Spreading the net on Indian TV

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Shriya Agrawal, 25, a postgraduate student in Varanasi, is a huge television fan and often spends five to six hours a day watching shows.

She enjoys popular Indian programmes such as the Hindi drama serial Ye Hai Mohabbatein and the sitcom Bhabi Ji Ghar Par Hai.

Ms Agrawal mainly watches content on television, but sometimes goes online to view programmes, via the platforms of television networks where she can watch the shows for free.

“Basically it depends on the internet speed,” she says. “If I’m getting good speed and if I have missed a show that I have not been able to record or I did not know about, then I watch it online.”

India is lagging behind developed markets when it comes to online video viewership, amid challenges including poor internet infrastructure and the cost of data and subscription-based services, experts say. But the consumption of programmes online is rapidly growing, albeit from relatively low levels, and television networks are readying themselves for a future boom in the industry, as the number of smartphone and internet users continues to rise rapidly.

The market for online video advertising in India was US$71 million last year and is set to surge to $846m by 2020, according to Statista, a statistics website.

Star India, one of the biggest television networks in India, has launched its online video platform called Hotstar, where content is free to view. Other major companies including Zee and Eros have also launched their own platforms. Sony LIV charges 150 rupees (Dh8) a month for a subscription to its sports, music and original exclusive content and it has more than 5 million app downloads, according to Vidooly, a video marketing and analytics firm in India.

“As content consumption on the internet is shifting more towards video everyday, the rapid increase in the number of internet connections is set to give a welcome boost to the online video industry in the country,” says Subrat Kar, the co-founder and chief executive of Vidooly.

“However, quality of the connections is still a burning issue in India. Once that gets sorted out, the online players here can expect a much-needed shot in the arm. Until then, they should concentrate on building a solid content library with more focus on local programming.”

Frank D’Souza, a partner and media and entertainment industry expert at PwC India, says that as far as India is concerned, TV still remains the most dominant medium for consumption of content.

And there is an expectation that the consumption of content through TV will continue to rise from 175 million TV households in India to 200 million in about three to four years.

But for that to happen, the telecoms infrastructure, which is really the backbone as far as [online] consumption is concerned, is still nascent in India.

“The kind of bandwidth speed you can get in India is nowhere comparable to what you see in markets where the [online] platforms have reached the kind of development that they have. There is a drastic need for improvement in the infrastructure. Also, pricing for consumption over TV as against digital plays a role on how the relative segments are going to grow,” Mr D’Souza says.

Cable and satellite television charges average at about 150 rupees a month compared to Netflix, which has prices starting from 500 rupees a month. Then there are bandwidth charges for digital consumption on top of this.

Rajiv Vaidya, the chief executive of Spuul, a platform which offers Bollywood movies in India and globally, agrees that there are a number of challenges. It has about 12 million users and is “operationally generating cash”, he says.

Mr Vaidya explains that the company has introduced a number of measures to try to overcome these obstacles.

For example, Spuul, which charges 150 rupees a month, offers a “tiny” sized download option as a solution to slow download speeds. It also offers an offline viewing option.

“Watching by appointment is no longer going to be the norm in the coming years,” he says. “More and more players are coming in. I think constant changes are happening.”

Other challenges include online payment because many Indians do not have debit cards or are uncomfortable using them online, as well as a widespread problem of piracy in India, according to Vidooly.

The content that digital platforms offer is critical.

Netflix has not fared well in India so far because of the price and because it has very limited Indian content and a fraction of the number of shows that it offers elsewhere in the world, says Ram Veerapaneni, the managing director of Whacked Out, based in Hyderabad, which has a multichannel network on YouTube and has distributed more than 4,000 films and hundreds of thousands of TV shows and other content.

“The price of Netflix in India is unviable,” he says. “It has not taken off. They don’t have any major tie-ups with the Indian studios and content owners.

Mr Veerapaneni says that online-only programmes and films are “very high and the recovery is not matching” and he believes “Indian audience are not ready for it yet”.

But the company has received a number of queries from advertisers that are interested in sponsoring online content.

“The good news is that they are inclined towards internet-only content, which could give us the opportunity to explore future investments into that space of content creation.”

Nevertheless, companies in India are producing more programmes that are only launched online.

“Even the major film producers are getting into content which they want to distribute only over the web,” says PwC India’s Mr D’Souza. “People do recognise that there has to be a different kind of content. The age group that they’re targeting is different and they’re specifically creating content for what they expect to be the target audience for digital consumption.”

But he adds that “they haven’t been [that successful], primarily on account that this sector is still small – nothing along those lines of theatrical releases just yet.”

Some of the online shows are quite risqué, such as Confessions – It's Complicated, a web-only series launched by FremantleMedia India last month.

This show is sponsored by Myntra, an e-commerce clothing website. “Web-only content is largely designed to appeal to a young digital audience and this is reflected in the advertisers that it attracts,” Mr D’Souza says.

“The strategy is driven by the target segment in terms of who is really consuming digital content. The big spenders, who would be the automobile segment, banking institutions or consumer goods, are sticking to the traditional mediums. But if you look at the e-commerce players, such as Myntra or Flipkart, they would be the ones who would typically get on to advertising on a digital platform because their customers tend to be in the same bracket.”

But a lot needs to change before Indians flock online to watch content.

Ravikant Banka, who is the managing director of EggFirst, an ad agency in Mumbai, explains that he personally views programmes on television and has “not graduated to Hotstar or Netflix or any of those and I imagine most people haven’t either in India”.

A “combination of slow speeds and, cost” deter him from watching online, he says.

“While internet in India is getting better by the day, it does continue to pose serious problems.”


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