Recently, the online release of malayalam movie Sufiyum Sujatayum produced by the actor, Vijay Babu invited attention of the public owing to an outcry from the different stakeholders in the movie industry which include producers, exhibitors as well. This was the first successful attempt by the representatives of the mainstream Molliwood film industry. Indeed, this online premier through Amazon prime platform was after the much celebrated release of Amitabh Bachan’s Bollywood comedy Gulabo Sitabo and Jyothika’s Kollywood drama Ponmagal Vandhal within the last thirty days. Nevertheless, the advent of Covid-19 pandemic forced the tinsel world to opt for a technology driven alternative devoid of the conventional trust worthy theatrical release. Here, the facts, technology and challenges behind this futuristic digital business endeavour is revisited.
Over-the-top (OTT) services, a technology assisted video streaming media employs the internet facility to present movies to viewers bypassing the traditional distribution channels in general and theatres in particular. The urge to consume content on-the-go has undergone a radical change at an astounding pace changing the dynamics of the video streaming industry. Access to movies anywhere anytime using an electronic gadget with a medium internet bandwidth has drastically changed the outlook of the world towards visual media. Notably, OTT platforms are considered as a steadily growing segment of the entertainment industry doing well especially in this current pandemic situation as a blessing in disguise when multiplexes and cinema halls remain closed leaving the people with limited entertainment options. This makes it clear that the waves have shifted in support of a digital world, enabling digital content over-the-top of conventional cables and set-top boxes, and so the name. In India, among the 40 plus OTT platforms currently exist, Hotstar is the most popular which streams online, IPL and other cricket matches apart from movies and documentaries. Similarly, well-liked worldwide giants such as Netflix and Amazon Prime Video too stayed their foot on India owing to their rich regional content in addition to their vast Hollywood movie treasure. Moreover, they have their own apps and website pages that enable logging to and activate subscription to access the visual content. Other few popular OTT Platforms in India are Yoot, BigFlix, Sun NXT, Hoichoi, Sony LIV, Viu, Eros Now, YouTube and ZEE5. The sector has also developed huge potential for regional OTT market with popular established networks. Along with movies as the main foucs for OTT platforms, there are serials, comedy clips, music videos, live events, talk shows, dubbed content in regional languages as well as dubbed kids’ programmes.
According to a recent study carried out by FICCI- KPMG, there are about 9600 screens all over India including 3000 multiplexes accounting for 50-55% of a film's overall revenue. The pursuing Covid-19 pandemic has put on a sudden break for the launch of film releases in big screens which witnessed a natural transition towards OTT digital platform with 30% increase in films digital revenue when compared to theatricals(less than 15%) in 2019. For instance, Netflix reported an addition of 15.8 million paid subscribers to their platform in the first quarter of 2020 owing to a surge in audience due to national lock-down. Plenteous reports indicate a sudden rise in pattern of user content consumption in OTT viewership during COVID era and this behavioural change will continue and prevail forward as it is already predicted that the consumer video on demand will increase to a double by 2021. The OTT platforms have made video content more accessible to customers as well as to business powering the third era of television.
Note that, OTT services offer a plethora of benefits with access to a huge video library of movies including premiered movies with global audience. The subscription costs of OTT platforms are affordable and viewers will be able to subscribe multiple providers adding up to the monthly cable plans. The major highlight of OTT platform is that majority of them provides video contents without any commercials saving time of movie watch. These, online streaming services are affordable and can be accessed by all households by many means such as Smart TV or mobile with pre-installed video apps, a TV with chromecast stick or a computer with web-browser. The film space is rejuvenated by dubbing world language movies which is not offered typically for theatrical release for reaching a larger audience and to attain a depth in regional library. Based on KPMG report, Netflix and Amazon Prime have hired writers to append contextual essence to dialogues in English in addition to launching regional web series
When technology becomes pervasive, it demands organizations to have a transition from the traditional business models to ensure customer stickiness to emerge as winners. Considering the current shift in user behaviour patterns, a predominantly used B2B business model needs to be transformed to a B2C model to retain in the media ecosystem. OTT platforms are successful to reach the customers directly. More digital video releases in OTT platforms will stimulate more streaming app downloads, adding on more subscribers/new users along with converting subscribers to premium memberships. It is a win- win situation to the seller and buyer of the entertainment industry opening up new possibilities for monetisation of films. The OTT platform providers/buyer considers movies as an exhilarating source of new customer acquisition and retaining the existing customers for reinforcing revenue models in future. Innovations in digital platforms are in the pipeline and major industry giants like Apple and Google have largely invested to develop advanced video processing technologies.
