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NEW DELHI : Video streaming platforms betting on ad-supported models are bumping up their content budgets, as they race to expand their regional language programming, platform executives and media industry analysts said.

Netflix Inc. had hinted at a possible advertising-based streaming option on 19 April. In May last year, Amazon Prime Video had launched miniTV, where Indian users can watch free videos within the Amazon app.

Siddhartha Roy, chief executive officer, Hungama Digital Media, is ready for ad-supported free content. The platform is committed to originals and the budget will rise 30% this year, he said. “Consuming content backed by advertising doesn’t mean audiences will accept sub-standard production quality. Even though we’re principally looking at telling stories structured for the mobile phone, we’re working with big, reputed production houses and top-tier talent," said Roy.

According to Neeraj Sharma, managing director, communications, media, and technology at Accenture India, advertising-based video on demand (AVoD) has the potential to dwarf subscription video on demand (SVoD) as advertising budgets keep moving towards digital. “In India, all major platforms have announced expansive content pipeline and investments in regional content are growing even faster. In the past five years, content investments have grown massively in India and they continue to rise because the market is still growing aggressively and all the big players have a need to hold on to and grow the consumer base. The dip in content investments at a global level seems to be a temporary phase," Sharma said.

On Monday, ZEE5 said the platform will stream 80-plus titles in 2022 in various Indian languages, working with established production houses like BBC Studios, Applause Entertainment, and The Viral Fever. Late last month, Amazon Prime Video announced 40 new titles for India including originals and acquired programming with popular film industry producers and actors.

Amazon, Disney+ Hotstar, ZEE5, and SonyLIV did not respond to Mint’s queries on content investments. However, Netflix pointed to the fact that in its latest earnings call, co-chief executive, chief content officer, and director, Ted Sarandos said the platform will continue to invest both in the quality and variety of content. “We will continue to grow the content spend relative to prior years... we’re very focused on making sure that the impact of the slate continues to grow," Sarandos had said.

Prasoon Garg, chief business officer, Applause Entertainment said the company sees a 20-30% increase in its budgets annually. “While we hope to curtail the rise in budgets at a certain point and optimize the same, the primary reasons for these hikes are line items that are currently in great demand, cost of quality talent and crew members that lead a project, hike in cost of locations, rise in fuel prices leading to an increase in the cost of travelling, and surge in boarding costs in turn hiking budgets of outdoor shoots," Garg said. 

However, production of big projects with popular names will continue in order to attract audiences. “These may not necessarily be the profit centres for platforms but shows that are produced with the intention of boosting a platform’s subscriber base and market the service. Besides, even high-quality productions that don’t require hefty budgets would be produced, primarily to help a platform engage their existing subscriber base and provide a continuous feed to the new incoming subscribers," Garg said.

Most platforms are comfortable to remain in acquisition mode for a few years, agreed Jehil Thakkar, partner and media and entertainment sector leader, Deloitte India, who feels content will be directed differently at paying and free users. 

Yet, production budgets and annual investments for all platforms are subject to the pressures of the macro economic and geo-political situation. Sunder Aaron, co-founder and principal, Locomotive Global Inc, a production house working on web originals, said, “The whole world is suffering the effects of inflation, the war in Europe and growing economic uncertainty that is made worse by the continuing impact of covid. AVoD models are being deployed or at least being seriously considered by platforms because they need to show continued growth along with the unfiltered potential to attract more subscriptions. There is a vast population of untapped subscribers in India, but consumer offerings must still remain relevant price and content-wise for all those people to make a positive purchase decision," Aaron said.

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