Developing the profile and performing strategic analysis of the different stakeholders involved in the Indian OTT video market

Abstract

It is an interesting period for the OTT video industry as competition intensifies from international as well as local players, while increased smartphone penetration and the impact of Jio has increased the total market size available. In India, bulk of the OTT video market share is held by a few big players – Netflix, Hotstar and Amazon Prime. As the market evolves, the Indian market may also get fragmented with regional players, before undergoing consolidation like Europe. We also see very few customers in India utilize Ultra HD or 4K displays and connections, so Netflix’s pricing model in the west for Ultra HD streaming may not be apt in India. In terms of regulation, online content does not fall under the purview of the CFBC. So the impact of regulation in India is less than that in China or Taiwan, where Netflix was banned. However, companies self-censor their content to avoid possible fallouts. We see that using data and analytics to the fullest extent possible to generate attractive shows is crucial to success. Netflix is the gold standard in this regard. Netflix uses users’ viewing history and ratings to decide on which content would be more successful, along with studying the behaviour of fans of various actors and directors. Alternatively, Amazon launches free pilot episodes and perform analytics on the response to those. From our primary survey, over 60% of respondents say that video streaming is the biggest source of mobile data usage. We also saw that over a third of the respondents watched streamed video for more than 10 hours a week, which indicated that the market for OTT video streaming was quite healthy in the country. We found that Hotstar is the most visited service, but Amazon Prime is the one which has the most paid subscriptions. Amazon’s model of bundling delivery privileges with video has been quite successful in India. Hotstar has been poor at converting its users into paid subscribers – only 37% of Hotstar users have a paid subscription. A logistic regression performed using R software indicated that males were considerably more likely than females to have used Netflix in the past year. While this could be due to less disposable income in the hands of females, we think streaming services should also consider having more diverse and women-friendly content. According to oursurvey, price and quality of content are the most important factors for an OTT streaming service. The importance given to regional and Indian content was far less. We had looked at only responses of people above age 28 to check if they valued regional content more, but according to our results they did not. This might be due to the fact that the sample size for over 28 age group in our sample was too less. In order to achieve success in the Indian market, unique business models and revenue schemes should be tried. Hotstar’s freemium model, where it offers common shows and 5 minute delayed streams of cricket matches for free but charges a subscription fee for internationally popular shows and live cricket matches. We are likely to see similar models become more popular in India as more streaming players try to emulate Hotstar’s succesful model.