The conventional mode of selling advertisements to Television has significantly warped, reason being the change in viewing habit/patterns of people. Advertising through OTT is growing exponentially too. Today in India, several OTT platforms performing well with revenue models based on subscriptions as well as with advertisements. The advantage of promoting advertisements through OTT platforms is that they have the technology to place ads to the right audience and by applying proper Artificial Intelligence techniques personalized adds also may be placed.
Apart from the content and marketing, technology plays a key role in integrating the components like subscription management, content management, usage analytics in terms of user consumption and interacting with the content to offer personalized customer experience. Almost all OTT service providers are investing about one- fourth of their overall expenditure in technology, the backend part of OTT to improve the binge watching user experience. The subscriber engagement and subsequent retention of viewers is strengthened through segmentation of users through Artificial Intelligence and Machine Learning to target personalized content- recommendations and notifications to the users based on their device, bandwidth and content preferences. The recommendation engine uses Machine Learning technique to display items the user prefers to watch based on user profile and consumption pattern. OTT service providers have a huge expanding library of contents stored in the cloud and require technology expertise. The service providers outsource functions starting from encoding-compressing the files to a streaming friendly low sized file followed by encryption adding security codes to fight against piracy and metadata formation by adding tags for search optimization to various specialized technology players to upload in the cloud. This process happens at the back-end of OTT platforms. In the front end, the AI/ML powered customized recommendation window with an auto preview in the homepage. When the user decides on his watch-list, the video/movie selected to play will be delivered from the cloud to the user location through the nearest server with the assistance of content delivery networks. The video quality will be adjusted based on users internet connection bandwidth.
The outbreak of coronavirus worldwide has made life to a standstill advising people to remain indoors which resulted in delayed production, shoots and release of movies. Presently, theatres across the country remain closed for an indefinite period of time. There stands confusion in the minds of production houses whether to release the movie in theatres or in OTT platforms. The biggest film industry Bollywood is opting OTT releases long before the lockdown of malls and theatre houses. For big budget films, audience may prefer to watch at movie halls for the theatrical experience even it is released on OTT platforms. Lack of theatrical experience, accumulation of money to limited corporate players, destruction of existing physical infrastructure and job opportunities to common man are the major concerns due to the proliferation of OTT platforms. Too much dependence on the high quality internet backbone may also pose a bane for the digital platforms in the long run.
However, a major challenge with OTT platforms is the difficulty in providing personalized communication/recommendation when targeting users over 200 millions watching content in more than 12 different languages. Customer acquisition and retention is a big challenge for OTT players because of the interest in several players to offer content free of cost. In future, digital platforms may rely on top notch casted films to attract, engage and retain customers. Data analytics prediction packages and prescriptive analytics packages are still working to revolutionize media supply value chain to overcome the challenges for Indian OTTs. Pircacy is also a complex problem which will impact the revenue generation capacity from OTT platforms. When anytime anywhere digital experience provides value which justifies the price will nullify the scale of the problem, moreover with forensic watermarking to IP blocking may disrupt sharing content illegally.
Online streaming platforms demarcate a new path of video/film content consumption through audience targeting technology in effect breaking the theatrical monopoly. They enable users to watch their preferred shows/movies at their own expediency. According to the recent report by the Boston Consulting Group, it is predicted that by 2023, the Indian OTT market will attain $5 billion in size. With Covid 19 lockdown the OTT platforms have drastically witnessed the increase in the number of subscriptions over 80%, app download increased to 33% and daily active users increased to 41% as reported by Forbes. The digital platform has also penetrated to rural markets with demographics of women and older generations spending equal or more time watching videos online. The paradigm shift towards OTT platforms opens up unlimited opportunities to create and sell contents without negotiating distribution agreements to reach more customers. There is no doubt that the future of video and TV will be on online devices when there are more than 3 million smartphone users and OTT industry will reach its maximum potential surpassing the cable/satellite market. OTT is definitely the future.
