As over-the-top (OTT) video streaming platforms invest heavily in creating original content and with easy access to mobile data, the number of online consumers is increasing rapidly. The increasing appeal of OTT platforms might lead to the cord-cutting sooner than expected, according to a new report, Unraveling the Digital Video Consumer: Looking through the Viewer Lens, published by global auditing firm KPMG and video streaming service Eros Now.
The report carried out an Indian online video consumer survey that was commissioned across 1,458 OTT users in 16 cities of India, to ascertain the usage of OTT platforms by consumers.
According to the findings, more than 80% of the respondents across different cities, tiers and income brackets were able to fulfil their entertainment needs completely through online videos. Of the 80% respondents, nearly 38% said they would consider cord-cutting in the future as their entertainment needs were being fully met by the online platforms.
Speaking about the reason behind cord-cutting, Girish Menon, Partner & Head Media & Entertainment, KPMG in India, said, “Economics plays a main role. Earlier, the fact that cable economics was so cheap, effectively meaning that there was no incentive to make this an either/or decision. One could say that they will continue to pay for cable as well as consume some free online content. However, now TRAI’s NTO order has a potential to change that dynamic, as cable is becoming more expensive and it is going to reach to a decision point where consumers might make this either/or situation as compared to the current complementary situation. Consumption pattern seems to indicate that the supply has been met but now it is a question of making an economic decision as well.”
The ‘quality of content’ available on online video platforms and the freedom of ‘anytime, anywhere viewing’ were the primary drivers of the intent behind cord-cutting by a majority of the respondents. The report also suggests that the universal access of online videos along with the diversity of content available are some of the key drivers behind such assertions made by the respondents. According to the experts, the regulatory setup and value-added services (VAS) will also accelerate the cord-cutting in the near future.
Ali Hussein, Chief Operating Officer, Eros Now, said plenty of investment is taking place in building infrastructure for the digital ecosystem, which will make the transition to cord-cutting faster than the US.
The report analysed the content category preferences for the potential cord-cutters, for whom movies and television content (catch up) were of primary importance. However, the preference of originals was surprisingly lower than the non-cord cutters. The lower preference of online originals among cord-cutters could also be a function of the relatively low supply that originals suffer from in the market.
According to the report, movies have a larger contribution of viewership with 30% of consumers consuming full-length feature films on OTT platforms; followed by 22% consumers who opted for catch-up TV, 20% opted for movie-related content such as music video and 16% choose sports. Surprisingly, originals were preferred by only 10% of consumers.
Furthermore, 58% respondents watched movies in over more than one session. The percentage is significantly higher in the metros (85%), as compared to tier-I or tier-II towns, highlighting the relatively lower disposable time on hand in the metros. The report noted that the preference for movies is significant given the limited supply of original content on platforms as compared to the library content.
Hussein said movies are meant to cut across demographics and cater to the least common denominator, so it isn’t surprising that they make up nearly 50% of the overall content consumption.
The report said the freshness and uniqueness of content are the key determining factors for installation and uninstallation of apps, as well as respondents subscribing to platforms. Nearly 87% of the respondents install an app considering the quality of content.
Menon said, “The online video consumers in India have evolved in a significant way in the last couple of years. With consumption now going mass and viewers spending close to 8.5 hours a week on online videos, we see a homogenous pattern of consumption emerging cutting across age groups, income levels and professions. Our report touches upon the future of this consumption evolution, and how online video could potentially disrupt traditional distribution in the coming years. This represents a large opportunity for platforms to tap into the ever-expanding universe of digitally connected Indians.”
According to the study, around 30% of respondents prefer watching content in languages other than Hindi and English. The preference for content consumption is significant in the native languages across large parts of the country, with south India the most loyal to their native tongues. The study features that nearly 28% of the respondents consume content during traditional office hours of 10 am - 6 pm.
Highlighting the consumption pattern, the report suggests that Indian OTT viewer spends approximately 70 mins a day on online video platforms, with a consumption frequency of 12.5 times a week, i.e. more than once a day. Viewers are also accessing 2.5 platforms at a given time. While the customer sets are fairly heterogeneous, a trend of homogeneity was observed in terms of consumption frequency and duration across age groups, income levels and genders.
The report states that three out of 10 users are watching online video on telco platforms, outlining the importance of the medium in terms of distribution. Integrated telco billing is one of the factors that are likely to help drive VOD subscriptions in the future.
While India is initially a mobile-viewing market, the recent rollout of fiber to the home (FTTH) will further mark the changes in the internet consumption pattern. On the impact of FTTH rollout, Menon said, “With FTTH rollout and plans that everyone else is looking out, what interesting to look out is, will this bring out any change as wired broadband becomes a larger play in India? This is something that we have to look at in next 12 to 15 months as that would have some implications on how the internet is being consumed and content being viewed in India.”