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Even with the rapid growth of mobile customers enjoying commoditised video services, further monetisation in India has been challenging for even the most popular streaming platforms says a study from Ampere Analysis.
Ampere India SVOD 26Jan2021
India has been the third largest subscription video-on-demand (SVOD) market globally by number of subscribers Since 2018, surpassing 100 million in 2020. And the analyst noted that in their infancy, SVOD services such as ALTBalaji and Eros Now have looked to telco partnerships to grow their customer base, paving the way for the rise of super-aggregators.

Indian SVOD platforms have had diverse and comprehensive partnerships with mobile operators. Many are bundled into post-paid plans, giving them extensive reach, marketing, and addressing the billing and payment hurdles inherent in emerging markets.

The leading mobile operators currently offer numerous SVOD services. Super-aggregator Reliance Jio has become a market disruptor since launching in 2016. It now offers over 10 SVOD services including international products such as Netflix, Amazon Prime, Disney+ Hotstar VIP as well as most domestic services. Other major operators are currently offering at least six OTT packages to post-paid mobile customers, resulting in a situation which is increasingly viewed as lose/lose for both telco and OTT provider.

These players have offered subscribers many OTT services bundled with communications products, at no or negligible cost But this has not been without its drawbacks, said the analyst, and this loss in value has led to Indian SVOD services beginning to reduce their reliance on these partnerships. It added that while the exposure provided by bundles and operator relationships has been significant, it makes upgrading customers to full-price subscriptions far more challenging.

As a result, several of the OTT services are looking to extricate themselves from these relationships. For telcos, OTT access is now an expected part of the bundle, rather than a differentiator and OTT players’ services are getting lost in the proliferation of options for customers and the wholesale model has caused ARPUs to plunge.

“Some Indian SVOD services are experimenting with new subscription plans – such as regional packages and even weekly offers to cater for a smaller, targeted group of customers,” said Ampere Analysis analyst Orina Zhao. “However, they continue to use price as their main selling point, leading to the term ‘One buck (Rupee) TV’ being coined to describe the entire Indian SVOD market.”

With a plethora of services battling to gain an edge over other services, Ampere believes M&A is an inevitability in this marketplace. At present, it says, the players are opting for alliances to share and co-produce content, but this is a short-term strategy. Ultimately the analyst predicts price pressures and the inexorable increases in content spending resulting from the competitive market will force groups to seek backers with deep pockets, driving consolidation.

To relieve domestic pressure, Ampere observed that some OTT services have their sights set on international expansion in particular into China, Southeast Asia, and the Middle East where Bollywood content is popular. Eros Now has already adopted this strategy with success, and its international service is now generating a similar revenue to its domestic service. Disney+ Hotstar has a selection of Bollywood and Hindi content for Indonesia and Southeast Asia.

“With a diaspora of 18 million Indians living across the globe, providing content to this substantial market could be great opportunity for the Indian SVOD services to supplement the limited revenue opportunity caused by the impasse in their local market,” Zhao concluded.