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With an increase in the number of Internet users and thereby an increase in the demand for variety in the online video consumption space, original content is likely to be the key growth driver for the Over-The-Top (OTT) industry in the coming years. A recent report by Deloitte states that close to Rs 3,300 crore has been set aside by top OTT players for creating original video content in the near future.

If you have been in Mumbai, Delhi or Bangalore in the last couple of weeks, chances are you would have come across one or many billboards announcing the launch of Sacred Games, Netflix’s first Indian original. Industry sources peg that Netflix has spent anywhere between Rs 5-6 crore promoting the series. It has also already announced its next original, Ghoul, a horror series featuring Radhika Apte. Even Amazon Prime Video has gone all out to promote its just-released, unscripted original stand-up special series, Comicstaan. That these platforms are spending big bucks on promoting their original shows is proof that there is merit in the findings of these reports.

PWC’s latest Global Entertainment & Media Outlook 2018-2022 states that the Indian OTT market is growing at a CAGR of 22.6%. It also states India will move into the top 10 largest global OTT video markets in 2022 with revenues to the tune of Rs 5,595 crore.

While producing original content, production houses must also ensure versatility and create larger universal appeal to connect with audiences beyond a certain geography. Citing the example of the widely popular show Narcos, Abhishek Rege, Chief Executive Officer, Endemol Shine India says, “A series like Narcos established that your content needs to be multi-territory and multi-season. Your product and story should be able to connect with a larger audience. It also has to lure the audience to binge-watch. Moreover, platforms can benefit if a series is multi-season. It is important to create series that are around 8-10 episodes long, and gripping enough across all episodes.”

Original content is also a great way for an OTT service to create a brand with the viewer and subscriber, adds Ridhima Lulla, Chief Content Officer, Eros Digital. “The premise is deep-rooted in the stories and the culture we are looking to create with the audience. On an industry level, the millennial audience in India is severely underserved with quality and relevant programming that they can associate with and hence we will help develop more loyal viewers for the brand.”

While growth in the OTT space will definitely come from original content, Katial further points out that all formats of content, be it original, catch-up or syndicated, work with different sets of audiences. “In addition to the strong original content we host, we also have a library of syndicated national and international content including movies, music, TV shows and such that are hugely popular among our viewers,” he adds.

Given that India is not a homogenous market but rather one that is made up of thousands of smaller, diverse markets, each OTT player is looking for that sweet space to capture unique audiences. Most players agree that the way to do that is by going local.

Devendra Deshpande, Head, Content+, Mindshare believes that the potential for regional original content is limitless because the success of regional content is not limited to Indian borders. Deshpande explains, “Indian vernacular content has a lot of potential in other markets as well. For example, our show No 1 Yaari with Rana for McDowell’s No. 1 saw 40 million views with an average watch time of 39 minutes in India alone, and that’s a huge number. However, this content has the potential to resonate well with the Telugu diaspora settled in Malaysia or Singapore. The same thing goes for a market like Bengal, Tamil Nadu or Karnataka. The scope is huge.”

In May 2018, Viu announced the launch of around 70 original titles and more than 900 episodes of locally produced content to be consumed globally. Around half of this will be Indian content, produced in multiple languages including Hindi and Telugu. Talking about their commitment to regional original content, Vishal Maheshwari, Country Head, Viu, India says, “We’ve launched about 11 shows in two languages in 2016-17 alone. This year, we’ve already launched nine originals and have plans to launch at least 20 more before the end of the year. We’re entering the Tamil market with six new originals produced locally with local production houses and talents by the end of this month. About 70% of our consumption comes from original content while the other 30% comes from the other content on our platform.” Viu currently has a total viewership of 9 million in India.

