Winning the streaming wars in India- Part 2

This is the final part of a two part series on winning the streaming wars in India. For those who missed the first post, take ten minutes out to read it below.

In the last post, I identified the target audience of interest for Indian OTT players, the main barriers to trial for subscription services, and consumption occasion based segmentation of consumers. All this was in aid of deciding the “where to play” for OTT SVoD (subscription based Video on Demand) services. In this concluding part of the article we will look at “how to win” these consumers over to SVoD. For ease of approach we are looking at Premium English services of Disney+Hotstar.

Key consumer triggers to drive subscription

The biggest trial barrier to subscription services is the fact that competing services like YouTube and FTA cable TV offer content for free. Additionally, consumers can see even more content if they are willing to adopt AVoD (advertisement based Video on Demand) services. Of course, there will be compromises like ad interrupted viewing, non-availability of new content, reduced quality of streaming etc. But, in a country where the total number of internet users exceed the population of the G7 countries combined (~600-650 Mn) and more than 50% of the internet growth is expected to come from rural areas, such compromises are irrelevant. 

Therefore, subscription services cannot win in India by playing the price game. There will always be some other platform or service provider who can find a better compromise than you at the price vs services game. What’s needed to be done is to change the paradigm of the game. Instead of trying to find the bottom of the barrel when it comes to price points, steadily INCREASE THE VALUE of your offering and BE KNOWN for it. What does this mean? In a nutshell, provide great quality content for reasonable (read profitable) price points and constantly talk about it (on various marketing channels) so consumers come to associate your brand with a specific form of content. This will be a journey and not an overnight victory. For instance, Netflix has done a great job of this, but in that process they have pigeonholed themselves into a premium English language content provider. In India, explosive growth is going to come from regional language content in the next couple of years. Is Netflix poised to take advantage of this growth? I don’t think so. 

But we digress. Our aim was to see what could be done to drive up premium English language content for Disneyplus Hotstar. With over 300 Mn users in total, Hotstar claims to be India’s largest video platform. Their biggest competition when it comes to acquiring users is YouTube, with over 250 Mn active users. As we saw earlier, OTT experimenters and mainstream viewers alike rely on YouTube for a large chunk of their entertainment needs. Hence it is to YouTube that Hotstar must look first to woo new subscribers. The first step, of course, is for Hotstar Premium to establish TOMA and own the equity for “quality English content” in order to differentiate itself from YouTube and justify the price premium. This can be achieved by moving five key levers:

• Content
• Communications
• Product experience
• Word of mouth
• Pricing

Let’s take a look at each of them. 

Activating key consumer triggers to drive subscription 

CONTENT

The content available in YouTube shows the below characteristics:

• Premium English content in India tends to follow US trends
• Music videos lead the content category by a large margin 
• Gaming content (walkthroughs, reviews, trailers) are just catching up in India
• The ‘entertainment’ category is a mix of short form and long form content and needs to be further analysed by mapping content against occasions 
• The category consumption data for YouTube is as mapped below. This has been done by taking data from top 5000 YouTube channels (from SocialBlade) and mapping it against the respective categories.

Source:  https://medium.com/@agrawal.chemical/youtube-content-consumption-trends-in-india-d6c2433ed615

Content approach for Disneyplus Hotstar 

To establish Hotstar premium as the go-to streaming service for quality English content, we need to ensure Hotstar offerings cover most of the content for top viewed 8-10 content buckets for free/cheap alternatives. We can adopt a two pronged approach for this. 

• Curate top rated english content
• Create original english content 

Note that you can replace English with any regional language as appropriate.

COMMUNICATIONS

Overall awareness for Hotstar SVoD is critical to drive overall brand equity. Hotstar by itself will not have an awareness problem due to its hybrid AVoD plus SVoD model. But it will be interesting to check its SVoD awareness levels especially among females. According to the BCG research quoted below, SVoD generally has low awareness amongst females (only 47% aided awareness of at least 2 SVoD apps). Of course, this is at the universe level. If Hotstar SVoD suffers from a similar level of awareness, perhaps specific female oriented communications and curated content will need to be made. 

Communications would also need a two fold approach. For ease of differentiation, I like to call them ‘connect’ and ‘convince’ legs. Connect comms are mainly made to drive an emotional connection with the consumers and land the value proposition with them (Awareness, Interest, and Desire), whereas convince legs are meant only to drive the benefit and hence, subscriptions (Desire and Action):

Connect leg - Marketing campaigns intended to drive brand awareness among consumers (these can be video led, flighted campaigns)

1. Consumption occasion led insights can be used to create advertisements to drive awareness of how Hotstar Premium has the best English content for all occasions
2. These campaigns should NOT be run in concurrence with other high affinity impact properties like IPL, a new season release of a popular series etc. in order to reduce clutter
3. Input metrics will be REACH and FREQUENCY 
4. Output metrics will be TOMA, brand recall, equity reads improvement ( “has quality English content”, “value for money”)

Convince leg - Always on performance marketing campaigns meant to drive trial with a clear CTA (Call To Action)

1. These are short ads that can run across platforms throughout the year, with clear intent to drive subscription
2. Each of these campaigns need to be run as a/b tests to help optimize for message, creative, placement and targeting
3. Input metric will be target CPA
4. Output metric will be new user subscription 

PRODUCT EXPERIENCE

There is a reason why product managers and UI/UX teams are paid insanely large sums of money by startups (don’t ask me which startups. I don’t know. All my friends who are product managers or designers constantly tell me they are underpaid and overworked). A seamless and intuitive product experience is critical to convince experimenters and traditionalists to subscribe and new subscribers to remain engaged with the platform. A critical point to note about the product experience is that the marketing team should work very closely with the product team to run continuous a/b tests to test hypotheses and optimise UX for undecided users, with the aim being to nudge them to subscribe. 

