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Are English channels hurting themselves by running ads from premium OTT platforms?

Why is it that OTT players promoting movies are not considered as conflicting with the interest of movie channels? A analysis

Strangely enough, OTT platform owners are using TV channels as one of the crucial mediums for publicity, so much so that the category spends over Rs 200-240 crore on advertising.

One can spot ads by Amazon Prime, Netflix or AltBalaji on English entertainment channels. Broadcasters are generally quite sensitive of weeding out ads wherever there is conflict of interest among advertising categories. So why are OTT players promoting movies not considered as conflicting with the interest of the movie channels?

Aparna Bhosle

Aparna Bhosale, Business Cluster Head, Premium Channels, ZEEL, said, “It is because the sheer numbers are incomparable. We have 220 million individuals watching English content/ movies, the OTT viewers’ figures are in single digits. As of now, they are not going to affect my viewership. But we are continuously tracking them. The day they become large enough to hurt me, which might be a few years away, I will stop accepting ads from them.”

One of the broadcasters, who didn’t want to be quoted, gave a different but quite valid argument for running these ads.

He said, “The audience who are prospective movers to digital will shift anyway, irrespective of these ads. Then, why do I compromise on the business. I don’t see that these ads will motivate any significant chunk of viewers to move from TV to digital. There are a lot of factors for this – people who can afford to be present on OTT and consume content are a very small subset of the TV watching universe. Another thing is OTT and VOD is increasingly becoming one of the major categories that advertise on TV. In such a scenario, barring one category is not something the industry will approve of.”

Shift from TV to digital

While everyone keeps talking about viewers shifting from TV to digital, there is no data to prove this. Television has a third-party measurement but digital lacks that and hence, there is no data to co-relate the viewership on the two platforms.

Neeraj Vyas

Neeraj Vyas from SPN India, said, “Not everyone is a subscriber to the OTT services. TV is still the cheapest mode of entertainment in India. One should have a very strong reason to shift from TV to digital. Consider this: Netflix is expensive, while Amazon Prime’s primary business is its e-commerce vertical and OTT is their way of customer acquisition.”

Another important factor on data is that while the subscriber base of an OTT platform is measured and claimed by the platform owners, not all are active viewers and these platforms don’t talk about content-specific or series-specific viewership.

Navin Khemka

Navin Khemka, Managing Partner, Wavemaker India, said, “It’s not that someone watching on TV will suddenly switch it off and watch it on mobile. Distribution and content are today becoming two separate areas, not necessarily related to each other. The same content can be viewed across platforms. I don’t think these ads will take TV viewers away from the platform.”

Is there is a fear of losing viewers from movie channels? Khemka denied. He added, “I think OTT is still restricted to being a catch-up TV and the streaming of live (sports) events. Some more for the exclusive content that they are offering, but not beyond that I think.”

Futuristic alertness

While all the experts we spoke to saythe worry will be when OTT numbers are comparable to that of TV, Vyas added, “I feel that viewers will be happily divided into OTT and TV and both will have their place. Currently, there is no such data to prove this shift.”

The difference of screen size is also crucial. Ekta Kapoor, JMD and Creative Director, Balaji Telefilms, once said in one of her public appearances, “Movies are community viewing, TV is family viewing and mobile is personal (individual) viewing.” She clearly set the differentiator for the three AV content platforms.

Khemka, however, mentioned that the worry will be when some of these screen sizes get inter-changeable. “The real worry will be when the streaming screens will grow big through smart TVs and Firesticks, which is currently restricted to a smaller population. Eventually, when this becomes significantly larger, then the TV channels need to really worry because the same content will be available on TV screens and it can be family viewing. The TV channels will have to keep an eye on the growth of OTT, though it will take some time to get there. Cost of data will also play an important role to play.”

Suggesting another quicker remedy, if there’s still a fear of losing viewers, an industry observer said, “What one can do is to allow only webseries promotion on movie channels, but then, they will miss out on the premium that they charge from some of the ‘non-FMCG/FMCD’ categories. Say for a movie that is premiering on the movie channels, if the ad rate is X, this amount continues to decrease in the subsequent screenings of that movie. However, at all times, this X has the highest value for some of the new-age advertisers like e-commerce, OTT and mobile wallets.”

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