Despite Netflix launch, industry remains unrattled
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10-01-2016, 02:48 AM
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Despite Netflix launch, industry remains unrattled
US-based internet TV service Netflix may have entered the Indian market earlier than expected, and even if it towers over domestic rivals Hotstar, Sony Liv, Ditto TV, HOOQ and Eros Now, to name a few, in terms of reputation, the industry is far from rattled. At least for now.
Agreed that Netflix has an impressive English content library — both licensed and original. But in the Indian context, it would need to go beyond this library if it is not to be categorised as niche. And here lies the challenge, because majority of the premium local broadcasters and studios have their own local content. And while Netflix could create originals for Indian consumption, it will take some time before that rolls out. “A lot of the Netflix content has not been syndicated to channels in India, so that is one advantage it has. It is too early to say what impact it will have on broadcasters, because internationally too, Netflix has not substituted TV and they co-exist,” says a senior executive of a leading English broadcaster. Broadcasters do not see any direct impact because TV and OTT are two different ecosystems. TV is appointment viewing, while OTT is on demand, and it will take three-four years for consumption and behaviour patterns to change. Jehil Thakkar, head, media and entertainment, KPMG India, says, “I don’t see any significant impact on broadcasters or other digital players in the near term, as 5-7 per cent of TV viewing audiences watch English content. Moreover, the broadband infrastructure in the country is still in nascent stages and it will take three-five years to build a number to get critical mass.” He adds that Netflix could be a threat in the long term to broadcasters when consumers do the cord-cutting and consumption predominantly shifts from TV to digital. Second, with a subscription model starting at Rs 500 per month, Netflix is priced fairly high for the Indian market. This premium pricing will certainly attract premium audiences willing to pay to watch high quality international shows, but again, it will impact other players only once it builds a content portfolio with larger Indian content. The OTT giant presently has an inventory of Bollywood films like Piku, Andaaz Apna Apna, Hum Aapke Hai Kaun, Maine Pyaar Kiya, Dev D, Shor in the City and Heropanti among others, a mix of classic and independent films that could attract some viewers. “As it stands today, Netflix will play the role of a ‘category expander’ for the online video market, as it is the only subscription based VOD service with the kind of content it has,” says Viacom18 Digital Ventures COO Gaurav Gandhi, adding, “The price spectrum and the niche content it has will open a new online video market in India.” However, Eros International Group CEO Jyoti Deshpande states, “To cite an example, in our experience of a partnership we had with HBO to launch the premium digital ad free channels on DTH and cable, even the Rs 200 pricing for two channels meant a ceiling of two lakh subscribers, beyond which there was no appeal. The premium pricing that Netflix aims at alienates the core category driving consumption, that is, the middle class section in a mass volume market like India.” Many believe that Rs 500 per month is super premium pricing and international pricing has not been corrected for the Indian market. Moreover, in terms of delivery mechanism, globally Netflix consumption is higher via fixed broadband lines (and larger screen viewing at home). The OTT explosion in India is happening primarily on the mobile. Thus, long format consumption at high data costs on mobile is a completely different paradigm for India. This might change once 4G rolls out and bandwidth improves, but that is still at least five years away. Moreover, domestic players are also upping their game. Viacom18 is set to launch Voot, and content production house Balaji Telefilms is launching its OTT platform. Guests cannot see images and links in the messages. Please register to forum by clicking Register Here to see images. |
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