Mumbai: The OTT streaming business is not for the fainthearted and players with light wallets, said Applause Entertainment founder and chief executive officer Sameer Nair as he talks about the evolving streaming business at the CII Big Picture Summit.
While there is an opportunity to make it big in the business, it’s important to ensure that it reaches a critical mass of subscribers. “And to do that you need to make investments,” said Nair, discussing how several OTT platforms turned out to be making losses.
Elaborating on why he decided to enter the IP creation business, he said, “We are trying to work with a movie studio model. Attract a certain risk capital and produce some content. TV was funding IP creation and so the upside was being reaped by TV broadcasters. Producers did not get the upside of owning the IP. Today, there is an opportunity for content companies who take a degree of risk in content creation and license it to platforms.”
Until now, TV was driving investments into original programming in India as it was catering to a mass audience. It was dominated by celebrity-led reality shows and daily soaps and that’s what consumers were watching for decades. But OTT has unlocked a new audience as it caters to a mass of niches. “For example, let’s say 10 per cent of the country likes the crime genre, that’s the size of a small European nation,” he said.
But when it comes to paying for streaming services, then consumers look at the service that offers them the most value for money. “We never had HBO or Showtime in India in terms of producing original Indian content for a digitally-savvy audience. The creative ecosystem was catering to TV and films. We need to create a new ecosystem and content for multiple platforms,” he highlighted.
According to Nair, OTT platforms also offer more data on consumers so decisions can become more informed, unlike TV where broadcasters always struggled to understand consumer behaviour because TRP was the only metric. The advantage for streamer is that can be “massy and classy”. A show can be created in a widespread spoken language but subbed or dubbed in multiple regional languages at the same time hence broadening its appeal.
Talking about recommendation engines on OTT platforms Nair said that like any other algorithm the more you use it, the more you get out of it. “To say that I’m being shepherded by the recommendation engine and it is reducing my choice is not a fair comparison. Everyone knows that a consumer’s content viewing choices operate between new and comfort. That’s why Netflix has the ‘Play Something’ feature,” he said.
There is a notion that TV is free and that the consumer has to pay for OTT. That’s why many consumers are still keen on ad-supported streaming services. Nair said that consumers were always paying cable distribution companies to watch TV. Similarly, today OTT services are built on top of broadband companies and telcos.
Speaking about ad supported streaming, he said, “Every time you do anything regarding messaging and selling within a content experience, then it becomes an art.” There are all sorts of ways to monetise content and a lot of companies are trying to crack it. “Netflix has 214 million paid subscribers and it is the most premium streaming service globally. If five people are sharing a Netflix account then 200 million becomes one billion. If they’re watching Netflix two-three hours daily then that’s how many premium customers there are who don’t want to come into contact with regular advertising messages,” he observed.
Nair said that the lockdown has been a uniform experience for nearly every human being on the planet. “We used to think TV is our window to the world but actually TV is only the window into your neighbourhood. The internet is the window to the world," he said. The inevitable outcome of this is that the consumer has become used to the fact that there is a lot more content to watch.
