Original content spends by Amazon and Netflix point to the future of content consumption in India

20th Oct 2016
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There are production houses in India that work with satellite channels to broadcast content. Today, they rake in the advertising revenues, and are very profitable. According to Media Partners Asia, a consulting firm, the pay TV segment is valued at $9.4 billion in India, and is expected to grow to $18 billion by 2025.

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However, what one must also take into consideration is the rise of Over-The-Top (OTT) platforms on smart consumption devices, and the original content that they create and publish. This will have an enormous impact on the Indian video content ecosystem. According to research firm IHS Market, internet platforms like Amazon and Netflix spent close to $7.5 billion on making and marketing original content. The research firm says that this was a bigger spend than those of traditional businesses like BBC, HBO and Turner, which have so far ruled the original content industry.

The opportunity

Herein lies the change that Indian production houses can use to their advantage. With the smartphone industry reaching over 300 million Indians per year, it is expected that by 2018, at least 50 million users will look for original content on the internet. Very soon, one may see production houses using YouTube as an original content distribution channel and more discovery happening on the mobile. But this will happen with a twist in markets like India. These platforms will advertise on pay TV to garner customer interest. The only thing missing is an India-based consumer-facing OTT platform; China has the likes of Youku Tudou and there is Hulu in the USA. These are platforms that are disrupting traditional TV and content distribution.

That said, India has startup platforms like FastFilmz, which is focused on distributing vernacular cinema on its app by using a platform that sends high definition video frames as data packets rather than transferring the entire file onto the phone. This cloud platform downloads a movie in ten minutes, and the movie can be watched on an offline mode. It is only a matter of time till they start making or distributing original content for new age content creators.

"The young millennial is moving away from TV as the only mode of consumption, and content is being consumed on the mobile. All these kids are looking at original content, and that's an opportunity," says K A Srinivasan, the co-founder of Amagi Media Labs, who have built an OTT platform for broadcasters.

Even large billion dollar companies like Tata Communications built platforms for broadcasters to deliver high definition content from large sporting events across the world through OTT platforms. "We have to be future-ready. Content distribution is going to be very dynamic, and everyone has to invest in a multi-device strategy," says Julie Woods-Moss, CEO of the NextGen Business at Tata Communications.

For now, Amazon and Netflix have opened the door wide for the distribution of content in the mobile age. There is certainly an opportunity for content creators to start thinking beyond the platforms that tie them down to traditional distribution.

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