• Aditya Gupta

OTT Services: A Glimpse of their Future

Updated: Apr 6

The entertainment industry went through a lot last year, with COVID-19 bringing offline entertainment to a practical standstill. The likes of AMC and Disney saw holes the size of billions of dollars in their balance sheets, with business virtually vanishing overnight. Though supposed to be the year of revival, this year saw a turn of events that were a painful reminder of the long-term scars of the pandemic on the sector. The merger of Discovery with AT&Ts WarnerMedia has shaken the planet, for it was a merger none saw coming. The two are companies working at different ends of the media industry, with one working on cheap-mass produced content and the other on premium high-end content. It is the wedding of the yin and the yangs of the world, and it has been a painstaking reminder of the problems and challenges that lie ahead for the industry. Though this is happening at the other end of the world, it has made me think of the future lying ahead, for our very own burgeoning domestic media sector.


The Indian OTT space is brimming with potential as we see a competitive mix of domestic and international players vying for the top spot in the sector. Yes, the competition is crazy but to be fair half the players aren’t even ready for the national much less the international stage. They are just small regional players aiming for a top spot in their chosen region. To their credit, they are responsible for introducing many lower and middle-class people to the OTT world by offering content directed at them in their regional tongue. This personalisation extends to the content too which being produced around topics centric to those regions is appealing to a vast number of locals. Bigger players like Netflix and SonyLIV have been vying for this grass-root personalization by offering international and domestic content in multiple major Indian languages. This effort, though, falls short in comparison to the personalization driven by these regional platforms which offer nothing but local content save for some other content too.


With competition this diverse and potent there is very little breathing room for existing players to grow organically at a steady rate. With good content rare to come by OTT players are finding it increasingly hard to retain customers with customers switching platforms every time they run out of content to stream. This cycle is especially prevalent in a price-conscious market like India where consumers pay as long as the product is serving them well after which they stop using it all together. This makes it even more difficult for these media outlets to operate in India as without an optimally distributed release cycle and cut-throat pricing they cannot retain a majority of their customers. For example, Netflix had on its debut projected a 100 million-plus consumer base in the next 2-3 years but today it stands at a measly 4 million approximately. This though hasn’t stopped the company from being the biggest revenue generator of the lot. Don’t you think there is an uncanny resemblance to Apple’s business model? Well, I do and that just tell us more about the industry. Netflix hasn’t achieved a massive consumer base due to their premium price point whilst its competitors like PrimeVideo and Disney+ Hotstar eyed more customers with lower price, this is highly reflective of the price-sensitive nature of the Indian markets. Which strategy is better is an argument for another day.


While there may be many platforms, the consumer base isn’t even a healthy 30% of the Indian population. Despite the weak OTT penetration, even after the pandemic, there is hope for the industry as it offers platforms a chance to grow financially, if not in terms of market share, with a larger potential clientele. This weakness may also be the breathing room that many have been looking for as it offers a chance for players to grow a larger presence than their competitors by being the first ones to gain those extra customers, the strategies for which we will discuss at a later date. As the economic outlook looks bright for the future, despite the second wave of Covid, with growth and innovation taking place in the economy. This growth will increase the purchasing power of consumers in the long term and will make the case stronger for premium content providers like Netflix. Who will eventually emerge victorious is to be seen but there couldn’t have been a more exciting time for the OTT space as with the growth of the economy the industry will grow too albeit with a few winners and many losers.


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