Profitable in India

If streaming services are looking at making profits in India, they should adapt to regional realities, start thinking creatively and take a leaf out of what has worked globally, writes?Ajayya Kumar

The Covid-19 induced lockdown might have given a shot in the arm for streaming services, but making substantial profits in the Indian market still remains an elusive dream for most of them. In the financial year 2020, Netflix India recorded a revenue of Rs 924 Crore and managed to eke out a marginal profit of Rs 9 crore. The streaming giant’s overall profits globally for the same year stood at a whopping $2.8 billion.

Disney+Hotstar in India, on the other hand, recorded revenue to the tune of Rs 1629 Crore with losses amounting to Rs 362 crore. Hotstar is currently India’s largest streaming platform with a subscriber base of 300 million.

According to an analysis by Media Partners Asia, India’s online video market is projected to grow at a CAGR of 26 per cent over 2020-25 to reach US$4.5 billion. Another report by Boston Consulting Group notes that the OTT video streaming market alone in India is set to touch US$5 billion by 2023. And for a share of this pie contend not just Netflix, Amazon Prime, and Disney+Hotstar, but around 30 streaming platforms including AltBalaji, Zee5, SonyLiv, MXPlayer, ManoramaMax, Neestream, and so on.

The right revenue model still remains an enigma, thanks to the uniqueness of the Indian market. There are no proven models in the Indian media industry to show that subscription-led growth is if at all possible. Be it the newspapers or entertainment channels, the advertisement brings in the lion’s share of the revenue. While Netflix and Amazon Prime banks entirely on subscriber revenue, Disney+Hotstar which has a base of both paid and unpaid subscribers see its share of ad revenue coming in through the advertisements shown to the unpaid subscribers. While it is yet to be cracked which of these models would ultimately work, there are few things streaming platforms could work on meanwhile.

Explore the unexplored

On June 1, 2021, a review of the Malayalam Movie ‘Joji’, starring Fahadh Fazil and directed by Dileesh Pothan, appeared in The New Yorker magazine. This wasn’t the first time the international magazine reviewed an Indian movie. In fact, on April 15 it had published Richard Brody’s take on?Duvidha, the 1973 film by Mani Kaul. But?Joji?was different. For one it was a regional language movie. And rarely has international media recognised non-Hindi movies, probably with the exception of the works of Satyajit Ray, as Indian movies. To take a review seriously or not is one thing. But to me, it was the beginning of a change; Undeniably the world is starting to take note of Indian regional content, especially from the South. Now, this is a moment to be seized; not only by the language movie industry but also by the OTT players that are looking to turn profitable in the Indian market.

If Joji premiered on Amazon Prime, The Great Indian Kitchen, yet another Malayalam movie that garnered critical acclaim from across the world, made its first appearance on Neestream, a regional OTT platform. The movie later became available on Amazon Prime too.?Nayattu?and?Jagame?Thandhiram?streaming on Netflix, C U Soon,?Kuruthi?and?Karnan?streaming on Amazon Prime and?Netrikann?streaming on Disney+Hotstar are some of the notable movies from regional productions that premiered on international OTT platforms during the pandemic season. Some of the other notable Malayalam films currently streaming include?Aarkkariyam?and?Santhoshathinte?Onnam?Rahasyam, while the Tamil movie industry came together to produce the anthology?Navarasa?now running on Netflix.

Meanwhile what particularly stands out is the glaring absence of any noteworthy productions from the behemoth that is Bollywood. Clearly, it is the regional language movies that have helped the streaming platforms to offer a diverse range of content and cash in on the subscription surge during the pandemic. This is a signboard. The first step towards profitability for OTT platforms is to spot the industries that are nimble, agile, dynamic and quick to adapt to the changing socio-economic circumstances. But the efforts shouldn’t stop at simply sourcing the content. Given the diversity of movie industries in India, streaming platforms are looking at a cornucopia of possibilities.

Let’s start from the South. Given the high literacy rates in the Southern states, OTT platforms are looking at a large market for their English and international content. While The New Yorker might have reviewed Joji this year, what is to be noted is that there already exists an international audience for Malayalam movies and a Malayali audience for international movies, thanks to IFFK and various other film festivals.

Then there is the large Indian diaspora outside the country. According to a report by the United Nations, India has the world’s largest diaspora population — 18 million — living outside the country. A large part of them is Malayalis, Tamils, and Punjabis. In other words, by exploring regional content, streaming platforms would be striking a goldmine.

