Tier-2, 3 cities fuelling CTV growth: CloudTV’s Abhijeet Rajpurohit

In a conversation with BestMediaInfo.com, Rajpurohit explained that tier-1 markets are largely saturated, with repeat customers upgrading devices like smartphones or smart TVs. In contrast, tier-2 and tier-3 cities offer fresh opportunities, with new users accessing affordable smart TVs, often as their first step into the smart TV ecosystem

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Abhijeet Rajpurohit

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New Delhi: “We don't really care how big or small the brand is. Our job is to make entertainment accessible,” said Abhijeet Rajpurohit, COO and Co-Founder, CloudTV, emphatically. In a conversation with BestMediaInfo.com, Rajpurohit spotlighted that the real growth is coming from the tier-2 and tier-3 cities.

Tier-1 saturation

Explaining the current scenario for tier 1, Rajpurohit said, “Tier 1 is more or less saturated. It's not to say it's not a high-paying market—it probably still pays more. However, you're not penetrating the market further by selling in tier one.”

Elaborating on the mechanics behind the thought, he added, “You probably have repeat users when you sell to a tier-one consumer. The same person who had an iPhone 10 last year will have an iPhone 12 this year and then an iPhone 15 next year. But when you go to tier two and tier three, a new user is acquiring an iPhone.”

“You're opening up the market more by selling in tier-2 and tier-2 cities,” he said. “It's the same way for us. When cloud TV devices sell, what we've seen or heard from many of our brands is that most of these people don't have an existing smart TV. They are gaining access to a smart TV because it's now affordable,” he added.

When it comes to tier-1, primarily some people are purchasing their second smart TVs. Secondly, we are also seeing people who are buying their secondary smart TVs. Perhaps for a bedroom or a kid's room. They don't want to buy a new, premium television for these scenarios. They can buy an affordable television, even a smaller one, because they won't be viewing it from close range.

Tier 2 & 3: The real fuel for growth

One of the most glaring aspects of CTV growth is the increased affordability and accessibility of connected TVs. Cloud TV, the operating system powering the CTVs, is currently in collaboration with more than 200 brands.

Extrapolating his statement, Rajpurohit said, “We haven't heard of many of these brands because they are not national-level brands. Many are regional and focused on a couple of states. Some are even focused on a couple of cities or villages. This is because brands ultimately look after distribution; that's their forte. They are very good at distributing the devices, selling to consumers, and providing service.”

According to Rajpurohit, the growth in the smart TV market is primarily driven by increased adoption in tier 2 and tier 3 regions. This is because these areas represent a largely untapped market with a growing number of first-time smart TV buyers and those purchasing secondary TVs for bedrooms or other rooms. These consumers are often more price-sensitive and prioritise affordability over premium features.

Why is Cloud TV different?

Rajpurohit mentioned, “Firstly, we offer greater speed and flexibility compared to global operating systems or partners. Global companies often have rigid standards and practices they must adhere to. However, Cloud TV is flexible and can work with customers to modify these standards on a case-by-case basis, tailoring our solutions to their specific needs.”

Talking about the advantages of Cloud TV as an OS for CTVs, Rajpurohit said, “Just like with social media ads, Cloud TV shows you the data not only on how many times your ad was shown, but also where and when it was shown, how many people watched it, and completion rates. These insights are crucial for brands to understand the effectiveness of their campaigns. We don't want brands to advertise on a platform where their campaigns are not successful.”

He further explained, “Campaign measurement is a critical factor. We use industry-standard tools like ad servers and established partnerships to track and share data with the agencies representing these brands. This ensures transparency and allows brands to understand the performance of their campaigns.” 

The bridge

Fortifying CTV as the bridge between linear television and digital, Rajpurohit explained, “Connected TV (CTV) offers the best of both worlds: the familiar viewing experience of traditional television with the advanced targeting, reporting, and analytics capabilities of digital platforms. From an advertiser's perspective, CTV presents significant advantages.”

He continued saying, “While the industry is still evolving and standardisation is ongoing, this presents an opportunity for brands to experiment and learn in a relatively cost-effective environment. Similar to early social media marketing, brands should embrace this period to understand what strategies work best for them in this new medium.”

“One key advantage of CTV is its inherent impact. Unlike digital platforms like YouTube or social media, where viewer attention can easily be diverted, television viewing often maintains a higher level of engagement. This makes CTV ads more likely to be seen and remembered by the audience,” he noted.”

CloudTV and JioAds recently announced their partnership to aid CTV advertising in India. This partnership will be driving the growth of the CTV ads landscape in India, delivering value to advertisers and consumers with content that resonates. 

The recommendation engine

Recommendation is a significant challenge for Cloud TV, Rajpurohit pointed out. “While we strive for continuous improvement, a significant challenge we're addressing this year is minimising user time spent browsing content,” he said.  

He further explained, “With the proliferation of OTT platforms, broadcasters, and multilingual content options in India, users face an overwhelming amount of choices. This abundance leads to 'content fatigue' and makes it difficult for viewers to quickly find what they want to watch.  Our current recommendation engine aims to address this issue, but we are actively working to enhance it further. The ultimate goal is to create a seamless user experience where viewers spend minimal time browsing and can quickly access and enjoy the content they desire.”

Subscription & ads: The main revenue source

Speaking on the subject, Rajpurohit said, “I believe there's potential for introducing premium features or subscription models to generate revenue. While the specific details are still under consideration, subscriptions and advertisements will likely be the primary revenue streams.”  

“For example, we could offer a subscription model where users pay for access to enhanced features or exclusive content. Alternatively, we could offer a hybrid model with an ad-supported free tier and a premium tier with an ad-free experience and additional benefits,” he further noted.

CloudTV expands content lineup with key partnerships

Recently, the TV operating system announced strategic partnerships with Aha TV, Mask TV, JOJO, Ultra Jhakass, KLiKK, NeoTV+, and TravelXP. 

This collaboration with streaming services across multiple regional languages in the country will help build a content repository to serve CloudTV’s 12-18 million user base. 

Rajpurohit said, "Our goal has always been to provide the best content for the users and expand the range of offerings to our customers. Understanding the Indian market, and with our goal to also support local and regional partners, we want regional entertainment to be more accessible to our viewers. With these partnerships, our users will have access to the most popular and widely spoken languages in the country, such as Hindi, Bengali, Tamil, and Telugu. This partnership is aimed at advancing the digital entertainment sector and establishing CloudTV as the go-to platform for Smart TV brands seeking to offer a content-rich experience to their users.”

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