Talks of consolidation in OTT are a myth, says Sudhanshu Vats of Viacom18

The beauty of India is that it’s a heterogeneous market and offers growth potential for both TV and digital streaming services, said Sudhanshu Vats, Group CEO and MD, Viacom18, in an exclusive interview with BestMediaInfo.com.

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In order to grow, both television and digital have to achieve deeper penetration, he said. “TV will continue to grow and for Viacom18 it will always be a preferred industry. We will continue to focus on TV. We are spending far more this year on Colors this year than last year.”

Vats said Voot Select, the premium digital streaming service by Viacom18, will cater to homes consuming both digital and TV. He, however, said discoverability and navigation on digital remains a challenge.

Voot recently claimed to be the first profitable AVoD OTT platform in India. For its SVoD service, Vats is hopeful to break even in the next three to five years.

Talking about the OTT industry, Vats said there is a space for more players and it cannot be called overcrowded. He said, “TV has over 800 channels and we see more and more players coming in. Content will be the only differentiator for both TV and OTT players. The library, not the user base, will ascertain the value of any OTT player when it comes to acquisition. Else, the talks of consolidation are a myth.”

Excerpts:

Has OTT started giving television a run for its money?

India is a ‘TV and digital’ market and there is still a lot of growth potential for TV. The country has around 300 million homes, out of which there are only 197 million TV homes. So there are still close to 100 million homes where television is yet to reach.

We still lack 24/7 power supply in smaller towns and villages. In future, there will be more TV homes and viewership will go up as the power situation improves. There is a clear runway for linear TV.

I also believe once the data prices go to the right level, television will remain to be the most economical way of entertainment. For a country that has low-income homes, it will be a very powerful medium.

TV will continue to grow and for Viacom18, it will be a preferred industry. We will continue to focus on TV and we are spending far more on Colors this year than what we have done previous year. We will continue to remain committed to spending more on Colors next year.

The beauty of India is that it is a very heterogeneous country. Voot Select (the subscription-based digital service) will cater to the larger connected homes. However, television homes will continue to be an important area. The connected TV homes will be catered by premium services. As these two things grow, we will continue to make investments.

But, OTT has overtaken TV when it comes to marketing of shows. How do you see this trend shaping up?

From a marketing perspective, you will see a lot more marketing on digital. You are not only marketing for the programme but also for the platform. On TV, the good thing is that the platforms are very well established and they are a strong brand, which is why they market the shows. Marketing expenditure per show on TV will be a little lower than the marketing expenditure on digital. In digital, you want audiences to come in a hurry, almost like film marketing.

For the next 3-4 years, people are also focusing on building the platforms and that is why OTT is using every possible medium in a quest to bring in more audiences. Investing on TV, outdoor, radio and digital is very important for user acquisition.

People talked a lot about consolidation for the last few years but Viu was forced to close down. Are the talks of consolidation even real?

If you ask me a secular trend of consolidation in the media, it will continue for some time. But that does not mean any platform that is launched will be acquired. Some platforms will fall in the race and some platforms that are successful will merge or get acquired, that is the nature of the beast.

The audience can never be the driver of consolidation. Even now the library of content is important. If you see good and variety of content on one platform, some companies can even bundle.

Also, earlier people used to say users won’t keep more than one OTT platform on their phones. I believe in India every phone will carry four to five apps because that capability is visible now and will keep increasing. To this extent I say the talks of consolidation are a myth. Somewhere I also feel the quality of content is the driver and more work needs to be done in regards to discoverability and navigation for a consumer. The navigation ease on TV has to be bought on digital.

Voot recently claimed to be the only profitable AVOD platform. With SVOD, is there any pressure of profitability?

There will be an investment phase and a gestation phase. We will be making investments in a calibrated fashion. The gestation phase is likely to be three to five years.

When do you think OTT platforms will start making profits?

If the broadband revolution is really big then our ability to break even will go up considerably. Once broadband reaches the masses, a lot more paid services will be subscribed to.

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