From an overall growth perspective, the OTT segment is extremely bullish as far as India is concerned. PwC’s projections are that India will be one of the top 10 OTT markets in the world in the next five years. This growth is going to span out along the expected lines - we originally had Hindi and English content, which were the drivers, but then to grow and get a greater market-share, we have to move to localized content, beyond Hindi into regional languages. So, that is going to be the game plan. Then there is the whole question about original versus repeat content, content which is exclusive or premium, and first offered on a particular OTT platform as against being offered elsewhere. Those are all going to be strategies in terms of how you get people to come on to a particular platform.

But despite the fact that India is going to be the 10th largest market for OTT globally in five years, even if you look at the numbers at that point of time, the overall market size of OTT is just going to be 120th the market size for television, both for subscription and advertising.

There is also a regulatory arbitrage that the OTT platforms currently enjoy. Their content is not subject to any programming guidelines or certification or censorship, which means that they can push through edgier content which otherwise is not possible on Television or in movie theatres. Edgier not only in terms of the type of content but also in terms of the experimentation that they can do and therefore bring new talent into this segment. Effectively, it is like the second coming of the studios in the country. Possibly, in future we might see all the players trying to do some kind of self-regulation, but until then, there is a window of opportunity from no regulation.

Is it so much to do with original content, or exclusivity of particular content on a particular platform, and possibly for a short period of time? If Hotstar has a right to Game of Thrones which Netflix and Amazon do not have for India, it is as good an original content as far as India is concerned. Say for example the content creators were to say that this content will be available only on this platform to begin with for the first three months. And after that it can be repeated and shown anywhere else, if they were to monetize it in that manner… Will that be a good strategy? It could be. How is original OTT content different from movies which also have a window for theatrical release and can go on to any other platform? Many of the classic OTT players like Hotstar or Amazon or Netflix started as content aggregators. They had repeat value. Increasingly they realize that given the concerns of linear players, somewhere they are going to be starved of the supply of content. And each one individually has started creating content. Some of them have budgets that exceed what the traditional studios spend on content creation. Now, step back and look at it from the consumer’s perspective. If you are going to have so much original content, exclusive to each platform, to how many platforms does the consumer subscribe? His spending capacity is going to be limited. And therefore which is the model that is going to evolve ultimately? To have a short window of release where content remains excusive to your platform and then you eventually share it with other mediums, and you then monetize the licensing part. Or, do you keep it exclusive on your platform forever?

Advertising potential on any medium ultimately has to play out. Let’s look at the example of HD channels. When they were originally introduced, one of the strategies was that there would be no ads on HD channels, and then subsequently you had advertising coming in. Digital platforms have the benefit that you can narrowcast any advertising. You can get the right advertising to the right consumer because you have significant analytics about that particular consumer. Agencies clearly believe that there are significant advantages in advertising on an OTT platform. The struggle today is - how good are the analytics? How do you measure the efficiency of advertising, as you do for TV, Print and OOH? Though consumption patterns are changing rapidly, advertising till date has not moved, not only in India but even globally at the same speed. The fact that it has to move is a no-brainer, it is going to happen. Is original content going to drive advertising? I am not too sure. Any good content will drive advertising. You really target advertising to a particular subscriber. Therefore whether the subscriber is watching The Heist or Sacred Games, or some Hollywood movie or Bollywood content on the platform, you don’t go seeking advertising for the type of content, you seek advertising for the subscriber. You have data on the subscriber, and no matter what content he is watching, you push the right ads to him. The subscriber is the driver for advertising independent of what content he is watching.

Even if you have to do a study, how do you do it? The pricing is common bundled pricing. Subscriber numbers are not freely available. Those are all at best estimates. Even if a Netflix or Amazon gives out the number of subscribers, how do you know how the subscribers are moving, in the absence of an equivalent of a TRP for content? The only way one would know is that over a period of time, if there is a correlation between number of subscribers and the new content that you add. And we have to be careful here as to what is meant by original content. Does it necessarily mean only new Indian content? Does it mean foreign content which is dubbed in Indian languages? Say, for example if Netflix is pushing into India a lot of Spanish content, because they have found that kind of content works in India, is it original content? One has to consider all this.

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