1. Content recommendations are important - According to a recent OTT trends and future predictions report released by Zemoga, over 70% of YouTube views are driven by content recommendations. This number, I suspect, is applicable for other OTT content providers also. Currently the content recommendation engine for Hotstar is not as seamless as that of Netflix, primarily because unlike Netflix, Hotstar has content in 15 different languages, including English. And most Indians comfortably view content in at least two languages. This makes it very difficult for the AI engine to learn personal preferences and deliver sharp recommendations. 
2. Welcome mats for new subscribers - A new user should be treated just the same as a prospective buyer of a new condominium. The interiors should be laid out just so, and she should be made to feel welcome. The fireplace should be lit, there should be a warm, happy glow in the air, and all the utilities and lighting must be in perfect working order. If she asks for a few adjustments to be made to the balcony or the bathroom, those should be noted and actioned immediately. In fact, the estate agent should be proactively asking her if she wants any changes made. This is the way to ensure a prospective user converts to a confirmed buyer. Similarly, Hotstar needs to ask new subscribers for their content preferences upon first login (note: they do this currently). However, instead of being dryly asked to select a few movie genres and language preferences, new user experience could be gamified to make it more interesting. Imagine asking a new user to participate in a short quiz to identify her latent preferences in movies or shows. Depending on how the user performs, the AI engine could increase or decrease the relative difficulty of the questions and the genre behind the scenes to get an accurate picture of her preferences. A gift (like a week’s extension to her free signup period) could be given to sweeten the deal. Additionally, the user will have the added pleasure of seeing actual movies/shows she likes being recommended to her, instead of the genres she might otherwise have selected to maintain her public image (remember Dangerous Liaisons vs Weekend at Bernie’s? - subtle F.R.I.E.N.D.S. reference for those who didn’t understand)
3. Video previews on scrollover to prevent browser fatigue and automatic preview/screening of next movie/episode after current show ends should be made mandatory. This removes friction from decision making and ensures higher engagement for consumers. Disney+Hotstar currently does not implement this, whereas YouTube and Netflix do.
4. Over time, the recommendations of movies and shows should also be personalized to drive engagement (for instance, the new James Bond movie posters should feature Daniel Craig for Craig fans and Rami Malek for Malek fans)

WORD OF MOUTH

Just like restaurant discovery, over 50% of OTT platform discovery happens via WOM (word of mouth). The best way to ensure WOM is to create a loyal tribe of fans for Disneyplus Hotstar who are more than happy to evangelize its English content services. This helps to achieve two things, in addition to securing new user subscriptions:

1. It creates a ready to tap base for testing/promoting new features or releases
2. It creates a safety net composed of consumers who are willing to forgive errors/omissions from the platform. This is critical if you are planning to run multiple experiments to constantly optimize your campaigns and your platform experience

A strong and popular content base is the keystone of creating a superfan ecosystem. 

Initially, these tribes can be built via campaigns around key tentpole content, by driving referral programmes, merchandizing, celeb meetups, etc. 

This fan base should then be sustained by continuous engagement via preferential treatment – ability to influence new content, create curated playlists on Hotstar premium, early viewing nights before movie releases etc. These fans should be given incentives for driving new subscriptions. Disneyplus Hotstar should be vocal about giving preferential treatment to its fans. The idea is not just to reward those who have converted, but to entice those who haven’t yet done so.

PRICING

This is tricky. The critical goal here will be to reframe the pricing problem (namely, YouTube is free) to a value problem. The assumption is that mainstream consumers are likely to pay if they can be convinced of the value, which is what the previous levers of content, comms, word of mouth and overall product experience is meant to achieve. 

But these levers will take time to move. You cannot establish equity superiority overnight. While product experience is easier to tweak, remember that users take time to get used to a particular UX, and once they do, they tend to stick with it, irrespective of whether it's good or not (baby duck syndrome). They then view changes with deep suspicion. (there’s even been an entertaining timeline created of all the facebook UX change backlashes. Read it, it’s good fun). 

Pricing, however, is easier to change quickly, and often has immediate effects. That makes it a double edged sword, though. Disney+ hotstar definitely will not want to get into a price war with Netflix (superior equity) or Amazon prime (superior Bezos). The way forward would be multiple experiments run on a small scale before scaling up. 

• First off, they should definitely maintain their premium status and so should refrain from straight price cuts from their current price of INR 1499/- month. Indian consumers expect quality english content to be premium priced. There’s nothing to be gained from confusing them by reducing the sticker price drastically
• However, periodic discounts/freebies campaigns for new user acquisition can be tested (with clear CAC targets)
• TVOD format could also be experimented with to drive fence sitters to commit to a subscription (watchout: consumers can easily be led into a TVOD only behaviour, so this format should only be tested in limited quantities, with the success metric being new user acquisition)

Another long term experiment could be to create a super app platform, where content from multiple OTT players can be syndicated - to ensure consumers have a one stop shop for all their English viewing needs, which is a win win for Hotstar and consumers alike (Hotstar gets new subscribers and consumers get a single platform at a reasonable price). 

To recap, the key levers Disneyplus Hotstar can move to acquire new subscribers are content, comms, product experience, word of mouth and pricing. Of these, content is king (cliched statement, I know. Nevertheless it fits the occasion). If they can get the content right, everything else will follow. The general sense in the industry also seems to be the same, with several industry players saying that they expect more and more Indian consumers will turn subscribers IF the OTT players can demonstrate value in the form of original and exclusive content (read story below). 

The OTT space in India is going to heat up in the coming years, and will be an extremely interesting space to watch.