‘We want to be at the top of the funnel in the SVoD business’

Over the top (OTT) platform Eros Now is among the few pure-play subscription video on demand (SVoD) players in the Indian market. The Eros Plc owned OTT platform has a set target of reaching 16-18 million paid subscribers in FY19.

Eros Now’s content strategy is to launch close to 100 originals in the next 18 months entailing an investment of $70-75 million. The idea is to drive quality experiences to its subscribers around the world.

It is further expanding its content slate with the launch of Eros Now Quickie. In a move to capture the short format segment, Eros Now will launch over 50 Quickie series set to roll out by 2019, the first two of which recently premiered.

The overall focus of Eros Now will rest on bolstering its presence both in India and abroad. It is also experimenting with AVoD and has formed a partnership with InMobi.

In an interview with TelevisionPost.com’s Ashwin Pinto, Eros Digital COO Ali Hussein shed light on the company’s plans going forward.

Excerpts:

What goals have been set for 2019?

Our aim is to drive quality subscribers. Our guidance for this year is to reach 16-18 million paid subscribers. We are on track to achieve this. We want to be at the top of the funnel in the subscription video on demand (SVoD) business. We want to ensure that we drive high-quality experiences. This means that both India is important along with Non-Resident Indians (NRIs). Eros as a studio business has a legacy of a strong international distribution reach. It is one of Eros’ fortes. We have a great distribution of Eros Now as an app and we are trying to accentuate this over a period of time.

The game plan for 2019 is simple: drive quality experiences to our subscribers around the world, increase our paid subscriber base. We do this by delivering great content along with great user experience to customers. Great content is a combination of what we do with our new films, our originals whether it is our short originals like Quickies which we just launched or the large formats like ‘Smoke’ more digital original films. Early January a lot of action will start happening.

According to you, what is Eros Now’s USP in a cluttered market?

We are the only true Indian SVod based service in the country. ZEE5 and Hotstar have a hybrid model while SonyLIV is advertising driven. This means that we are the only standalone Indian SVoD player in the market. So while the market might be cluttered at large there are not too many people at the top of the pyramid running an SVoD service.

What is interesting from an Indian perspective is that Amazon Prime Video runs on the back of Amazon Prime which is a shopping service. While Netflix does originals, people will not subscribe to it to see a ‘Sacred Games’. They will subscribe to see a ‘Narcos’ or an ‘Orange Is The New Black’ because that is their forte. It is primarily an English driven product today; however, 12 months down the line things may be different.

What is the challenge of building an SVoD service that ensures stickiness?

It is not just about stickiness. Stickiness is important whether the service is SVoD or advertising video on demand (AVoD). The challenge with SVoD is that you ask people to pay. With AVoD it is free. If someone gives you something for free you are more likely to not have any inertia or resistance to consume it. But if you ask someone to pay a fee then suddenly there is a notional stigma that you have to pay. Then the user wonders how to pay. Should I use a credit card, carrier billing, or PayPal?

This is not a need-based service. Consumers are getting cable channels. There are two components. One is that payment is involved. The second component is that we are still fighting a lot of piracy issues. The minute a quality show goes up like ‘Smoke’ it starts to get pirated. The same show is then available to users for free which I am putting behind a paywall. We are fighting these two very intrinsic society related stigmas. Over time with ease of access, payment, discovery these issues will become less of a concern.

Is payment still a huge issue for SVoD?

I don’t that payment is a huge issue in digital. Payment on SVoD becomes a notional shift in terms of the next generation of change that is happening. With cable TV an Indian pays Rs. 250 a month on an average. You don’t think about it notionally because so many channels are available and the set top box is plugged to your TV.

Payment for SVoD is a notional shift in terms of the next generation of change that is going to happen. This is not a payment related issue. It is a habit change that is happening. The good news is that payment wallets like Paytm have become a reality. We just need to ensure that the next generation habit changes.

In 2019, how is Eros Now fortifying its content strategy?

