By Divya Dixit

We are in the era of digitization where we have seen many industries, especially entertainment, align towards a massive shift in consumption and consumer behavior.

With the pandemic giving the catalytic push to OTT platforms globally and cinemas losing the sheen, one of the most discussed topics in the field of entertainment is the future of OTT vs. linear television.

While the global figures of the OTT industry are predicted to reach a fairly substantial US$ 332.5 billion by 2025, it’s the evident massive consumer adoption of OTT that is slowly shaping it to be an essential medium for advertisers and marketers.

During the pandemic, OTT industry witnessed nonlinear growth as consumers went online looking for unexplored content. As per the OTT audience sizing report released by Ormax, India’s OTT consumers have grown by 20 percent in 2022 from 353 million to 424 million people.

But this growth dominantly surfaces from smaller towns and the rural areas of the country as the cities are nearing the saturation point, with an average consumer already paying for two-three subscribed content platforms.

The TV story in India continues with India set to become the third largest TV advertising market within the next two years as per Changing Landscape of Indian Television report 2022 by GroupM Finecast and Kantar.

While linear TV will grow at about 9.7 percent, it is the Connected TVs that will drive the growth in terms of device sales as well as advertising revenue. Smart TVs accounted for 90 percent of the total TV units sold this year, which is testimony to the fact that linear TVs are getting phased out, with close to 80 percent of linear or traditional TV users intending to switch to connected TVs in the next one year.

Still, linear channels have a structured viewing pattern, which creates premium time slots from an advertising revenue perspective. If launching a national product, then national television represents a go-to tactic for brand lift. By driving mass reach and awareness it initiates a full-funnel attribution.

Though, tracking the performance of linear TV advertising is extremely limited, still you can target a certain set of audiences via specific channels as well and these attributes still drive advertising on linear TV.

When you see the data in this light, it seems like OTT platforms and the streaming market will make hay while the sun shines. However, the picture is a bit more complex in reality.

With 60+ OTT players in the arena, the competition is stiff, tech cost and content cost high and CAC has gone through the roof and the future will see quite a few tweaks.

Collaborate, collaborate, collaborate…The collaboration on content creation doesn’t only amortise the rising content cost, but partners are also able to leverage each other’s strengths, understand consumer insights better, co-market and monetise the product with combined reach strength. If viewed with a dispassionate lens, it’s a perfect manner of cutting the costs of content, marketing and CAC (customer acquisition cost).

Aggregation is the name of the game … With multiple aggregation platforms in market like Jio, Airtel XStream, NXT Play, Tata Play Binge, Watcho, OTTPlay, market is mirroring the frustration of an average consumer who is unable to pay for multiple apps to watch unique content is now consuming various apps through bundled products at a hugely discounted price.

While smaller platforms take this advantage for reaching out to a larger base with zero CAC and marketing cost, for the bigger platform it translates into added revenue via new small town geographies.

Industry experiments with revenue models will go on… Revenue models such as AVOD and SVOD have both seen a respectable growth with SVOD audience growing from 110 million to 130 million (18 percent growth) with 31 percent of India’s entire OTT audience share.

For a consumer while AVOD is easier to adopt, for the platform it’s a huge cost to scale up and substantial efforts to monetize via brands. TVOD has also started making inroads in certain platforms and is catching on for fairly big content pieces.

Therefore, hybrid is the way to go as larger platforms are also recognizing and adapting to now.

India being a mobile first country, OTTs will need to leverage the 5G model to their advantage for faster and more reliable access to end-users. This allows for OTT platforms to use mobile phone connections as one of their dominant ways to extend their audience base.

Herein, again platforms will need to work with differential pricing tiers, basis content groupings, device types or add on services offered.

Personalization is the future of OTT… The need of the consumers for personalized experiences, personalized content that suits their areas of interest and recommendations will get fuelled and quenched by OTT platforms. Menu layouts will show what is new and trending, what they were watching, suggestions by genres based on the viewers’ preferences on how to find their content.

Future is connected and content is the king being distributed across all devices.

(The author, Divya Dixit, has 20+ years of experience in marketing and brand building across industries — digital, broadcast, telecom, and music. Her last assignment was at ALTBalaji where she headed the platform’s  Marketing, Partnerships & Revenue aspects. Prior to ALTBalaji, Divya has been in leadership positions at organizations like ZEE5, Sony, UTV, Tata Docomo and Barista. The views expressed here are personal and Indianbroadcastingworld.com does not take any responsibility for them )