This presentation includes an in-depth study of an OTT service in the Indian market. The study further explains how demand surged in the country and how key player is bullish to deliver its content and service to the consumer.
2. WHAT IS OTT
SERVICE?
OTT is basically the tech version of OTC (over-the-counter)
medication.
It’s stand for “Over the top”, this term
is used for delivery of video, songs
and any TV related content through
internet and bypass traditional
distribution models. You can think
about OTT application as anything
that disrupts traditional tradition
billing model of cable/satellite
companies. Since, the OTT players do
not require any business or
technology affiliations with network
operators for providing such
services they are often known by the
term "Over-The-Top"
(OTT) applications.
3. OTT CONCEPT
INTERNET COMPANY
OTT
PLAYERS
OTT are identical with video-based services. Actually more than
that .
Service delivery of media content such as audio, video and text
over the Internet to customers using a broadband connection
regardless of the involvement of the operator or ISP
.
OTT service basically focuses on satisfying user experience
with a combination of a variety of service-centric devices is
not always done telecommunication.
5. WHY OTT SERVICE?
Cost Content Availability Convenience
Features User Experience Social Propensity
Net Neutral
Smartphone &
Mobile Internet
penetration.
6. PLAYERS OF OTT
MARKET IN INDIA
There are currently about 40 providers of over the top
media service (OTT) in India which distribute streaming
media over the Internet. In fiscal year 2018, the OTT
market in India was worth ₹2,150 crore (₹21.5 billion,
US$303 million as of 2018), and its value grew to
₹35 billion in 2019.
OTT subscribers in India 2020 According to a report by
Ernst & Young, the number of OTT users in the country
will reach 500 million by 2020, making India the
second–biggest market after the US.
The Government of India in 2021 released a new set of
rules that would bring OTT content in India under the
standards of censorship that is applicable to other
entertainment content platforms in India. This created a
stir among the OTT content providers who were upset
about not being consulted before the move was
announced.
9. RISE OF OTT SERVICE IN INDIA
The first dependent Indian OTT platform was BIGFlix, launched by Reliance Entertainment in 2008.
OTT gained significant momentum in India when both Ditto TV (Zee) and Sony Liv were launched in the Indian market around 2013.
Outbreak of COVID-19 and consequent national lockdown, the OTT sector in India witnessed a 30% rise in the number of paid subscribers, from
22.2 million to 29.0 million between March and July 2020.
Due to the national lockdown, people were restricted to their homes and didn't have much options for entertainment. Film theatres were closed.
The major reasons for the huge success or boom in the popularity of OTT were the availability of low-cost mobile data and affordable
smartphones.
So, they began to watch foreign TV programs on OTT platforms like Netflix and Amazon Prime. Shows like Scam 1992 (SonyLIV), Paatal Lok
(Amazon Prime Video), Special Ops (Disney+ Hotstar), Flesh (Eros Now), and Asur (Voot) kept the audiences hooked on to the OTT platforms.
10. WHAT EFFECT DID LOCKDOWN HAVE ON OTT PLATFORMS,
ESPECIALLY VIDEO-ON-DEMAND SERVICES?
Lockdown is an emergency protocol that prohibits people from
leaving a specified area. The Covid-19 pandemic has gripped the
world since 2020. So to stop the human-to-human spread, many
countries went into lockdown. India also asked its citizen to stay at
home.
With nothing much to do at home, the usage of OTT started
Especially in metro cities, where the internet infrastructure was already
in place. The speed and cost of internet plans gave a significant boost
to usage. Airtel, Reliance Jio, BSNL, Vodafone, etc., made the internet
and made the OTT platforms more accessible to the general public.
Usage statistics for 2020:
– The five metro cities account for 60% of OTT usage.
– Indians under the age of 35 years account for 90% of usage.
– Males account for 80% of usage.
Due to lockdown, the movie theatres were also closed. Filming of
movies and TV series had also stopped. All this made OTT platforms
the only option available for watching the content of our choice. Also,
the vast collection of movies and tv/web series makes it an irresistible
opportunity.
