Streaming services reeling under high content costs and revenue leaks from password sharing are planning to improve their income by launching ad-supported models, restricting the use of multiple device log-ins and introducing cheaper plans to expand their subscriber base. Amazon Prime Video announced a cheaper ₹599-a-year mobile plan for India on Monday for Android users in the country. Netflix has already launched ad-supported models in the US, Australia, Britain and other markets and is likely to eventually bring it to India. Companies are also investing in the technology required to track if one account is being used by far too many users, a phenomenon very common in India.
“Our log-in is specific to a mobile number, and we allow only two devices to be linked to it at a time. However, we know India is a country where people play around with these things, and extreme restrictions can harm user engagement. We need to build our subscriber base at the moment,” Akshay Bardapurkar, founder of the OTT platform Planet Marathi said. Netflix’s recent move to allow users sharing accounts to transfer their viewing and browsing history to a new paid account is just another way to ensure the platform doesn’t lose premium customers in case some of them stop sharing accounts, Bardapukar said. “Throughout (these) life changes, your Netflix experience should stay the same. Today, we’re launching Profile Transfer, a feature that lets people using your account transfer a profile — keeping the personalized recommendations, viewing history, My List, saved games, and other settings — when they start their own membership,” Tim Kosztin, product manager at Netflix wrote in a blog last month. “No matter what’s going on, let your Netflix profile be a constant in a life full of changes so you can sit back, relax and continue watching right from where you left off,” he added. The company did not respond to Mint’s queries on how streaming service plans to improve revenue.
While all platforms will increasingly invest in technology to track how many users are accessing one account and how frequently, the initiative will be led by foreign OTT giants, said Karan Taurani, senior vice-president at Elara Capital Ltd. “Their worldwide penetration allows them to use and scale the same strategies globally. It may not make sense for some of the local players whose ARPUs are low,” Taurani added.
Password sharing has undoubtedly led to revenue loss for platforms, agreed Baskar Subramanian, chief executive officer and co-founder of Amagi, a media technology company. Often, members of a family or groups of friends share accounts and access it from different devices and geographies. This has limited platforms’ ability to increase subscription-based revenue.
“One way for platforms to minimize their loss is to offer tiered subscription packages to users. The packages can vary in terms of the number of devices that individuals can stream on or the number of shared users allowed. It could also be ad-based or ad-free subscription tiers. This gives users the autonomy to choose a subscription bundle that serves their needs best, while platforms continue to generate revenue,” Subramanian said.
On the launch of the company’s Rs. 599 annual mobile plan, Kelly Day, vice president, international, Prime Video had said in a statement that India is turning into an innovation hub for Prime Video. “An initiative like Prime Video Mobile Edition, that had its genesis in India, is now being rolled out across multiple countries in Latin America and South East Asia. We are confident that the new Prime Video Mobile Edition annual plan will further help accelerate the growth of our India business and give an even larger customer base access to the high-quality content on the service,” Day had said. Amazon did not respond to emailed queries.
Streaming services are also launching free ad-supported models where advertising revenue helps platforms maintain profitability, Subramanian said. Amazon Prime Video launched its free service miniTV last May within the Android app in India featuring a library of web series and comedy sketches. Voot is specifically launching free shows to reach audiences across metros and tier-one and tier-two cities.
Ad-supported models and presence on aggregator networks can help OTT players in improving profitability and growth, said Neeraj Sharma, managing director, communications, media and technology, Accenture India. Besides, they need to offer differentiated content and experiences. While they could make the services more affordable for the bottom tier, they could offer premium content at a premium price for the top tier customers, Sharma added.
Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.