiences.

India is clearly a market where both television and digital will sustain. In fact, the OTT party could end soon, as it is only those with deep pockets that will be able to sustain.

Coming to the print media, the entire 2017 has been a period of reinvention. Print majors have been experimenting with digital, though a clear business model hasn't really evolved.

So, will the coming year see OTT domination? Quite unlikely.

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