11. Research and consulting firm,
Redsheer Consulting, has
revealed the Monthly Active User
numbers for 15 content players in
Indian industry. It includes news
aggregators and shortform
content, OTT video and music
streaming players.
Based on the findings, Hotstar has
the largest MAU (300 million)
followed by Daily hunt (190
million) and MX Player (176
million).
12. 1. Traffic by Geography, OTT Video Sector
2. No. of Subscriptions, OTT Video Sector (In million)
13. A performance review by Just
Watch in the first quarter of
2021 states that Netflix, prime
video and Disney + Hotstar have
made up for 58% of the market.
These three platforms are
fiercely competing for the top
position as well.
However, Disney + Hotstar is the
market leader, leaving Prime
Video and Netflix behind by a
2% and 1% margin,
Zee5 has attracted 9% of the
market and ranked in the fourth
position.
Disney + Hot
star Beats Netflix
And Prime To
Become Market
Leader
14. A Boston Consulting Group
report predicts that the OTT
content market is at an
inflection point in India and
is like to reach $ 5 bn in size
by 2023. An increase in
disposable income, internet
penetration to rural markets,
and OTT video adoption
across demographic
segments have been the key
drivers of OTT market growth
in India.
BOSTON
CONSULTING
GROUP
15. BUSINESS MODEL AND STRATEGIES
The OTT market is segmented into advertising video on demand (AVOD), subscription video on demand (SVOD) and freemium &
transactional video on demand (TVOD).
The market remains highly focused on ad-based model (AVOD), where advertisements drive revenues; however, subscription-
based market (SVOD) continues to grow significantly
In 2019, Netflix announced a mobile and tablet-only plan for just INR199 per month to capture new subscribers; however,
despite this new plan, Netflix is quite expensive for the price-sensitive users.
In May 2020, Amazon Prime Video announced the direct-to-digital release of a few Indian movies and ZEE5 also announced that
it has lined up 15 direct-to-digital releases for FY21.
These pricing and direct-to-digital releases strategies will help the OTT platforms to increase their customer base. Also, to get
more paid subscribers, OTT players need to offer affordable plans, customized language packs, along with mainstream plans.
Though streaming English content has been limited to popular international TV series and movies, most platforms are focusing
on sharing original content in local/native languages.
16. OTT platforms such as Disney and AT&T are focusing on OTT content delivery to provide customers with exclusive services,
while key national players such as Zee, ALT Balaji and Reliance Bigflix are taking efforts to move from conventional media to
OTT-based services.
This has facilitated cut-throat competition among OTT providers, who are offering subscription fees at all-time low costs and
striving to provide more, high-quality content to increase their share in the market.
Key SVOD players are introducing pack durations and sachet pricing as part of their strategic initiatives to boost subscription
rates and ensure that consumers can access the preference shows at a reasonable cost. This move can help OTT platforms gain
acceptance among the price-sensitive Indian consumers.
Also, these SVOD platforms are emphasizing on creating a repository of regional content, including movies and web series, as a
strategic move to target niche regional audience across the country.
Traditional broadcasters, such as ZEE5, Voot and Disney+ Hotstar, and other independent streaming platforms, such as ALTBalaji
and Eros Now, are heavily investing in creating original regional content to engage their subscribers.
In order to create engaging experiences for viewers, OTT players are experimenting with various forms of in-app interactive
activities such as contests or games that can be parallelly played while watching live video content. For example, Disney+
Hotstar introduced the ‘Watch N Play’ social feed during the 2019 IPL season, wherein a viewer could predict scores and win
prizes during a live match.
17. SERVICE MARKETING
MIX
Place ; Apps and Portals
Product; Movies, Music &
Documentary.
Price; Low Subscriptions price
Monthly/Annually.
Promotion; print & digital media,
celebrity endorsement.
Physical design; page design
People; viewers
Process: design, standardization
18. PRODUCTS
Netflix offers its customers an extensive list of programmes
e.g. features films, TV shows, documentaries, Netflix originals
and many more.
