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Content creators rake in the OTT jackpot

While much has been said about the potential for expansion and earnings for OTT players, the more immediate beneficiaries are content creators.

Published: 13th January 2019 10:10 AM  |   Last Updated: 13th January 2019 10:10 AM   |  A+A-

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For India’s content developers, from established production houses to aspiring youngsters with a script, the rise to prominence of online streaming platforms like Netflix and Amazon have thrown open a world of opportunity. With nearly 32 over-the-top (OTT) platforms vying for the rapidly growing market, industry analysts say that offering original, exclusive content to audiences has become a vital crowd pulling strategy. 

Just last week, one of India’s largest film production houses — Zee Studios — announced the launch of a digital content studio called Zee Studios Originals that will produce a “robust bouquet” of premium, original content for all digital platforms globally. The launch is a telling sign of the potential that the OTT market holds, especially considering that Zee Entertainment has also launched its own OTT platform — ZEE5 — last year. 

While much has been said about the potential for expansion and earnings for OTT players, the more immediate beneficiaries of the multi-thousand crore investments being made in the segment are content creators. “OTT players are changing the nature of filmmaking itself. With satellite prices down, OTT platforms are becoming a good source of alternate revenue,” industry analyst Sreedhar Pillai had told this paper earlier. 

Sources in production houses concur. “You need to look at the amount of money that is being sunk into content by these platforms. The pipeline for 2019 runs into the thousands of crores,” noted an executive with a production house currently negotiating an exclusive online release for one of its productions. For instance, OTT players spent over Rs 2,000 crore in 2017 for securing exclusive content according to the Boston Consulting Group, with another Rs 4,000 crore shelled out by Hotstar for IPL rights for 5 years. This number has only risen over last year, say analysts, with more and more players joining race the OTT market. 

Netflix is said to have set aside Rs 500-600 crore per year for Indian content, and Amazon had announced in 2017 that it would invest Rs 2,200 crore over the next three years. Others like ZEE5, ALTBalaji and Hotstar have continued to sink money into acquiring or producing original content. Industry analysts like KPMG in India’s Girish Menon note that investment will only continue in this space since “exclusive and original content is the best way to get users on your platform”. Amazon Prime Video kicked off 2019 unveiling another original, with Vijay Subramaniam, Director and Head, Content, saying that the year is likely to be heavy on originals and comedy specials. “We are committed to creating original content in Tamil and Telugu too. We will also add three more regional languages in the first half,” Subramaniam had announced. 

Launched just in time to take advantage of the booming segment, Zee Studios Originals has already begun putting things together. “We are working with leading directors and writers to develop and show run our digital slate and will announce the same very soon,” Shariq Patel, CEO, Zee Studios said. Meanwhile, Ashima Avasthi, VP & Head of the new digital production house, sees this as the “correct time” for Zee to have stepped into digital production. “The game has only just begun,” she pointed out. 

Competition fuels investment
The entry of global players like Netflix and Amazon Prime Video that brought with them a plethora of original content, has now compelled Indian players to move beyond just catch-up, syndicated and licensed content, says BCG in its report, adding that Netflix shows Indian users are ready to pay for compelling content 

Rise of the rural internet user
Estimates suggest that by 2020, nearly 50 per cent of internet users in India will be from rural regions and rural internet penetration could grow to as much as 35 per cent. This creates a very healthy environment for OTT to take off in rural India, analysts say, adding that this trend and the resulting demographics will also result in large investments in regional content


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