The evolution of media and entertainment industries over the decades is quite staggering. I mean, did we ever imagine that mobile will become the paramount of entertainment content? Or that television broadcasting will soon be dominated by a new wave called streaming?
As a child, I have always watched my parents quarreling over their favorite T.V channel, because back in the time, television was the ultimate source of entertainment and only one person could watch T.V at one time. Fast forward to now, where every individual aka user, has the liberty to consume and stream content anywhere, anytime and of a gazillion variety, from the comfort of their mobile devices. Thanks to the advancement of internet and digital marketing technologies that led to a new era of content streaming and OTT (Over-The-Top) platforms.
Streaming Services: The Rising Star of Media and Entertainment
With the emergence of content streaming services, OTT platforms are vouched to be the future of M&E (Media and Entertainment) industry. The marriage of digital media and personalization has upraised filmed entertainment to become the third largest M&E sector after T.V and print. Nonetheless, the rise of pandemic and social distancing, has further scaled the already booming OTT revenue to new pinnacles.
According to a report by ey.com, by 2020, OTT subscription market will approximate 10% of the total T.V subscription market. By 2025, 750 million smartphone screens will also increase the demand for regional, UGC and short content, creating a short video ecosystem that can create significant employment.
Having said that, although new digital content has eliminated the scarcities of television, by offering easy access and abundant variety of content. The challenge to get more and more user attention is not less of a battle.
Hyper-Personalization to Keep Subscribers Stay Put
With rising disposable incomes, the pattern of content consumption is changing fast in India. The media industry is responding by shifting its focus away from making & serving content for the masses. With the advent of OTT services, subscriber growth and retention have become indicators of success in the market. This leads to a very real need for providers to offer an engaging and tailored experience suited to each user’s individual preference and behavior patterns. The media industry in India is, finally, being personalized.
Personalization focuses on analyzing consumer behavior and applying insights from data to improve the product. As personalization is a key driver for engagement, it will remain the primary focus for OTTs in the near future.
In an ever crowding OTT universe, hyper-personalization coupled with highly engaging content is the key to retain customers. According to a press release by Zinnov, 2020, has been quite propitious for the OTT space. Owing to the various social distancing norms, travel restrictions and closure of leisure spots like theatres, cinemas and more, T.V subscription and OTT apps witnessed strong surge across the globe.
Read Shweta Iyer’s detailed interview here
Media-Tech: The Growth Engine for OTT Platform
Investment in technology is seeing a big push. OTT providers need advanced analytics and AI capabilities to achieve sophisticated requirements. Anticipating customer needs is a precursor to increasing viewing times and keeping users active.
In this section, our experts will disclose how technology has a major role to play in the primary use cases of customer engagement.
-Onboarding: Serving segment-specific content with AI-led hyper-personalization. This is bolstered by behavioral and predictive analytics to understand consumer reaction.
Sharing his approach to customer onboarding, Abhishek (MX Player) says, we have been adopting technology to capture information about the customer’s needs and intentions through multiple sources to extend personalization at scale. For us, technology right now is acting as a catalyst in exploring the power of personalization.
– Retention & Re-engagement: Delivering personalized daily messages (content choices, offers) with the user’s communication preferences in mind can control platform churn.
“One important use case of AI for ZEE5 is around user-generated content, which we will launch in June 2020. This will counter platforms like TikTok, wherein users will be able to create and showcase their self-generated content”, shares Shwetha (Zee5).
New Rollouts: Communicating with users through personalized emails and notifications, driven by usage statistics and segmentation. The same tactics are used to prompt users to write reviews and push offline viewers online – especially with value-added services such as music and games.
“Our goal of content discovery during this phase has not changed, it is just the mediums to reach the consumer that has changed. We are focussing on digital mediums, other OTT platforms, Television news channels, etc.” says Divya Dixit, ALTBalaji.
AI Becomes the Smart Play For OTT Monetization
AI presents an opportunity to create, moderate, and serve real-time personalization at scale. This presents an opportunity for a competitive advantage in the medium term. Areas such as virtual reality, gamification, digital payments, e- healthcare, and digital education represent the scope to enhance user experience and create additional sources of revenue for OTT service providers.
Most OTT players in the Indian market are at nascent stages of their technology journey. While optimism grows with growing numbers, data is being accumulated exponentially and early adopters of AI-led personalization are poised to be rewarded handsomely.
In an interview, Rahul disclosed an experience on how their brand used personalization to drive content monetization. He said, “We partnered with India’s leading medical services app, so that our customers can have a video chat with doctors. We ensured that our audiences are worried about what is happening, aside being entertained. We also realized that people’s devotional needs were unmet because of the lockdown. So, we tied up with 15 major temples and offered live streaming to our customers on ShemarooME.
To know more Read Rahul Mishra’s detailed interview here
As a result in order to achieve growth objectives and dominate the OTT market space, providers will need to move beyond marketing automation and adopt big data and AI to perform personalization at scale.
OTT Advertising Gets More Personal Than Ever
With the sudden drop in OOH advertising, coupled with the reduced expected reach of billboards and print, most marketing spends will now be directed to digital. While the trend was already well established, the existing health risk situation will compound the shift. OTT advertising will probably play a larger role in programmatic media, assisted by the adoption of AI for media buying.
With the average Indian spending 5-6 hours consuming online content every day, the focus will soon move to platform advertising. OTT is typically divided into SVOD (subscription video on demand: ALTBalaji, Netflix) and AVOD (Ad-based video on demand: MX Player). Network backed apps such as ZEE5 are a combination of AVOD and SVOD. While original content is always on SVOD, a lot of broadcast channel content tends to be on an AVOD platform.
Just like the regular TV packages like Tata Sky, SVOD gives consumers access to an entire universe of content on a flat premium model. As per the Digital TV forecast, SVOD revenues are estimated to cross $100 billion in 138 countries by 2025, which is twice the $50 billion record from 2019. SVOD model is currently the most lucrative monetization model and represents the largest segment of OTT market.
AVOD on the other hand is the exact opposite of SVOD. Here, you have access to all the content you want in a freemium model, except for the eventual interruptions of ad pop-ups. But like they say ‘Nothing in life is really free’.
According to Rahul Mishra, “For brands to create segmentation, geographic, and psychographic, OTT is great. Brands that are looking at impact and reach have benefited greatly by partnering with OTT platforms for advertising. Also, OTT platforms can incorporate brand stories very well because they are in the business of storytelling. It is somewhat in the range of content marketing, and that’s another opportunity which OTT players offer many brands, as against broadcast or mass dissemination.”
What Future Holds For OTT Players
As market conditions change rapidly, brand marketers will soon have a choice to make when allocating their marketing budgets with OTT platforms. If the trends in digital marketing over the last decade are anything to go by, the winner will emerge based on a mature technology stack, so that advertising ROI becomes predictable and scalable. While big OTT giants might thrive this fierce competition, it is going to be an uphill climb for small OTT players. To stay at the peak, OTT platforms will have to go beyond views and streaming and create durable strategies that scale quality growth and revenue.
However, it will indeed be fascinating to see how the industry shapes up over the next few quarters!
