Television was introduced in India way back in the 1960s. However, it was only in the 1990s that the introduction of Cable TV through progressive reforms and liberalization revolutionized the people in our country consumed by entertainment content. It was a way for families to bond after the daily grind and routine of everyday lives. Cable TV has since then reached a significant user base with the rapid onset of DTH services.
In the current scenario, as we move towards increased digitization, OTT players with on-demand services have reached a mass appeal, especially for millennials in urban areas. Youtube, as a streaming service, started to become popular around 2010 in India. A significant growth spurt for Youtube in India as a sports content streaming platform came about when it streamed the famous Indian Premier League. With increased internet penetration in India, global US streaming platforms like Netflix and Amazon Prime Video started offering India's services around 2015.
Seeing the rise of global US OTT platforms and India's success, major TV production houses moved to capture the market share through increased offerings and differentiation in their content. In light of this, Disney+Hotstar, Zee5, SonyLiv, have all started offering content in the on-demand OTT format apart from their regular DTH service offerings. Furthermore, devices like Google's Chromecast and Amazon's Fire Stick, along with smart TV integrations, have also become very popular.
The rise of the on-demand OTT platform is a welcome change for the working and millennial generations. It offers flexibility and convenience with complete control at the end-user level. Now, consumers have the comfort of binge-watching all the content at once or watching it according to their time preference while deciding the various options for paying for OTT content according to preferences of regional movies, sports, or American sitcoms.
According to a survey by MoMagic, in July-Aug of 2019, across 7500+ consumers pan India, 55% preferred OTT content to a 41% preference for DTH. This finding shows that DTH platforms have not become entirely irrelevant but are facing stiff competition from the on-demand OTT content providers.
Telecom players like JIO Communications have changed internet consumption in India in the last few years. With cheap internet and data services, an increasing number of consumers watch content online through smartphones instead of watching Television. However, the advent of these streaming services have expanded the scope and offerings to a typical user and has potentially expanded the overall content media and entertainment market.
Though internet services have penetrated to a significant extent, reliability, accessibility, and Internet connection speed is still a significant limiting factor, especially in the rural and semi-urban areas. The OTT platforms still have limitations to incorporate the diverse regional tastes of the Indian consumers with their favorite TV stars.
There is no questioning the fact that consumer preferences are changing. According to a survey by Mint, more than 80% of Gen-Z customers prefer streaming content online. This number stands at around 70% for younger millennials. Furthermore, the number of mobile internet users is estimated to reach 850 million by 2022. At the same time, India has seen a massive drop in internet data prices, which is expected to continue in the future. These numbers make it very clear what the current generation prefers. More importantly, it also makes clear where the entertainment industry's future lies.
These numbers don't bode well for traditional television production houses. Therefore, it is not a surprise that almost all major networks in India have launched their streaming platforms. In the last four years, nearly 30 video streaming platforms have been launched in India. Star India has Hotstar, Sony Entertainment Television has SonyLiv, Zee Entertainment Enterprises has Zee5, and the list goes on. Even Balaji Telefilms', a production house that historically did not have its own media platform, has seen this industry's future and launched ALTBalaji. These companies realize that with changing customer preferences, traditional media platforms' future is in danger, and they are adapting accordingly.
Customers certainly don't have a lack of options. The Indian services compete with foreign powerhouses like Netflix and Amazon Prime. Interestingly, India seems to have become a battleground for these foreign players. An exciting development in the industry occurred when Hotstar partnered with Disney+ to become Disney+ Hotstar. This event signaled a shift in strategy, with foreign players capitalizing on companies with an existing market share instead of spending money to acquire customers. The Indian services, in turn, gain competitive technological and strategic advantages with these partnerships. This type of arrangement could become a common occurrence in the future. Comcast, a major player in the American television industry, was recently in talks to acquire a stake in Zee to take advantage of Zee5. While the deal didn't go through, it reflected a global understanding of India's streaming potential.
So, is streaming butchering the television industry in India? Yes and no. If one talks about people moving away from cable networks to streaming platforms, yes, there is an apparent shift. However, are production houses and television networks bearing all the brunt? No. Traditional players realize what is happening and have prepared or are preparing for the change. The channels that can not start their platforms are either partnering with one of the streaming players (and making their content exclusive to them) or are making their content free to air on platforms like YouTube, earning first-hand and second-hand advertisement revenue in the process.
As in any business, it all boils down to one thing – the customer is king. Streaming platforms provide top-notch content and bring unparalleled customer flexibility, convenience, and quality. Production houses and entertainment networks realize this and are catering to this need. There is one certainty – the future is digital.
Contributed by
- Soham Nayak, Shlok Khemani, Anushka Hait, Hameer Nagda, Pushkar Khatod, Vijeta Kumari
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