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How Jio GigaFiber will impact OTT platforms

Experts say the rollout of the service will open a new distribution avenue but it will still pose a challenge to the existing OTT players

Mukesh Ambani's announcement of the long-awaited GigaFiber broadband has evoked a lot of buzz across the industry as an entirely new ecosystem is coming into play.

Rolling out on September 5, Jio GigaFiber starts at Rs 700 a month and offers various bundled services. The Jio STBs are different from the existing STBs that are provided by Airtel or Tata Sky. The biggest difference is that Jio's STB is an all-in-one entertainment console and is said to offer over the top (OTT) platforms such as Netflix, Hotstar and Voot among others, along with internet services. Also, Jio GigaFiber subscribers will not have to pay separately for broadband, telephone calls and TV services.

According to experts, the rollout of the service comes as good news for OTT platforms as it will see a paradigm shift from a content delivery perspective to the investment perspective in infrastructure that will not only benefit viewers but also businesses. The service is said to change the dynamics and ecosystem of content consumption on OTT platforms.

Ali Hussein

Speaking about the change in the digital ecosystem due to Jio GigaFiber, Ali Hussein, COO, Eros Digital, said, “A lot depends on the distribution of the network for seamless consumer access. Jio GigaFiber is going to change the digital ecosystem with its introduction of offering a host of features across various price ranges, making it affordable for all the consumers. With its pricing low, it will strengthen the presence of digital media in the rural markets by providing a good network and great content. The quality and the depth of engagement will allow users to have a better experience and engagement with online video.”

The launch of Jio GigaFiber will not only change the dynamics of digital but also strengthen digital reach in rural markets. According to Vishnu Mohta, Co-Founder of Hoichoi, the service will strengthen digital reach in rural markets due to increase internet and smartphone penetration.

“Due to internet penetration in rural areas and an increase of smartphone usage, there is a rapid rise in online content consumption. OTT players right now are enthusiastic about partnerships to ensure mass distribution of their content. Some content works better in your own platform and some in others, ultimately the benefit being solely yours. How you choose to make the best of a situation depends on your strategies for your platform — pricing model, interface, content variation, availability across channels/media,” he said.

Though the launch of the service will open a new distribution avenue, it will still pose a challenge to the existing OTT players, as Reliance Jio is also planning to launch several original shows through the service. Jio Fiber is also planning to launch a 'First-Day-First-Show' in the middle of 2020 for its premium customers, enabling them to watch newly minted movies from their living rooms.

The launch of this service will act as disruptor for OTT platforms that currently have an 80-day ceiling to air new movies.

Girish Menon, Partner and Head, Media and Entertainment, KPMG in India, said the pricing model will play a major role. "If the economics of the price is available, then we will see choice taking place. There will be a price point difference as on Amazon and Netflix, we get to watch a movie in two to three month windows; now if we are going to get to watch a movie on the same date and time, then the pricing difference will come into play. We have to see how they are going to price it. Now even on Tata Sky, we have certain films that are exclusively priced and the consumer has to pay for it separately.”

Menon said for OTT players, it is a positive move as they have got one more distribution avenue. However, the challenge for OTT players will be how to get the value.

“What is happening is with Jio GigaFiber, all are saying, is that they will do bundle deals and so their problem is the value. They are like: am I going to get enough value for what I am offering? That is their challenge. Whether they will pay adequately is their problem. At the industry level, they are comfortable because it gives better access to consumers but economics is where they are concerned,” Menon said.

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