Offer more diversity, learn from what has worked internationally

Streaming services in India should take a leaf out of what has worked internationally for their global counterparts.

According to news reports, French show?Lupin?streamed on Netflix held the number one spot in countries like Brazil, Argentina, Germany, Italy and Spain and the number two spot in the US. This only means one thing — out there, there seems to be a genuine and ever-increasing demand for premium non-Anglophone content. In this sense, India is a goldmine for streaming services with its linguistic diversity.

But linguistic diversity alone doesn’t serve the purpose. Barring a handful of shows or movies, Indian content has not been able to create much of a ripple in the international arena, owing to the relatively poor quality of the content.

Now here is something to consider. One of the features that have set Netflix a class apart from its competitors globally is its huge investment in original content. Reports suggest that in 2019 about 85% of its new spending was set apart for original content, more than any of its competitors dared to. In India too Netflix has taken a lead by setting up its first global post-production facility in Mumbai.

Producing original content of all hues and (Indian) languages with strict quality checks for a pan-Indian and international audience could work magic for Indian streaming services. Keep experimenting and do not hesitate to disrupt your own revenue/content models if need be. Because now this is a bus that OTT platforms cannot afford to miss.

Rope in the stalwarts

What streaming platforms should further aim is to bring traditional producers into their folds. If the initial focus of OTT platforms was to license existing content, the pandemic has changed their course of action to producing original content and premiering movies. But there is still a large section of producers who are wary of these platforms. These traditional producers have been deciding the ways of the industry for a long time. Many of them are actors and even superstars controlling production, distribution, and the overall dynamics of the industry. Alienating them or even appearing as a threat to their business would in no way bode well for the new-age players.

But if streaming platforms could come up with ways to accommodate them and make a business model around it, it would be a win-win for all. OTT services so far have more or less been working with the new crop of movie makers from the regional cinema and have been able to successfully give shape to new movie aesthetics and language. Roping in the traditional players would be the cherry on top and will help attract a wider segment of the audience. For example, consider streaming services tying up with AMMA, the Association of Malayalam Movie Artists. Such a partnership would mean that now the streaming services would get to enjoy the benefits of the clout wielded by the stalwarts of the industry, while the industry reaps the benefits of being in alliance with platforms that are international, sophisticated, and professional. If streaming services this way get a dip at the massive pool of talent, for artists and technicians it would mean more work even during crisis times like the pandemic and therefore more stability.

Such partnerships would also help to usher in a world where theatres do not view OTT platforms as a threat. It would open up a new world of complementary existence where theatres would still benefit from the rush during the initial release and for sustained viewing and wider reach, there would be the OTTs. And no doubt, the ultimate winner would be the movie itself which would get the grand release it deserves without worrying about ‘running’ days being cut short as new movies come in.

In a nutshell, being creative in the ways it associates with the movie industry and its stakeholders should be the way forward for OTT services.

Experiment with dynamic content

While all that is said about static content, what still remains unchartered territory for streaming services is dynamic content. Exploring live content like music concerts and stand-up comedy will help the OTT players further their reach and bring in a new audience who have been deprived of live shows during the pandemic. It is in fact surprising that such programmes are still largely hosted on video communication platforms like Zoom given that the pandemic has been the perfect opportunity for the Netflixes and Amazon Primes of the world to experiment with it.

If you are further looking to expand your reach, ever thought of news and the popularity of news programmes in India? Sure, there may be regulatory issues for OTT channels to broadcast news as of now. But, learn from the radio. In India, All India Radio holds the right to broadcast news and current affairs programmes, and private broadcasting stations are prohibited from airing the same. But several FM stations have found workarounds in the form of programmes that are satirical takes on current affairs or other fun variations which are essentially not news programmes, but yet manage to pass on the news to the audience. To sum it up, be creative. If OTT platforms could come up with shows similar to that of ‘Last Week Tonight with John Oliver’ it is bound to capture the attention of a huge section of the audience.

There is also a growing audience for art and science content. Although streaming services have covered this to an extent, to make it a more balanced mix would be a welcome move.

All that said and done, ultimately the success and profitability of OTT platforms would depend on how well they can gel with our lifestyles. Movies and theatres succeeded by doing the same, by being our oases of entertainment and our weekly escape from reality. Streaming services should pull all stops to replicate the same and leave no stone unturned in this journey.

The writer is an ethical Investor, start-up mentor, art curator and author