The Post Corona world for OTT

The Malls are closed. Streets are empty. Pubs are shut and so are the Movie halls. We all hope that mankind will triumph over this calamity similar to many others which we have encountered in our evolution. However every calamity leaves its mark on human habits. The Spanish Flu caused increased tensions in India due to implementation of the Rowlatt Act, which extended martial law in the country in 1919. This triggered peaceful protests, and on 13 April British troops fired into an unarmed crowd in Amritsar, killing hundreds of Indian people – a massacre that galvanised the independence movement. The Spanish Flu thus indirectly impacted the Independence movement in India - who ever thought one could lead to other.

The recent clampdowns and home quarantines as a result of Corona Virus is likely to see such an unlikely impact. The whole world turns its attention on Healthcare & impact on Hospitality sector, however the I believe the Virus will have far reaching impact on the Entertainment industry. There will be three key impacts

1. Changing Habits - Remember when Amazon first started pedalling online purchase (actually Flipkart in India). No one believed that one day it would become our primary source of purchase. Slowly but eventually it did happen. Similarly while cutting the chord has been common elsewhere in India largely people have still stuck on to their cable TV- driven by low pricing or simple lethargy. The forced house arrest however will tigger a change in habits. When the entire household is around and everyone has a different preference collective viewing of content in TV is near impossible. This would mean multi-mobile screen content consumption as per individual liking. The habits with #Netflix #Hotstar have been trying to inculcate for a long time will soon become the norm. Discovering the wonders of personal viewing with recommendations and on-demand viewership chord cutting will finally arrive in India. Of course it will need some innovative mindset from OTT players, more on that towards the end.
2. Changing Fortunes - These changing habits will not be restricted to stale content but also to live content. With theatres shutting down and many movie releases delayed the impact on traditional production houses will be huge. Disneys plummeting stock price definitely points to the expected impact. In such a situation some new age players like Apple sitting on tons of cash would find it attractive to buy one of these production houses. The loss of traditional production who believe in (stupidly) investing in 4k & 8K when consumption on mobile screens is still largely SD, will be the gain of smart players in new ecosystems. OTT and large players like DISNEY have always been at loggerheads over content rights, but with change in ownership the equations would change dramatically.

Changing Business Models - If entertainment does move from BIG SCREEN and MASS --> INDIVIDUAL and MY SCREEN, there will be a reshuffle in the ecosystem. The distribution will increasingly become producer to end user which will eliminate a large part of the "Producer--Distributor" ecosystem. Advertising will move to personal ad based on user profiles rather than "Movie sponsorship" deals. This will also mean that money which was distributed across the chain shall start accumulating largely to content owners/ producers.

How can OTT leverage on this change?

The OTT in the Indian market are quite different to slot in one bucket. On a spectrum of original content on one axis and price premium on other - Netflix sits on top right - High original content and high price , Hotstar at the bottom and Amazon somewhere in between. However for its premium content and pricing the monetisation / subscriber base for Netflix does not reflect the premium in revenues. Lets face it Netflix is NOT the iPhone of OTT's in India - NOT YET. They however have a good chance, so do others if Netflix goofs up. The OTT who will benefit the most from this Change cycle of Habits, Fortunes and Business models will be the one looks at some bold moves

1. Mobile Theatre - There are big ticket movies like "Sooryavanshi" which are stuck for releases. It would be prudent to accelerate this change management by buying out the contracts and planning for direct release on Netflix of these movies - perhaps not for subscribers but on a one off basis @ Ticket price of INR 500 only on Mobile devices. This will set the trend of future (which Jio had announced but later fizzled out) - Movie Release directly on Netflix. It needs no subscription, its your mobile theatre - book, watch and go - no commitments. Of course subscribing members may get some discounts and offers. But imagine the potential of making a months subscription from one movie that today you make from offering a bouquet of films on monthly subscription.
2. Thrill, Youth and better be quick - The one clear lesson from the success of Sacred Games / Game of Thrones or Drama's like Criminal Justice or recent success of "Special Ops" points in the direction that any series focussed on Youth & Thriller Genre succeeds. 30-35 min episodes with a season of 10 is the other parameter. Indian audiences have little patience for Blacklist or Outlander kind of ongoing long dramas.
3. Live Interactions blend - I am thoroughly surprised as to how none of the OTT's seem to leverage the BIGGEST strength they have - Interactivity. Unlike content for traditional media, OTT can seek feedback in multiple forms from their audiences. Bandersnatch was a classic example but not built up on (and was perhaps too complicated a play for the average Suressh - Ramesh in India). The interactivity need not be as complicated as Bandersnatch but can be simplified to live polling, live commentary from audiences during sporting events and .... well I am sure we can come up with more creativity :-)

Time is ripe for OTT to emerge from shadows of Traditional media, not only in distribution but also in ownership of end user. The current situation provides a once in a lifetime opportunity to them in India to capitalise on the "Idle remote switching mind" of audiences. Will they grab it or will things be "back to theatre" in 2 months .... Interesting times ahead!