OTT video platforms could usher in cord-cutting sooner than expected: Eros Now-KPMG report

MUMBAI: While over the top (OTT) platforms are considered serious threat for traditional television, a recent report has suggested that the over the top (OTT) video could usher in cord-cutting sooner than expected.

According to the joint report by Eros Now and KPMG in India on India’s OTT market, 38% of the respondents could consider cord-cutting in the future as they responded to their entertainment needs being fully met online.

The ubiquitous access of online videos along with the diversity of content available could be the primary drivers behind such assertions made by the respondents, the report stated.

It further stated that the intent to cut the cord may not actually translate into doing so eventually. The fact that more than a third of the respondents are willing to actively consider it outlines the rapid growth that digital video has made, and the threat that traditional video distribution could face in the long run, the report added.

For the purpose of this report, a survey was commissioned across 1,458 OTT users in 16 cities of India, to ascertain the usage of OTT platforms by consumers. These included Delhi, Mumbai, Kolkata, Bengaluru, Hyderabad, Pune, Ahmedabad, Jaipur, Ludhiana, Panipat, Nagpur, Madurai, Coimbatore, Bhubaneshwar, Jamshedpur, and Patna.

The survey was based on a questionnaire which was conducted in person at each of the centres. The questionnaire was designed to gain insights around the OTT usage behaviour of the respondents across various key aspects.

The report highlighted that the masses are beginning to recognise that online video can be a primary means to meet their entertainment needs. More than 80% of the respondents across different city tiers and income brackets were able to fulfill their entertainment needs completely through online videos.

The content category preferences, when analysed for the potential cord-cutters and non-cord cutters revealed that for the cord-cutters, movies and television content (catch up) were of primary importance, with the preference of originals being surprisingly lower than the non-cord cutters.

This outlines the fact that the potential cord-cutters are probably not digital natives, but consumers who could look to online video for the ease it provides, while still remaining true to their traditional video choices.

However, the lower preference of online originals amongst cord-cutters could also be a function of the relatively low supply that originals suffer from currently in the market, the report said.

As per the report, 87% of online video users in India consume their content on mobile phones and spend an average time of about 70 minutes per day on OTT platforms.

The report projects that India’s online video subscriber base is projected to touch 500 million by FY2023 making it the second-biggest market in the world only after China. The report was unveiled at FICCI FAST TRACK INDIA 2019 in Mumbai.

One of the key findings of the report is that online video platforms are truly going mass in terms of frequency and duration of consumption. While the customer sets are fairly heterogeneous, there is a trend of homogeneity that was observed in terms of consumption frequency and duration across consumer categories.

Another key find is that Indians continue to love their movies and movie-related content. Original content is also emerging in a big way with a reasonable preference by respondents as compared to the supply of original content on platforms currently.

The report pointed out that 30% of the respondents prefer watching movies on OTT platforms, with a further 20% Movie related content such as ‘Music Videos’.

Despite the short supply of original content, 10% of respondents prefer watching ‘Originals’ on OTT platforms. Given the current supply of originals at <1% of overall content, this is a significant preference.

Long-form content is gaining traction, while short-form content continues to remain relevant, especially to cater to the millennial audience, the report stated.

30% of average session duration >45 minutes, signifying the growing importance of long-form content. However, short-form content also remains highly relevant, with 25-30% respondents across age groups having single session durations of <20 minutes.

According to the report, the preference for content consumption is significant in the native languages across large parts of the country, with south India observed to be the most loyal to their native tongue.

30% of respondents prefer watching content in languages other than Hindi and English. Native language preference highest in South India with Tamil, Telugu, Kannada, and Malayalam the most preferred languages in the respective centres.

The mobile-first nature of online video in India makes it truly ‘Anytime, Anywhere’ phenomenon with 87% of the respondents consuming content on their mobile phones. Although small, an interesting 5% of respondents consumed content on their Internet-enabled smart TVs, which could be an important growth avenue in the future.

29% of the respondents watched videos online even during office hours, outlining the ‘Anytime, Anywhere’ nature of the online video.

The report stated that telecom platforms have emerged as a key distribution medium for OTT platforms, with a reasonable number of respondents accessing content through the telco apps on their phones. 3 out of 10 respondents consume OTT content through telco platforms, outlining the importance of this distribution medium.

Viewers are increasingly discerning in terms of the quality of content when it comes to choosing or uninstalling OTT platforms.

87% of the respondents install an app considering the quality of content. Freshness and uniqueness of content the key determining factors for installation and uninstallation of apps, as well as respondents subscribing to platforms.

KPMG in India partner, head media and entertainment Girish Menon said, “The online video consumer in India has evolved in a significant way in the last couple of years. With consumption now going mass and viewers spending close to 8.5 hours a week on online video, we see a homogenous pattern of consumption emerging cutting across age groups, income levels, and professions. Our report also touches upon the future of this consumption evolution, and how online video could potentially disrupt traditional distribution in the coming years. This represents a large opportunity for platforms to tap into the ever-expanding universe of digitally connected Indians.”

Eros Digital CEO Rishika Lulla Singh said, “India is one of the fastest-growing entertainment and media market globally and is expected to keep that momentum. As data and digital infrastructure has become exceedingly accessible even in small cities of India, the market for OTT has widened enormously. At Eros Now, we strive to constantly engage the existing consumers and expand our reach by offering new and innovative services.”

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