OTT’s Impact on Cinema, TV, and Viewership

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We, humans, have been evolving, from apes to humans and now from traditional viewership to ‘Netflix and Chill’. Naturally, an increase of Over-the-top media services led to OTT’s impact on cinema and TV. 

Brief About OTT

To understand the impact of OTT on cinema and television, we need to know what OTT actually is. 

These are the services that provide streaming media over the internet without using traditional ways (cables and satellites). In 2008, the first OTT platform was introduced in India, named BIGFlix, by Reliance Entertainment. As per KPMG media and entertainment report 2018, by the end of 2023, Indian OTT services are estimated to grow 45% and reach $138 billion. 

OTT, Cinemas, and Television

mpact of OTT on cinema and TV
Source: Brand Equity

The two earliest and most traditional entertainment platforms: cinemas and TV are face-to-face with the new series, movies, and video content platform, OTT. Having said that, the former ones seem to have a slightly black and blue face by growing 20% annually. 

Reasons for OTT having an impact on cinemas and TV

  • Personal viewing and comfort: 

Even with theatres like PVR Director’s Cut and PVR Superplex, comfort once felt at home can not be overlooked. Especially for us millennials, comfort is a priority. Home. Is. Home. And OTT platforms understand that by bypassing the whole complex and traditional broadcasting system.

Waiting in line to watch a movie according to the time scheduled v/s putting on sweatpants and watching it on your laptop or smartphone. By majority, the latter is preferred. 

  • Freemium model: 

OTT plan comparison
Source: The Quint

An average amount of 1,000 INR is spent watching a movie in a theatre, which seems affordable, but weekly or monthly. On the other hand, our TV sets have decreased their huge boxes into lean and even round LED Tv sets, but obviously at the cost of big, big bucks! Even the tiniest TV sets are currently costing about Rs. 20,000.

Whereas, Netflix starts at Rs. 200 (per month) and Amazon gives its Indian users access to Prime Video at R. 1000 annually. Also, we can not overlook the numerous policies and sales. 

As if that wasn’t enough, platforms like TVF (The Viral Fever) and Hotstar provide free access to various content.

Related: Importance of investing in your OTT technology (for media associated businesses)

  • Seamless access: 

As of April 2020, 4.57 billion people were actively using the internet, which means 59% of the world’s population uses the internet. With the increase in accessibility and affordability of the internet, the OTT platforms have the ball in their court. We have access to various content with just a few clicks on our smartphones, whose affordability plays a major role in the success of OTT over cinema.

  • Diversity: 

Movies on OTT platforms
Source: Business of Apps

Thanks to these over-the-top video platforms, we can move ahead of Suryavansham on channel Set Max. 

The OTT media services have been providing us with original content since we know it. Some of the leading global OTT platforms, like Amazon and Netflix, spend Rs. 10-20 million on its original content, per episode. One of the most likable series in India, Mirzapur, spent Rs. 1-2 crores, each episode. 

Along with authenticity, OTT also allows its users to stream content produced by various countries in various languages and subtitles. 

Related: Top 10 movies every entrepreneur should watch on Netflix (2020)

OTT impact on cinemas

As compared to OTT platforms, cinemas have been providing a better, larger, and richer user experience to the viewers. Also, the addictive popcorn and cold drink combos working as a cherry on the cake, a three-floor cake, if you will. Yet, the film industry is expected to face a loss of around 1,500 crores by the end of the year 2020. Is it all due to the lockdown? 

With Hotstar being the leading investor for original content, in the year 2017, of Rs. 40 billion, it is safe to say India is moving towards OTT from cinemas. 

OTT impact on television

More than cinemas, we have spent our time stuck in front of our huge TV sets. Another KPMG report shows a decrease of 12-15 million cable and satellite TV subscribers in Q4 (fourth quarter) of the financial year 2019. Also, the ARPU (Average Revenue per User) did not grow in the first three quarters. 

Related: Downturn for film production, TV, and print media industries 

Conclusion

So is there a war between over-the-top video platforms, cinemas, and television that is being led by OTT? Maybe. But if evolving is a process, that makes this ‘leading-OTT’ one of the phases. Let us know what you think, is this it or can cinemas and television bounce back and be back in their positions. 

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