The Echo-nomist

Today we’re going to talk about OTT or Over the Top platforms. OTT refers to film and television content provided via a high speed connection instead of a cable or satellite provider. You can watch movies and tv shows on demand, unlike cable tv where they’re pre-scheduled. Examples of these are- Netflix, Amazon Prime video, Hulu, Hotstar/Disney+ etc.

How many times have you heard this sound before starting a movie or a tv show?

OTT platforms are affecting cinema’s and cable tv in a way similar to how e-commerce impacted brick and mortar stores. The market for OTT’s has been growing the past few years but it got a boost due to the pandemic. Many people prefer Netflix over a cable tv subscription.

Let’s try to think from a content consumer point of view, who is busy with office/studies during the day, has a very busy schedule but is a movie buff. What must be going inside his brain?

Here’s my guess, they’d like to go to the cinema to watch the new movie because it’s a BIG screen, with good speakers, reclining chairs and good food!! But the same movie was released on an OTT platform, so they’d consider sitting at home, watching the movie whenever they find time, on the bed, while enjoying a drink and pause it whenever they wish so that they don’t miss a single second. And while watching old movies, cable tv’s have a specified schedule so they can’t browse for a movie to watch. Plus the ad breaks, break the flow of the movie. But on an OTT platform, they can easily browse through tons of movies, choose their favourite and binge through.

Do you see why most people would prefer Over the Top services instead

Now more than ever, with the pandemic and reducing exposure, cinema halls don’t seem like a good idea. And everything coming on dish tv isn’t interesting, so the time comes to choose an OTT platform to reduce your boredom.

Obviously OTT’s need to earn money. For this, they charge subscription fees- it can be paid monthly, yearly etc. depending on the plan you choose. The subscription is worth paying for, for some people. But for some it’s not.

This is where the company has to be smart. They have the tech and tools to attract customers and increase their revenue by increasing the number of paid subs. For this, many platforms resort to producing original content. You must have heard of Netflix/ Amazon/ Hotstar original or now streaming only on Netflix/ Amazon/ Hotstar etc. This is because they produced content that can be exclusively found on the respective streaming platform.

They key is to keep producing such content so that they retain the current subscribers and get new subscribers. However, even this will help only if the movies are successful. There are many measures to check if a movie/ tv show was successful. One of them is award shows.

The Oscars happened recently so let’s talk about that. Netflix went in with 36 nominations! That’s more than any other studio this year. And they won 7 awards!! Second biggest winner was Disney with 5 awards. Amazon Studio’s won two awards too…

This seems to be going well for them, which is probably why they plan on spending more money on original content. In India, they’re expected to spend around ₹1920 crore to create original content. They plan on releasing around 500 new titles. This comes after the services saw a sharp rise in audience during the lockdown. During lockdowns, a lot of movies were being released on OTT’s almost simultaneous to their cinema debut.

Demand for original content will double by 2023 from 2019 levels to more than 3,000 hours per year, according to the report and the share of regional language consumption on OTT platforms will cross 50% of total time spent by 2025.

Live Mint

A good example of this emerging market is Disney+. On March 9th, they had a global subscriber base of over 100 million, over a year and a half after the streaming service launched. On January 2nd, 2021, they had just over 94 million subscribers. While we can not know for sure why this jump in subscribers happened, we can speculate. The Disney+ original WandaVision, was a critically acclaimed tv show and (include sports). The audience had nothing but love and appreciation for the show. Followed by this, Raya and the Last Dragon also became successful (another original). It’s safe to say, people are enjoying their original content. This was before the anticipated tv show Falcon and the Winter Soldier came out. Their success has shocked many!

There are many new OTT platforms like HBO Max. Everyone’s trying to gain subscribers via exclusive content but this content has to be outstanding so that the consumers are compelled to buy it. After some time, the problem we’ll face is how many OTT’s should we subscribe to. What are your thoughts about paying for these subscriptions?