Kiran Mani: OTT Industry Needs Diverse Economic Models for Growth

Kiran Mani, CEO of Jio Star Digital, emphasized that the OTT industry needs to explore diverse economic models beyond traditional advertising and subscription revenue to ensure long-term sustainability. He shared these insights during a fireside chat with EY India's Ashish Pherwani at the India Digital Summit.

"If you want to justify the economics of saying that I really want to do great storytelling, it has to follow more economic models. We have to ensure that it is sustainable for everyone in the ecosystem to do it," Mani highlighted that relying solely on advertising as the main business model is not enough to create a sustainable OTT ecosystem.

Mani expressed optimism about both advertising and subscription revenue streams, noting the growth potential in India's advertising market fueled by strong economic momentum. He also highlighted that the full potential of the subscription market remains untapped.

To illustrate this, he shared a key statistic: India has a 700-million strong OTT viewership, yet the total number of subscriptions is only around 60 to 70 million at most.

Further, Mani stated, "I actually think one of the major issues with the subscriptions market in India is payment gateways. Because payment gateways in India are built for transactions, not for mandates."

He emphasized the success of Jio Cinema Premium, which gained 20 million subscribers in record time. This swiftly growth was fueled by its disruptive pricing strategy of Rs 29, cutting out middlemen and targeting consumers directly.

"A one-size-fits-all subscription saying that you can eat all the menu items, all the things in the buffet available for an X price, has a limitation," Mani commented.

Drawing from his experience as a former Google executive, Mani described the traditional approach to advertising as "archaic" and too reliant on intuition. He advocated for a data-driven approach to consumer targeting, noting that it is still in its early stages in India.

Furthermore, "As soon as that kicks in, you will realise that you are overspending money in cities and not in the smaller towns of India. So, as far as advertising growth goes, will it see continual growth and continual improvement and continued informed judgement-making? Absolutely," he said.

Mani further highlighted that, similar to subscriptions, a one-size-fits-all approach is ineffective in advertising. He pointed out the limitations of platforms that focus solely on brand advertising.

"I think what we are very excited to offer to our advertisers is that we are now coming back and saying that, yes, we are a mass reach platform and we will always get you the reach. We are also a premium reach platform," he stated.

Jio Star, the entity formed through the merger of Star India and Viacom18, is particularly excited about the fusion of connectivity and creativity in innovative formats, which will unlock endless possibilities, Mani stated.