Nearly 80% of respondents in India open to a hybrid model for OTT, says Brightcove report

MUMBAI: A research report on Indian over the top (OTT) consumers have stated that 35% of respondents are open to a reduced monthly subscription package that serves ads depending on the price, whereas 44% said they would definitely sign up, representing a potential market size of 79% of respondents polled favouring this hybrid option.

Brightcove, a global provider of cloud services for video, has published its annual Asia OTT TV market study. The 2019 Asia OTT Research Report was conducted with research partner YouGov, a global public opinion and data company.

The research report further stated that 60% of ‘Lapsed’ respondents plan to sign-up for OTT services again in the future.

Subscription fatigue is not common for users in India, as content was the primary driver for their subscription to multiple OTT services. From wanting more content options (42%) and satisfying the content needs for an entire family (42%) to content not being available on any single OTT service (42%), content is clearly the primary driver for subscribing to multiple OTT services in India.

Thinking about the future, 25% of Indian respondents want to pay nothing and watch ads as a trade-off to consuming content; 25% elected to pay a lower fee with limited ads; 14% would like to pay a higher fee to be free from ads; and 14% would like an option where they can customise their price and ad packages.

When asked how much respondents would be willing to pay for OTT services, 37% of respondents stated less than $1 per month, 27% would pay $1-$4 per month, and 16% would pay $5-$9 per month.

22% of Indian respondents found two ads as an acceptable advertising load per ad break and 13% were open to three ads per break. Offline downloads (42%), access on mobile (42%), and using less data on mobile (40%) were the top three OTT service features most wanted by Indian consumers.

When asked if respondents would be open to purchasing product as seen on an OTT programme, 67% of respondents were receptive to the idea of shoppable TV.

The study polled 9,000 participants across nine countries in Asia, including 1,000 consumers in India. The survey was designed to uncover insights into consumer preferences towards OTT services, including subscription tiers and motivators driving subscriptions; how much consumers are willing to pay; their tolerance to advertising and ad-supported subscriptions; and openness to a shoppable TV experience. The report is co-sponsored by Evergent, a provider of cloud-based, user lifecycle management solutions for video service providers and SpotX, a global video advertising and monetisation platform.

Brightcove sales director India Janvi Morzaria said, “Our research findings suggest that the online TV consumer in India sees the value in TV content whether they are paying with greater focus and attention, or with their money. Indian consumers do not mind seeing ads as part of their shows, especially if they are getting a deal. 79% of Indian respondents stated that they are open to a hybrid plan of ad-funded SVOD that comes with a reduced price. OTT service providers should take advantage of this preference and make the advertising experience engaging while limiting ad loads per break. Consumers are now willing to watch ads if they have the option to subscribe to a reduced price plan.”

Key findings of the research:

Once You Try, You Will Buy Again: Lapsed OTT users in India and Southeast Asia are more likely to resubscribe to OTT services than Never users. Once users try the service and are familiar with the experience, they are highly likely to return AND are willing to pay a higher subscription fee—especially if their past experience was positive.

There are a myriad of reasons why a user unsubscribes, but the research found that often Lapsed users do remain as advocates for OTT services. Never users are more cautious about trying out new OTT services because they are highly price sensitive towards a service that they have never tried before. In order to effectively target all three types of users, OTT service providers need to roll out three different marketing campaigns. Campaigns targeting Current users should focus on the content library and new service features. Lapsed users will likely be driven by upcoming special, seasonal content promotions, and new service features. To target Never users, focus on anchor or blockbuster content with an enticing trial period or sachet pricing.

One Consumer, Multiple OTT Services To Choose From: The pay-TV model typically involves one service or one contract per consumer or household. It is unheard of to have multiple pay-TV subscriptions per person. But in the OTT world, signing up for multiple OTT services has become a common consumer behaviour.

Consumers in India and Southeast Asia often sign up for multiple OTT services based on content that supplements their primary service. Price can also be a consideration, but it is a secondary consideration. From wanting access to niche content to meeting the programming demands of an entire family, consumers also stated that not all of their content needs are satisfied on just one OTT service. This goes to show that there is a demand for multiple OTT service providers to co-exist in the market. Forty-three percent of respondents said wanting more content options was the top driver for sign ups to multiple services. Only 30% stated that signing up for OTT services was less expensive than a pay-TV service.

On average, 44% of users in India and Southeast Asia said that they might be open to a reduced monthly subscription package that serves ads—depending on the price, whereas 36% said they would definitely sign up, representing a potential market size of 80% of users polled favouring this option.

Many consumers are attracted to OTT subscription services as a means to move away from pay-TV services that include high advertising loads beyond the users’ control, as well as premium subscription rates and long-term contracts. Users in the OTT world understand that there’s a trade-off between watching free content and having advertisers serve ads as part of the value exchange. OTT service providers do not need to limit themselves to one fixed OTT plan. They should experiment with different price plans and offer users the flexibility to choose between ad-free and ad-funded packages. Having diverse pricing options for consumers can help drive market growth—while also providing users with their desired flexibility and control over OTT purchases.

