It is speculated that movie production and distribution company Yash Raj Films (YRF) is likely to launch an over the top (OTT) platform, and experts pointed out the pros and cons of entering the already crowded streaming space in India.
With around 40 streaming platforms already competing to grab the attention of Indian viewers, Utkarsh Sinha, Managing Director, Bexley advisors said that “the OTT space is getting increasingly crowded, and anyone entering now is coming to the party late.”
“While YRF has a formidable library and content slate, the question is, will consumers vote for the offering with the shrinking dollars in their overcrowded consumer entertainment wallet,” added Sinha.
According to a report by media analytics and consulting firm Ormax Media, there are 4.07 crore paying or subscription video-on-demand audiences. And at 25 percent penetration, there is still a huge potential to grow the OTT subscription market, especially outside the top cities.
While there is potential for a new player to grow in India’s streaming space, the differentiator will be content.
Vivek Menon, co-founder at N V Capital, said that no one understands content strategy as good as Aditya Chopra (CEO, YRF). “However, they are used to making long form theatrical content, in this case they would need to adapt to a different set of audience with discerning tastes and they would need to tweak their content accordingly, for which they might have surely done their homework.”
Founded by veteran filmmaker Yash Chopra in 1970, YRF so far has released as many as 78 films.
Menon said that YRF is a pioneer and leader in the long form content space, however, experts say that OTT’s prefer spending on web series than films.
Karan Taurani, Senior Vice-President, Elara Capital in an earlier interview to Moneycontrol had explained, “An average large budget and big-starrer film acquired by an OTT would cost around Rs 120 crore, while the average cost of a web series episode is Rs 1.5 crore to 2 crore. This means that in a budget of a large-scale movie, OTT platforms can shoot and release two to three seasons of a web series (assuming 10 episodes every season) including a celebrity star cast, which also has more sticky audience (binge watched by people) compared to movies, which are usually watched only once.”
This is why Sinha said that for any OTT offering, the ability to have diversified content is key. “Unless you have the cache of a studio like HBO with their deep content quality as a differentiation, the way to attract Day-Zero consumers is through variety. And the way to keep them is with a refreshing content slate. For anyone, doing both today will be challenging, but YRF will have a better shot at it than most others,” he said.
He added that content is king and it would be more valuable for any new OTT entrant to do a hyper-focus on depth and quality of content.
According to Media Partners Asia (MPA), a provider of research, advisory and consulting services, OTT platforms including Disney+Hotstar, Amazon Prime Video and Netflix that have a combined 75 percent share of subscription video on demand (SVoD) market will continue to invest heavily to build their local sate of originals, with more depth and diversity expected in future.
It further said that to up their game, OTTs in India spend 30 percent of their content investments on acquiring local originals, and this share will increase to 40-45 percent in coming years.
While there are many aspects that YRF will have to focus on when they foray in the streaming space, Menon said that he is confident about the company’s content manufacturing and distribution segment.
“They have been successfully creating content for decades now. Second, they also have the relationship capital with all the major OTT players to build this business. Third, OTT content is a natural kind of forward extension and integration to their existing business and it was just a question of time as to when they were going to enter that vertical,” said Menon.