We will launch close to 100 originals in the next 18 months. We will invest $70-75 million in original content. We will launch 50 original IPs in the short form content category. We are lucky that we have access to output from the studio business. It does anywhere between 45-60 film releases in a year. This will form a part of Eros Now’s pipelines. We recently released two films on ErosNow before TV. This shows the strength of the studio business feeding into Eros Now.

We will further strengthen ErosNow with originals, Quickies, and further strengthen it with a lot of the catalogue related updates that we do for the platform. It will be a mix of how we market the brand, create the brand and the personality of the brand with the customer. It is a combination of work we do in the content and technology spaces.

Could you talk about the innovation in content formats that you look at in creating originals for Eros Now?

We are not too hell-bent on the innovation of content formats. The important thing is to look for quality stories between fiction and non-fiction. Even in non- fiction to a certain extent it is about creating a structure for a quality story. In ‘Side Hero’, we did a new format of comedy. Kunal Roy Kapur played his real life in his reel. We also did a take on the boy-girl holiday shows. They might go to Goa for a holiday but we showed that besides Sun, sand, and beaches Goa also has a dark underbelly side to it. Everybody knows that it exists but nobody knows the extent to which it exists. We tried to tell a story of a different part of Goa where Goa was a character in the narrative.

You need to be important and be clear about who the target audience is. You need to be clear about the story you want to tell and also be clear about how you want to position that story. Innovation in content formats will always come about when you do something interesting. We realised that a lot of handheld device based viewing is not the long-form. So what we are doing is that under the umbrella of Quickies we are creating shorter versions of films like ‘Vicky Donor’.

We create a 15-20 minute version of two to three-hour films. This is an interesting innovation within the traditional format of content. We want to see how to tell a story qualitatively in 20 minutes rather than the person having to watch the entire two to three-hour flick if they do not have the time to watch it. We will try interesting things. We are trying to bring high-quality short-form content.

Is regional a big whitespace?

It is a massive opportunity for us. Not a widely known fact is that we have a strong Tamil, Telugu, Malayalam, Marathi, and Bengali film catalogue. So we are already very actively present in the regional space. It does not get talked about that frequently. In 2019 we will launch a few shows that will be in the regional space. The intent is to further consolidate the regional pipeline as we go along. We are an Indian mass entertainment player. We don’t want to be a Bollywood or a Hindi mass entertainment player. The key top five to six languages are an immediate target for us in 2019.

What do you look at before giving a piece of content the go ahead?

It is a combination of three to four things. One is that we look into the data in terms of it speaking to us, not just in terms of what got watched but also what the consumer trigger point was to watch something. So we look into metadata data, viewership data, behaviour patterns, and consumer journeys.

Secondly, we look at box office collection data that we get from various touch points across the country. What were ticket sales, timings? We also look for interesting stories not being said in a straightjacket way but the interesting twists and subplots that can be derived from telling stories. We go through a formal greenlighting process. There is a green lighting committee which is how the story actually gets approved.

Then if required we also get into a piloting exercise. A lot of shows will have pilots which will be research tested to ensure consumer efficacy. This is why unlike other players like Zee we are not in the business of not launching 150-200 originals. We have got the lesser quantum of units being launched but hopefully higher quality and better depth.

What sort of budgets do you work within and what generally sort of timeframe do you give for a show to be made?

A large quality episodic show like ‘Smoke’ or ‘Side Hero’ has a minimum development cycle of 12 months depending on the back and forth. You might not get the script right from the word go. You might not get the screenplay right from the word go. It might require multiple iterations. This process is not finitely defined in a certain sense. It takes six to 12 months for a good quality project. Some of the shorter form stuff is faster three to six months.

Budgets again vary depending on the casting, director, production set up, set shoot, outdoor shoot etc. Unlike television, we do not have a pricing parameter where it necessarily has to be eight on ten lakh rupees an episode. The story, the cast based on the story, the production timelines determine the costing. Now we go from Quickies at the bottom end of the spectrum right up to the top end of the spectrum.

Which are the production houses that you work with and do you retain IP?

