Streaming Providers Employ TV Approaches to Expand

The TVization of over-the-top (OTT) streaming services appears to be complete, with the introduction of premium subscription plans that will also include commercials, the weekly drop of web series episodes, and an increase in family-friendly material on their platforms. Amazon stated in a blog post this week that Prime Video movies and television series will have restricted ads in India beginning in 2025. "Compared to other streaming TV providers and linear TV, we want to have noticeably less advertisements. Additionally, we will provide a brand-new ad-free option, the cost of which will be disclosed later," it said. 

The free, ad-supported video-on-demand service miniTV was introduced by Amazon in 2021 and was recently relaunched as Amazon MX Player following the acquisition of MX Player from Times Internet. Amazon also operates a subscription service called Prime Video. In response to HT's inquiries about its intentions and the difficulties with streaming in India, Prime Video declined to comment.

Until now, streaming has been either SVoD (subscription video-on-demand) or AVoD (advertising video-on-demand), according to Keerat Grewal, head of business development (streaming, TV & brands) at Ormax Media. Grewal stated, "The new category being introduced by Amazon (paid service with advertisements) has not yet been defined."

However, Amazon's justification makes sense. According to Ormax's August analysis on the OTT audience universe, the majority of Indian viewers are not inclined to pay to access content. Amazon's revelation supports a study by Ormax that found that although there are 547 million OTT users in India, the number of active paid subscriptions has stayed at 100 million for the past two years. The AVoD audience, who consume free content in small towns and rural India, is the only factor driving the rise of the OTT audience universe. "OTT platforms will depend more on advertising because subscription revenue is not increasing," Grewal stated.

However, because platforms will be careful about how they play out the advertisements while keeping user experience in mind, streaming may not exactly replicate TV. Grewal continued, "Since digital media has learned from YouTube, their ad breaks won't be as disruptive as TV."

According to Anuj Gandhi, a former TV industry executive who is prepared to launch his start-up in the streaming area, there has also been a subtle alteration in the way that information is streamed. "The edginess is off if you look past the political disputes surrounding the topic. Considering that family audiences might be seeing the shows on internet-enabled smart TVs (or linked TVs) at home, it is cleaner entertainment," he noted.

In addition to the 30–40 million smart TV homes already in India, a million CTV households are being added every quarter, according to Jai Lala, CEO of media agency Zenith India. "As CTVs become more affordable, the growth is occurring in both the upper and lower income groups," he stated.

Increasing the viewership is another goal of the content change in order to increase advertising. "To be profitable, OTTs require ad revenue. "With the intense competition to get the right movies and shows, subscription revenue isn't enough to cover their content costs," Lala stated.

In contrast to other international markets, Indian media has always relied heavily on advertising, thus viewers are accustomed to seeing advertisements. According to Lala, 70% of TV's revenue comes from advertising, even though the network also gets money via cable and DTH subscriptions. Additionally, he said, the cost of advertising to reach customers is among the lowest in the world.

It is clear that more firms are considering digital media for advertising because the growth rate of digital ads, at 25%, is higher than that of TV ads, which is at 8%. "OTT brands should take advantage of this revenue," Lala stated.

However, YouTube and Meta, which attract the majority of digital advertising, pose a serious threat to OTTs. Additionally, they will contend with quick-commerce companies like Zepto and Blinkit that are drawing in more advertising as well as more established e-commerce sites like Amazon, Flipkart, and Myntra.

According to experts, over-the-top (OTT) services will likely market themselves as appointment viewing platforms, in contrast to YouTube, which is primarily used for surfing. Or perhaps mention increased stickiness and engagement for their content to attract advertising.

The lack of a standard measurement for digital media, such as BARC for TV, is the larger obstacle. Since digital media platforms are aware of exactly who is viewing what and for how long, the entire universe serves as the sample size. However, they typically only share what works for them," Gandhi observed. "Platforms will have to disclose a lot more information than they are willing to share in order to develop a common measurement," Grewal continued.