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Price points of OTT market still not very well settled: Deloitte's Chandrashekar Mantha

Mantha, Partner and Media and Entertainment Sector leader at Deloitte India, also throws light on innovative strategies and business models that can effectively attract a larger audience for paid OTT content, advertising-supported OTT streaming, sustainability of subscription-based monetisation models and more

Chandrashekar Mantha

Chandrashekar Mantha, Partner and Media and Entertainment Sector leader at Deloitte India, underscored the importance of self-regulation in the OTT industry and said that lesser regulations may give content producers the freedom to showcase the content with adequate disclosures.

Mantha shed light on the innovative strategies and business models that can effectively attract a larger audience for paid OTT content. According to him, this space is still evolving in the sense that the price points of this market are still not very well settled. 

"We have seen OTT platforms adopting different strategies like subsequent roll out of an ad-based tier or providing marque content free initially to get the viewers on the platform. We just witnessed an OTT platform launch a cheaper, toned-down version of its subscription. So, I think there will be a lot more innovation in terms of pricing, offering and bundling. Pricing tiers may see changes based on the competition and ability to attract audiences,” Mantha said. 

“For OTTs that also have other businesses like apparels, ecommerce, online stores etc, the product or service offerings can be extended to other businesses too, thereby creating a more enriched ecosystem that gives better customer lifetime value. Bundling with telecom has historically worked well for the initial acquisition of customers. It is the content and pricing strategy that matters later on to keep the loyalty of the audience. The customer experience with the app also plays a crucial role," he added. 

Sharing his views around advertising-supported OTT streaming, Mantha said that in India, nothing will replace anything at least in the near future, although the newer mediums may become more prominent. 

“We still have a healthy print industry going on and everything co-exists very beautifully in our country. So, there will be TV, OTT platforms and digital medium as well and all of these mediums will find their space effectively in the Indian market because the consumer diversity is so wide. Also, paying ability in a city is very different as compared to a town. We will have audiences of both types coexist, one who prefers a premium ad-free viewing experience and the second who wants to consume the same content but is fine to be served with a few ads if the pricing is discounted. The ad-supported models surely can help OTT platforms to further increase their viewership base,” he added.

In response to the question regarding the sustainability of subscription-based monetisation models and the potential for OTT platforms supported by advertising, Mantha said that global OTTs that have historically been SVOD players are now experimenting with AVOD models too. 

“Similarly, if you look at most of the Indian OTTs they have always had an ad play. Some of the niche regional content providers have been very successful with their only SVOD offerings. India is a very typical market and you will have to come up with unique or alternate ways of making revenue or monetising your platform. So, there will be multiple models in play like AVOD, SVOD, hybrid and others. Going forward, a lot of new revenue models may emerge so that audiences at various price points can be served,” he added. 

Mantha also shared his perspective on the statement "less regulation is the best regulation" made by TRAI chairman PD Vaghela.

Mantha said that major OTT platforms in India may be following their own internal guidelines as self-regulation. Common practices like age certification before the content begins and warning notification on any alcohol or abusive language usage have been seen across platforms. So, these platforms are fairly self-aware of their responsibilities as large media companies towards the audience. 

“It may also be acknowledged that OTT content may depict content in its way after providing the guidelines to the viewers. The viewer may choose to watch or otherwise based on the notifications. Lesser regulations may give content producers the freedom to showcase the content with adequate disclosures. However, it can have an impact on acceptance in the society at large and how the other participants of the media ecosystem (like broadcasting) view it,” he added. 

Further, Mantha emphasised the importance of dialogue and collaboration between the government, industry players and other stakeholders to ensure the long-term sustainability of the OTT industry. 

“Any conversation is good conversation and I am always of the view that any dialogue between the industry players and regulators and ministries is only going to help because there will be many more opportunities to express some of the challenges and identify a common ground to build solutions that will only benefit the industry at large as well as protect the public interest from a regulators standpoint,” he added. 

Speaking about the gaming industry, Mantha said that the government's certification for 'permissible' online games is expected to have a significant impact on the gaming industry in India. 

“The government's certification is an interim measure until the Self-Regulatory Organisation (SRO) is formed. The objective seems to be very clear, to deter apps that promote wagering. The gaming industry may witness many games or apps being pulled out by intermediaries and platforms based on this principle. It will refine the ecosystem from all wagering-based games, (i.e. wagering on any outcome) that may be disguised as a regular game. A clear methodology to obtain the certification is yet to be defined, also a clear definition of what will be included as wagering and exclusions if any need to be clarified,” he added. 

Further, Mantha emphasised the importance of striking a balance between regulating online gaming for economic purposes and addressing civic responsibilities. 

“Gaming as an industry can provide great employment opportunities, harnessing talent and revenue to the government in the form of taxes. This sector is also growing consistently in double digits in India. While the sector growth is promising, it is of utmost importance to make this socially responsible as gaming may have an impact on an individual’s mental health. Gaming companies do have their own internal processes to identify abnormal trends with users and support them with counselling. The government's move to bring in Self-Regulation is a welcome move to get to further responsible gaming. Thus, a balance between the economics of gaming and its societal impact is very critical,” he added. 

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