With an estimated 20-25 million paying subscribers of Disney+ Hotstar expected to migrate to Reliance Industries-backed JioCinema to watch the Indian Premier League (IPL) cricket tournament for free, the country’s already small $668-million subscription-video-on-demand (SVOD) streaming market might get dented further, even as price-sensitive Indian users were getting used to paying for content.
Reliance-backed Viacom18, which bagged the digital streaming rights of the marquee cricket property for the 2023-27 cycle beating Disney+ Hotstar, will stream the two-month-long tournament starting on March 31 for free. On Disney+ Hotstar, subscribers had to pay Rs 1,499 for an annual subscription that included the IPL.
“If IPL, the most expensive property, is being offered for free, it’s a further boost to the AVOD (advertising-based video-on-demand) market and a negative impact for the SVOD market because customers were just getting used to shelling out an annual Rs 3,000-4,000 for content. As streaming ARPUs are unlikely to go up anytime soon, OTT players that were poised for 25-30 per cent SVOD revenue growth will probably see 10-15 per cent growth,” says Karan Taurani, Senior Vice President of Elara Capital.
Elara Capital pegs the Indian video OTT market’s total revenue at $1.7 billion (as of April 2022), of which SVOD accounts for $668 million (37 per cent) and AVOD contributes $1.1 billion (63 per cent). India has around 49 million paying (SVOD) audiences, per a report by media consultancy firm Ormax Media. Analysts estimate that JioCinema’s free IPL streaming is likely to attract around 50 per cent of the total SVOD viewership to its platform.
Uday Sodhi, former head of SonyLIV and Founding Partner of Kurate Digital Consulting, says JioCinema’s immediate priority is to get on as many smartphone screens as possible, and offering the IPL for free is their way of establishing app distribution. “At some point, JioCinema will move to a subscription model. This is exactly what Hotstar did when they started streaming IPL. If that means the total number of SVOD users will drop or will have a short-term impact, it is okay. They will come back later when it becomes a paid service.”
A study by Accenture released in January showed that a whopping 77 per cent consumers in India said they are overwhelmed by the number of streaming services to choose from, while 41 per cent unsubscribed from at least one of the Top 5 streaming VOD services in the preceding 12 months. And 42 per cent said that they plan to cut one or more in the next 12 months.
Besides, the Ormax study showed that OTT platforms must rely on smaller towns and cities for the next phase of subscriber growth, as metros have reached more than 79 per cent OTT penetration. “The average number of OTT subscriptions has remained static at 2.4 per paying user. It suggests that subscription growth will come from more people paying for subscriptions, than the same people paying for more subscriptions,” Ormax Founder and CEO Shailesh Kapoor had said about the findings.
But affordability is a challenge in non-metros, as telecom ARPUs are rising. “They have cable TV and free AVOD content. Broadband is expensive and telecom ARPUs are inching up. Viewers in the non-metros will not pay for multiple OTT platforms in a big way. There will be a rejig in the growth numbers from the Tier II and III markets,” says Taurani.
@SaysVidya