It has three major categories of contents i.e. licensed non-
first-window content, licensed original first-window content,
and owned original first-window content.
There are four plans available for anyone wishing to take
Netflix membership i.e. mobile, basic plan, standard plan, and
premium plan.
Netflix adds new TV programmes and movies every week to
meet the growing demands of the subscribers.
19. PRICE
Netflix subscribers can watch TV shows, movies, and other
services without having to download them as long as they have an
Internet connection.
Customers pay a monthly subscription and plans range from ₹199
to ₹799 a month in India with no extra costs or contracts.
Some analysts argue that Netflix has a value-based pricing
strategy. Others argue that it pursues a competitor pricing
strategy.
However, it is worth mentioning that Netflix is not the cheapest
one out there but can be stated as pocket friendly.
20. PLACE
Netflix is available virtually anywhere
and anytime as it is an online
streaming business. It is available in
over 190 countries and only a few
countries and territories such as
Crimea, North Korea, and Syria where
the service is not available due to U.S.
government restrictions on American
companies
People can watch it on their
smartphones, laptops, tablets, smart
TVs, streaming devices, and game
consoles.
21. PROMOTION
Netflix has adopted a number of promotional strategies to
attract and retain its subscribers. For instance, it marketing
spending amounted to $2.65 billion in 2019 (Stoll, 2021).
Netflix one of the biggest advertising buyers in
the entertainment industry in the world.
It is not surprising that Netflix uses almost all media channels
to take its message to its target audience.
Celebrity endorsement, advertising on billboards and print
media, word of mouth, and extensive use of social networking
sites are some of the ways Netflix promotes itself.
Netflix’s first month free trial policy is also a promotional
activity to persuade potential customers to subscribe and
use its services.
Digital Marketing Model of Netflix: Personalised Content
Marketing, Website Development, Email Marketing, Search
Engine Optimization, Social Media Optimization.
22. PROCESS
The ease with which consumer can access the website is
pretty high. The titles are sorted on the basis of title of the
movie or TV show you wish to see or by genre or favorite
actors and actresses.
Intuitive UI and simplified viewing experience.
The users can always contact customer call centres for any
further assistance.
Payment of subscription can be done through debit or credit
cards or alternatively via PayPal or iTunes.
Signing up with Netflix is a straight forward process. Netflix is
free for 30 days for new members. If new members enjoy the
service and would like to continue, they need to do nothing
as their membership will automatically continue. However,
membership can be cancelled online anytime.
23. PEOPLE
Netflix has grown in both size and scope over the years to
become the major player in the entertainment industry in the
world. It employs approximately 8,600 full-time workers. It
focuses on hiring talented people with diverse backgrounds,
cultures, and perspectives. In 2020, it became the
top company in the world where people wanted to work
according to the tech jobs marketplace Hired (Liu,
2020). As long as the membership is concerned,
Netflix has around 200 million subscribers globally. A huge
number of its subscribers are from the United States.
24. PHYSICAL EVIDENCE
As Netflix is a streaming service, its website and app are its primary
physical evidence. It serves members in over 190 countries.
Its offices and data centers' are also part of the physical evidence. No
doubt that Netflix has a very user friendly website and a mobile app.
It also has offices and data centres in many countries e.g. the USA,
the Netherlands, Brazil, India, Japan, and South Korea.
Social Media presence. Twitter, Facebook, Instagram.
25. SEGMENTATION TARGET &
POSITIONING
Netflix Segmentation
People looking for digital entertainment
Netflix Target Market
18-40; Upper Middle Class
Netflix Positioning
Digital Streaming which can be accessed anywhere and
anytime
26. Strengths of Netflix
The Netflix subscribers can watch TV shows and movies instantly with a
streaming-only plan. It serves members in over 190 countries. It has over
195 million paid memberships worldwide (Netflix, 2021). This strength offers
it a competitive advantage over its competitors.