In terms of IP retention, I cannot comment on that as it is a business secret. With production houses, we work with a range of companies. We don’t necessarily belong to the TV funnel and so we have got a lot of working relationships with a lot of film-related writers. We actually created our own writer’s room in-house. We have also worked with a lot of film directors. Our sensibility is there. With Quickies we have opened our funnel out to a lot of digital content producers. Historically television producers did not work with Eros because we were in the business of creating movies. But we are trying to increase our funnel by working with a larger set of producers.

What has been the progress on adding new pay subscribers?

We are at 13 million. It will hopefully be close to 18 million by March 2019. Then it is a journey ahead. India will have a higher skew when it comes to subscriber count but when you look at a revenue play it will be evener. ARPU (Average revenue per user) abroad are higher as they earn in dollars and pounds.

What ARPUs do you expect from India and abroad?

The India ARPU is $4-5 annually. Our international ARPUs vary in the range of $30-35. I don’t think that ARPUs will differ drastically. The subscribers will go up both in India and abroad. ARPUs might alter and improve a little bit in India. The improvement will be better compared to what it was a few years down the line. The international ARPUs are already in a good place.

What are the key markets for Eros Now in India and abroad?

It is actually a dual answer. We get a significant amount of consumption beyond the top six cities. A lot of the Hindi speaking belts are important. When we launch Tamil, Malayalam content consumption in those markets rises even in Dubai. We also get a good amount of viewership from Mumbai, Delhi, Bangalore because the Internet coverage and population in these three markets are very good.

Internationally, the US is the number one market. The UK is the number two market. The number three market depends on the kind of content being launched. GCC is a very good market. Southeast Asia is a very good market. South Africa and East Africa, in general, are also very good markets.

Are you mainly looking at NRIs in foreign markets or also the mainline audience?

The first phase is to tap into the non-resident South Asians. Bangladeshis, Pakistanis, Sri Lankans watch our programming. We are doing co-productions in China and we will get ancillary audiences from that. The first phase is to consolidate on the South Asian audience around the world.

Could you talk about your telco partnerships and what they look for?

The video is a large part of data consumption on the telco pipe. Video providers like Eros Now become an important collaborator with telcos in general. We are very intrinsically tied up with all the telcos in India whether it is Idea, Vodafone, Jio, Airtel and we are telco neutral. A lot of other companies in the video space have certain allegiances or alliances. We are fairly telco neutral which is great from a customer standpoint. Internationally also we are very well distributed whether it is Apple, Roku, Freesat, Xiaomi is something that we are prolific in.

Are you looking to experiment with AVoD in some manner?

We are looking at it as we have a lot of music videos, trailers on the platform which is free. We have a partnership with InMobi and we will experiment with ad formats. We will work with brands, advertisers to create an interesting experience. Trailers and music videos are not behind the paywall. We will work with advertisers on short-form content. We will also involve them later on with long-form movie-related programming as well. We have not launched anything so far. We are doing R&D testing on the ad formats that we believe will work from a consumer standpoint and also from an advertiser standpoint.

There is talk about TV versus OTT. Is India ‘an and’ market or ‘an or’ market?

Right now India is ‘an and’ market. But over time it will become ‘an or’ market. Eventually, it is about customer choices. Today there is a large enough audience base of men, women above the age of 30, 35 that likes watching television. Eventually as that base grows older and the younger base goes into the middle belt they will be looking at ways where they can watch OTT better that they are able to watch cable television because the kind of content is different, it is not linear, it is on demand, habit forms would have changed, kinds of content would have changed. That is why I said that today India is ‘an and’ market but in the future, it will be an or market. The TV also has headroom to grow for now along with OTT.

When TV channels did good programming ratings rose. When they did not ratings fell. But when ratings fell this year I don’t think that the audience migrated to OTT. Will they migrate next year? I am sure that some trickle will happen.

When you look at content consumption patterns on OTT what is working?

There is a lot of hype around originals. A lot of the classic programming meaning studio programming still forms around 80% of overall Netflix viewership. A lot of these originals get marketed quite extensively. We also marketed our originals like ‘Side Hero’ extensively. But movies still form a large part of consumption. People tend to forget that. Content films that focus more on story than on stars drive consumption.

You may be interested