OTT Is Resetting Expectations With Advertising: In advertising, ad dollars follow the eyeballs. For years now, most SVOD OTT service providers have set the expectation that consumers will receive zero ads in exchange for a set price to view content. However, revenue from SVOD alone might not be sustainable in the long term. SVOD providers might benefit by experimenting with a mix of packages that offer limited and no ads as an alternative to a traditional subscription plan, allowing users to choose which price plan suits them.

OTT service providers should also explore and test which ad plans resonate best with their customer base; for instance, serving ads during weekday streaming and limited ads or no ads on the weekends (or vice versa). Consumers, in many Asian markets, are accustomed to ad-free SVOD services, and it’s not surprising that YouGov and Brightcove found ad tolerance to be relatively low, with one or two ads being noted as the acceptable number of ads per ad break on OTT services.

OTT service providers seeking to implement an ad strategy should think about designing an ad experience for viewers that is not off-putting, while also providing innovative ad options for advertisers. Increasingly, ad-supported services are looking to enable users to personalise their ad experience, and are experimenting with capping ad blocks at certain time limits below those of traditional broadcasters and pay-TV services. Those lower ad loads are generally more acceptable to viewers.

User Experience Matters: OTT service providers should focus their efforts on understanding the kind of user experience mobile-centric consumers have come to expect. When asked to choose the features users most wanted in an OTT service, the top five selected were offline download and playback (42%), access on mobile (39%), access on streaming devices such as Apple TV and Android TV (34%), the ability to use less data when accessing the service on mobile (34%), and seamless viewing between devices (31%).

Personalised recommendations were important for 23% of the respondents, indicating that while the recommendation feature enhances the viewing experience, it does not play a primary role in a viewer’s purchase decision.

The top five features are all related to the users’ experience on mobile devices. OTT service providers need to take into account how users watch content on mobile devices, laptops, and tablets—and tailor specific experiences to users who are on the go. That will be even more true as 5G services begin to gain traction in the Asian region, one that is home to some of the most mobile-dense markets in the world. 5G deployment is expected to be driven by consumers’ desire to watch high-quality video—especially live video like sports— on the go, with minimal latency.

OTT Users Are Highly Value Sensitive: Findings from the 2018 OTT research showed that free trials and promotions in India and Southeast Asia were a strong driver for consumers to sign up for OTT services. In 2019, the scenario evolved to the strongest driver being content. Even though there is a willingness to pay for OTT services, price remains a key consideration, along with content. Across the region, Never users are much more price sensitive than Current or Lapsed users.

In 2019, 47% of Never users were only willing to pay less than USD $1 a month for OTT subscriptions, while 25% of Current users were willing to pay USD $5 to $9 per month, and 28% of Lapsed users were willing to pay USD $1 to $4 per month. This indicates that users who have never tried an OTT service are more sensitive to price than Current or Lapsed users—highlighting the need for OTT service operators to offer a low, attractive price point to drive sign ups from Never users.

Addressing The Shopping Gap In An OTT Service and Diversifying revenue streams: Across the region, there is strong interest in the TV to commerce opportunity. On average, 30% of users are open to purchasing products as seen on TV post-program, while 40% might be open to the concept—representing a potential market size of 70%. This is an area that remains largely untapped and has a high potential to be the next revenue opportunity for OTT service providers and advertisers.

For consumers, advertising taps into the power of discovery and awareness. With OTT, ads can be part of the OTT content experience. Combining the two means OTT TV commerce can form part of a dual-prong ad strategy. OTT service providers can serve ads during breaks, embed products within the content, and make those products interactive – providing an option to purchase products during a paused program or after the show ends. This ad strategy can help OTT service providers open up new revenue streams and diversify current ones.

By marrying TV with commerce and adding interactive elements, OTT service providers can explore the measurable impact of branded content—which can give viewers the ability to either seek out more information about the product onscreen or click to buy.

Branded content enables OTT service providers to go beyond native OTT advertising, and offers advertisers another innovative way to market their product and uncover user buying preferences—all with a trackable conversion rate.

We Are In The Age Of Fast Moving Consumer Content (FMCC): TV content has long been a consumer good, but we are now in the era of Fast Moving Consumer Content (FMCC), in which content—including video—is created quickly in order to be rapidly distributed online. Even globally recognised streaming platforms still have to fight for a share of the market. When and how consumers decide to pay for their content— either with money or time—depends on context and the content type in question.

Maximise OTT Potential: Today, TV is evolving from a world of limited options to one of almost unlimited choices. The future of TV will fundamentally be defined by what the viewer wants, which will in turn drive how media companies package, deliver, and monetise their content through OTT services. In order to thrive in this increasingly crowded space, OTT content owners must understand their audience’s preferences and streaming behaviours. Doing so will empower media companies to deliver the ideal user experience—with an attractive, relevant value proposition.

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