There are three major categories of contents provided by Netflix i.e.
licensed non-first-window content, licensed original first-window content,
and owned original first-window content. Netflix has recently focused heavily
on original contents as it has now its own TV and film studios. This focus
helps the company reduce over reliance on outside studios and take control
over its original contents.
The global focus is also an area of strength. Netflix offers original contents
in some of the major countries in the world. For instance, Sacred Games in
India and La Casa de las Flores in Mexico are original contents and have
become big hits.
Netflix has won a number of prestigious nominations and awards over the
years. For instance, it received 31 Emmy nominations in 2014. Likewise, it
received 112 nominations overall in original programming in 2018 alone. It
also managed to secure its first ever Academy Award with a Best
Documentary win for Icarus in 2018 (Mccreesh, 2018).
Netflix’s movies won two Oscars in 2020, though 24 nominations were
received. Likewise, its original programmes received 160 different
nominations in 2020, however; won 21 awards. It won 23 awards in 2018,
including the best drama series award for ‘Game of Thrones” (Stoll, 2021).
Weaknesses of Netflix
Though Netflix offers its original contents, it is
still heavily dependent on partners. According to
the Chief of Netflix Content, the licensed
contents consumed the vast majority of the
budget ($8 billion) of 2018. Similarly, producing
original contents is also extremely expensive.
The subscribers need to have high speed Internet
connection to watch Netflix services. Netflix’s
minimum recommended broadband connection
speed is 1.5 Megabits per second, while 25
Megabits per second for Ultra HD quality. It is
worth noting that high speed Internet is not
available to everyone and across all countries
and regions.
27. Opportunities for Netflix
Increasing the number of subscribers is a big
opportunity. Likewise, increasing monthly
subscription fees is an opportunity as well.
However, Netflix must exercise extra caution
before increasing the monthly subscription fees
as it may make some subscribers unhappy.
Expansion into mainland China is also a great
opportunity. Likewise, producing hit shows like
House of Cards and Stranger Things will
certainly boost the company’s image and market
position. Diversification into other markets is also
worth exploring.
Threats to Netflix
Threat is the last element to address in the SWOT analysis
of Netflix. No doubt that an increasing number of
competitors are challenging Netflix on a great scale.
Traditional networks like CBS and Disney have launched or
announced plans for their own streaming services.
The challenge from Hulu (a joint venture between several of
the major broadcast networks) is also very substantial.
Other major competitors of Netflix are Amazon, YouTube,
and HBO. Numerous television Channels around the world
are also considered indirect competitors of Netflix.
Netflix has been sued a number of times over the years. For
example, it was caught up in a copyright lawsuit in 2015
involving the 1948 Italian film Bicycle Thief (Gardner, 2015).
In October 2020, it was indicted in Texas, the USA over a
‘lewd’ depiction of children in the film Cuties. In addition to
lawsuits, Netflix also faces big threats from digital piracy
28. NETFLIX’S
CUSTOMER
RELATIONSHIPS
Self-Setup: Netflix platform was originally designed to ensure that it is simple and
easy to use. Developers of the website ensured to associate elements and themes
that serve, promotes friendliness and provides self-setup.
Unbelievable Customer Experience: Customers can solve their queries by reaching
the Netflix team through website portal, emailing enquiries and directly reaching
representative on call or live chat.
Social Media Channels: Netflix also engages its audience through social media
platforms such as Facebook, Instagram, LinkedIn. It advertises, offers deals to gain
the high attraction customers and enhance customer base.
Netflix Gift Cards: Netflix offers its customers special promotional discounts and
other gift cards as a part of their subscription plan.
29. NETFLIX’S
VALUE
PROPOSITIO
N
Netflix aims to provide the best customer experience by deploying valuable
propositions. Here is how the online streaming brand strives to do so:
With 24*7 streaming service, users can enjoy shows and movies in high-
definition quality from anywhere whether they are at home or are traveling.
Users get access to thousands of movies and tv shows and Netflix Original
movies or shows.
New signups can avail a 30-day free trial and have the option of cancelling
your subscriptions anytime.
