According to EY’s 2023 report on the Media and Entertainment sector, bundling of various OTT platforms by ISPs and telcos will gain scale. They will in effect play the role that DPOs played in the television sector – but the customer will need to be provided with the choice of choosing different OTT platforms to bundle.
As the battle for subscribers intensifies in the ever-expanding realm of OTT platforms, industry experts have put forth some solutions to address the challenge of clubbing subscriptions. They emphasised on the importance of understanding customer preferences, forming strategic partnerships and delivering a seamless user experience to enhance customer retention.
By personalising content, forging alliances with telcos and cable TV providers and offering bundled subscription packages in collaboration with complementary services, OTTs can overcome the hurdle of subscription consolidation.
Additionally, investing in exclusive content rights and actively incorporating customer feedback can further bolster customer satisfaction and loyalty, industry experts stated.
While speaking about the strategies that OTT platforms can employ to address the challenges of clubbing subscriptions and ensuring customer retention, Nitin Burman, Vice-President and Head- Non-Subscription Revenue, Arha Media, said that OTT platforms need to understand what kind of content a particular individual is watching, what time he or she is watching and what duration of content he or she spends on the platform.
"The moment OTT platforms are able to know that, they will be able to provide personalisation to the viewer. Moreover, they will be able to give him or her better and relatable content which will make the viewer stick to the platform," he said.
“In order to curb the prices which have gone up, we will have to leverage on partnerships. There are two types of partnerships, one is telco which most of the OTTs today are opting for and the second one is a broadband or cable TV partnership. Those partnerships are very important because there is already a distribution setup which is already done by an existing telco,” he added.
Karan Taurani, SVP- Research Analyst (Media, Consumer Discretionary and Internet), Elara Capital, said, “In India, people really want to have more for less. So if you look at TV as an offering, you have got typically 800 plus channels at a price of Rs 300. OTT platforms also need to come into this kind of partnership ecosystem wherein they don't actually produce all the content themselves. They could do some sort of a partnership with other smaller apps and that could be a mutual benefit. The larger OTT apps can get the benefit of a depth in the content catalogue or depth in various genres of content which is there.”
“On the other hand, smaller platforms can get access to the premium customer or to the wider customer base which is there. So, clubbing and aggregation of subscription is the next big thing and we really need to have some large aggregators because the market is very fragmented with close to over 40 OTT platforms,” he added.
Speaking on the similar lines, Avinash Mudaliar, Co-founder and CEO, OTTplay said that in order to address the challenge of clubbing subscriptions and ensuring customer retention, OTT platforms can collaborate with other complementary services, such as telecom operators, internet service providers and e-commerce platforms to offer bundled subscription packages.
"OTT platforms should also focus on intuitive user interfaces, personalised recommendations and features like cross-device syncing and offline viewing. A user-friendly experience encourages customers to stay loyal to the platform," Mudaliar said.
“Investing in exclusive content rights and producing high-quality original productions can be a compelling reason for customers to maintain their subscriptions. OTT platforms should continuously strive to offer unique and captivating content that cannot be easily accessed elsewhere,” Mudaliar said.
“Encouraging customer feedback and actively implementing improvements based on user suggestions demonstrates that the platform values its customers' opinions. By incorporating customer feedback into platform enhancements, OTT platforms can increase customer satisfaction and retention,” he added.
Piracy of OTT content
Burman of Arha Media said that piracy of OTT content on various platforms is one of the toughest challenges which every OTT player is facing. OTT players have a continuous battle against piracy.
“We have certain technologies like digital rights management (DRM), like watermarking and fingerprinting of content in order to curb piracy. However, it requires a policy-level intervention by the government. Players like Telegram should be covered under the law of the land today,” he added.
Taurani said that piracy has always been a problem for the industry but it has come down very sharply because of two reasons.
"One is that data costs have come down. Secondly, we have moved from a browser to an app economy and customers don't want to download and own the content now," he said.
“They are looking for streaming content because clearly data pricing is very low but piracy still remains to be a problem with social media. However, these kinds of problems are more relevant in the lower end of the audience and I don't see audiences of Amazon Prime or Netflix kind of platforms rooting for piracy. It is more there in terms of tier 3 and tier 4 markets,” Taurani added.
Mudaliar of OTTplay said that in order to combat piracy and protect their content, OTT platforms can take some measures including having a robust DRM. Implement strong encryption and watermarking techniques to prevent unauthorised access and distribution of content.
“At OTTplay, we have invested heavily in our technology to weed out all such possibilities and give users the best experience across devices and platforms. OTT platforms can also collaborate with law enforcement. They can partner with law enforcement agencies to share evidence and prosecute individuals involved in piracy,” he added.
Furthermore, Mudaliar said that other measures include geo-blocking and IP filtering, anti-piracy efforts, competitive pricing and access, user education and technology upgrades.
Chandrashekhar Mantha, Partner, Media and Entertainment Sector Leader, Deloitte India, said, "Indians are fine to be shown a few ads but with lesser or no subscription fees. We also rank at number three in the world, when it comes to visiting content piracy websites (7 billion visits in 2022). This further adversely impacts the growth of the OTT industry. Though platforms have taken steps to overcome piracy with the use of multiple tech-based solutions like digital rights management, watermarking, VPN blocking, secure URL and bot traffic identification and blocking, the issue still remains a concern for the industry.”
Furthermore, he stated that a change in the pricing and distribution strategy may address some of the piracy issues.
Alternative Models to drive SVOD Growth
While speaking about some alternative models or approaches that OTT platforms can adopt in order to drive SVOD growth and cater to a diverse audience, Burman of Arha Media said that most OTTs today are following hybrid models.
“We have also gone into a hybrid model. When we launched three years back, for a year and a half we were a pure SVOD model but then we realised and pivoted into a hybrid model. India is a vast market and we have a variety of consumers including a niche of consumers who want to watch content in 4k Dolby and are ready to pay a premium for it. So, for such custom consumers, the most important thing is the quality that you are providing them and they are ready to pay you extra bucks for that. So, we have a gold plan which has all the features and it is ad-free for my premium customers,” Burman said.
“Then there will be consumers who are okay with watching a certain level of ads so they don't mind watching one or two ads in a two-hour content. There will be certain people who are okay to watch only pre-rolls which is an ad played before the video content starts playing and then no ads at all. So, we have also made a multi-tiered plan which allows people to choose basis their preferences and if you do not have the capacity to spend on a subscription then you can go for lower prices. We are informing our consumers upfront about ad-free plans and limited ad plans that they can opt for and pay accordingly,” he added.
However, there is no correct model but the trend shows every major platform including Netflix announcing ads to be rolled out very soon. So, that's the way forward where platforms are going to offer multi-tiered and multi-levelled plans with and without ads to people.
According to Mudaliar of OTTplay, to drive SVOD growth and cater to a diverse audience, OTT platforms can adopt alternative models and approaches like bundled subscriptions, lighter versions of subscriptions, freemium models, tiered content packages, exclusive premium content, partnerships and co-productions and micro-transactions and pay per view.
Meanwhile, Mantha of Deloitte India said that subscription models that make content viewing affordable to almost anyone may be a better business response to tackle these issues.
"Lighter versions of subscription and AVOD models for platforms that have traditionally been SVOD centric and content released at a single point in time globally may work positively for the OTT market. Once the OTTs have invested in fixed costs like content and tech, it is their business and pricing strategy that will try to get the best revenues out of them. Creating awareness about the attractive pricing tiers through targeted marketing initiatives can further support the SVOD adoption," he said.