Over-the-top streaming firms make inroads
The OTT sector has clearly become a space to watch out for as the infrastructure continues to improve, devices get smarter and data prices fall
With Emerald Media announcing the acquisition of a significant minority stake in YuppTV for $50 million last month, the spotlight is back on the over-the-top (OTT) video-streaming sector in India. Emerald Media is a pan-Asian platform established by global investment firm KKR & Co. for investing in the media and entertainment sector, while YuppTV is an Internet pay TV platform or OTT video-streaming service for South Asian content, offering live TV, catch-up TV and movies on demand in 14 languages across the world.
“Globally, video consumption is moving towards OTT platforms, leading to rapid growth in viewership and revenues. Besides, time spent on digital has started exceeding time spent on television globally,” says Rajesh Kamat, managing director of Emerald Media, explaining why his firm invested in YuppTV.
Besides, the OTT firm boasts a unique combination of scalable revenues, proprietary technology and a strong subscriber base with content relationships across verticals, says Kamat, adding “Through this investment, Emerald would like YuppTV to be the anchor to its vision of building a new-age media company in the OTT space.”
Yupp TV’s founder and chief executive Uday Reddy, meanwhile, says that the funds will be used to expand the business into Malaysia and West Asia, besides generating both original and licensed content.
This column had earlier said that OTT services would explode in India in 2016 and that the business would be advertising-led in the short term. Although OTT brands such as VOOT and Arre are advertising-led, YuppTV follows a freemium model that includes both subscription and advertising revenue.
Since its launch six months ago, VOOT from Viacom18 Digital Ventures has ramped up its base to 14 million users monthly. It has already had more than 12 million app downloads and its daily user base is 1.3 to 1.5 million. The daily watch time for VOOT stands at 40 minutes per viewer. “So, we are talking of a watch time of around 50 million minutes a day,” says Gaurav Gandhi, chief operating officer at VOOT.
Abhishek Joshi, vice-president and head of marketing and analytics (digital business) at Sony Pictures Networks India that runs Sony LIV, says that Sony LIV has seen 55% growth in traffic, 80% growth in downloads and 70% growth in revenue this year. Currently, its content includes TV shows, live sports, films, originals, music and short films. In the past six months, it has forged strategic associations with Mukta Arts for short films and Arre for original entertainment content. It has also partnered with director Vikram Bhatt for a 104-part web series. Currently, its maximum audience comes from the top eight metros, says Joshi.
More recently, Spuul, the streaming service for films online, added Punjabi content to its range. The service has 18 million viewers in India, Pakistan, Canada, Australia, New Zealand, US, UK and West Asia. It offers a premium subscription that includes a pay-per-view option.
Executives working for OTT firms say that after the YuppTV deal, the sector is likely to attract more investments. Spuul CEO Rajiv Vaidya claims that several people have shown interest in its online streaming service, adding that like YuppTV, Spuul is also a pure-play OTT. “Emerald Media investment is a great indicator as to what is attractive to an investor and we believe it heralds a bright future for companies like us,” says Vaidya.
To be sure, investor interest will be driven by the changes that the sector is undergoing, although there still aren’t too many services that can claim to have built scale.
The OTT sector has clearly become a space to watch out for as the infrastructure continues to improve, devices get smarter and data prices fall. Globally, these are contributing factors to the acceleration of cord cutting, forcing massive switch from conventional video to OTT and India is likely to follow suit, says Vaidya. That said, content and distribution will be two key drivers to widen the acceptability of OTT, he adds.
More consumers will take to OTT in India as data prices get rationalized, payment gateways improve and people get over the psychological barrier of paying for content, which is currently a major impediment.
VOOT’s Gandhi says that the sector is seeing a lot of activity and a whole lot of innovation. So, everyone’s eyes are on it.
“In the next three years, there will be more homes with a streaming device than with TV sets. We are all at the early stages of the big digital journey where in the foreseeable future (five-seven years), every screen will be connected,” he says.
Emphasizing content portability, YuppTV’s Reddy adds: “Once India has unlimited data plans and everywhere TV—that is, it has connected devices which allow one to enjoy TV anywhere and anytime—consumers will start paying.”
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.