Receive algorithmic recommendation for new items to watch.
At Netflix, users have the flexibility to either turn on notifications and
suggestions or keep them switched off.
Netflix “user profiles” gives leverage for users to personalize their user
account and preferences. The User profiles allow the “admin-user” to modify,
allow or ever restrict certain users.
Sharing accounts options is one of the rarest features a movie platform can
provide. Sharing accounts feature on Netflix allows spouses, friends or even
groups to share an account with specific filters and preferences already set.
30. GROWTH AND FACTS:
In the coming years, as the internet penetration and digital maturity
will rise, a major proportion of the OTT subscribers will be from Tier II+
cities.
The OTT landscape is expected to get hyper competitive in next 4–5
years and the OTT service providers will strive to emerge as the
preferred platform among consumers.
It will be interesting to observe the different business strategies that
will be adopted by the OTT service providers to attract more
customers.
These platforms will also need to ensure diversity in the content as
consumers in Tier II+ markets prefer TV soaps, reality shows, local
language movies and mainstream Bollywood movies
31. CONTENT TRENDS & HEADLINES
Pantvaidya said that 2020 saw the launch of some great web shows and platforms experimenting with new genres. He further stated that the audience mindset has
drastically changed, with the desire to pay for quality content, as they invest their time in that content. “This change is bound to create large audience pools whether
originals, movies, music, news, games, or sports across the entertainment industry,” he averred.
For ALTBalaji, the best performing genres are crime and thrillers, young romance, and urban drama. On ZEE5, crime & thriller shows proved to be the most-watched
content. Further, the viewership of Hindi and vernacular content increased even more.
Comedy was a runaway success for Amazon Prime Video. The platform expanded its comedy offerings with Comicstaan S2, Jestination Unknown, One Mic Stand,
and the recently launched Comicstaan Semma Comedy Pa - the first Tamil Amazon Original Series offering.
The platform forayed into the sports docu-series genre with the launch of ‘Sons of the Soil: Jaipur Pink Panthers’ and into live-sports with the acquisition of the rights
for all New Zealand cricket for six seasons till 2025-2026.
However, the most disruptive move of 2020 on OTT was the direct digital premiere of movies. With this single move, the OTT platforms threatened to upend the
business model of cinema exhibitors.
“We acquired 19 films across 5 languages to release directly on Amazon Prime Video as Direct to Streaming films,” the Prime Video spokesperson noted.
Streaming giant Netflix stated that India has the highest viewing of films on the platform globally and over the last year, 80% of its members in India chose to watch a
film every week. In 2020, Netflix also explored with non-fiction series and documentaries. Further, the viewing of kids’ titles increased more than 100% in India in
2020 over 2019.
“As we bring in the new year, we want to continue to cater to our audience by building a robust slate of differentiated stories that are suited to the different moods of
our members. At Netflix, we love to invest in original and licensed content, across genres and formats and have a very exciting line-up coming up in 2021,” a Netflix
spokesperson said.
“From our upcoming kids special, Mighty Little Bheem: Kite Festival that will take kids on an adventure to the film, Tribhanga: Tedhi Medhi Crazy, which will engage
audiences in a multigenerational story of three incredible women. We are continuously working to create content that reflects more lives from all corners of our
country, and develop a talent pipeline to give new voices a chance to be heard on screen.”
Aha CEO Ajit Thakur said that thrillers and comedy continue to dominate the large share of the content offering. “Another trend that emerged in 2020 is that big star
films came on to OTT Platforms across languages. Add to that, many theatrical films made their way to OTT.”
32. FUTURE OF OTT IN
INDIA
As cinema halls take a back seat,
there is an unprecedented boom
in the OTT Market across the
globe due to the pandemic
situation. Just like it is with the
rest of the world, OTT viewership
in India is at an all-time high
now. While OTT platforms were
making a mark for themselves in
the Indian market, the COVID
crisis accelerated the process.
From just two OTT platform
provider in 2012 to about 40
players now, the OTT revolution
has come a long way in India.
