Advertisment

As viewership spikes, OTT players to invest Rs 2,500 crore in content in next three years

Top OTT players have lined up major investment in content as the battle to attract viewers heats up. Several players are hoping to turn profitable by 2021 on the back of increasing paid subscribers

author-image
BestMediaInfo Bureau
New Update
As viewership spikes, OTT players to invest Rs 2,500 crore in content in next three years

With the number of over the top (OTT) media viewers likely to touch 400 million in the next three years, major segment players are heavily investing in creating and distributing original programming in Hindi and regional languages.

According to industry estimates, the major OTT players are likely to spend Rs 2,500 crore in building original content on the platforms, distribution and technology, other than the sports content on OTT.

The investment plan

Eros Now has locked in close to US$ 50 million to invest in marketing by FY 2020. Hotstar has received funds worth Rs 516 crore from Star US, most of which are going to be invested in content. Though Netflix’s India-centric plans are not clear, the content head at the global OTT platform had mentioned that close to 85% investment will go into content. In 2017, Netflix had expressed plans to spend close to Rs 2,000 crore on content in India for the coming few years. Amazon Prime Video had said in March this year that it will invest US$ 300 million on content in India in this financial year. Of the total Rs 500 crore earmarked for the coming three years, AltBalaji will spend majority of this on original content.

Ali Hussein, COO, Eros Now, said, “The cost of technology is also very high, but as you develop scale and get critical usage, the net effect on a per subscriber basis also comes down. The content cost is not looking at decreasing though.”

“Content investments are going to be high and it will go on increasing as time passes. Investment in technology is interesting in the sense that as the product starts gathering scale, the cost of technology per user goes down. But an additional investment in technology is cropping up, in knowing how the consumer behavioural patterns are changing. Investments in technology are also happening on the larger screen, beyond mobile screens. However, the total investments in technology would not be as much as the content investments,” he added.

Decoding the marketing strategy

Marketing is crucial because all the OTT players are right now in a customer acquisition mode. Though the number of users on digital is growing, it still hasn’t reached a position where the digital players can sit comfortably. Hence, marketing remains a crucial part of the growth strategy.

Hussein explained, “Marketing is going to be an interesting exercise because we have already got a certain amount of scale – about 113 million registered subscribers. Our job will be to ensure to be able to continue to build the brand and service from data science and re-marketing while we continue to target more of tier II and tier III audience and increase the funnel of users. In general, investments are going to increase across verticals but the investments in content are going to disproportionately go up.”

Eros Now is also entering the international markets through partnerships. It recently announced association with Iqiya to enter the China market. Other players such as ALTBalaji and Zee5 are planning to cash in on Indian diaspora since they have the potential to pay more for content in their native languages.

To this, Hussein said, “We are going to focus on creating a brand, and it will still be a mix of brand marketing and content marketing (marketing the content) for some more time, say for next 12-18 months. Another part is that we will also be investing a large amount of monies in marketing in the international market. We are looking at building Eros Now in other markets too. The marketing on the brand side will reduce in some time, once you gain a critical mass (which may vary for different players). After that a lot more focus will be on aston marketing, CRM and remarketing, to increase the customer affinity. Depending on how our international markets pan out, we will also continue to enter the newer markets for Indian programming around the world.”

Info@BestMediaInfo.com

OTT players
Advertisment