KOLKATA: If there's one signal that 2020 strongly gave: it was that consumption of content via streaming, both video and audio, is here to stay. And media and entertainment organisations globally have to pivot around that change in viewing that has taken strong root; that they have to go direct to consumer.
Yes, the doomsayers have for a few years been shouting from the rooftops that the days of TV are numbered, considering the rash of consumers who have cut the cord on cable and satellite TV. Yes, media conglomerates have been pottering around with digital, not fully confident that Netflix’s streaming gambit is the future. But the Covid2019-induced lockdown, which accelerated digital adoption by a few years, not only allowed OTTs to take flight and soar, it also gave linear TV a new lease on life.
For traditional broadcast outfits, cable, satellite and terrestrial transmissions are not the only modes of distribution – wherein they have to go through intermediaries to get their content to viewers – it has become crucial, a question of survival to deliver content via IP directly to viewers who watch what they want to watch and whenever they want to. Streaming is at the forefront of change that they are undergoing.
Global media giants overhaul organisational structure:
The OTT revolution was started by Netflix a decade ago and the platform has led the change for years now. But following the success of the Reed Hastings-led streamer and Amazon Prime Video, large media conglomerates which traditionally offered TV content and owned rich movie libraries are placing big bets on their digital arms. The Walt Disney Co (Disney) is the greatest example of this.
While the media empire was already embracing a new future gradually under its new CEO Bob Chapek, it accelerated the reorientation due to the challenges posed by Covid2019. In October, the company revealed its plan to centralise its media businesses into a single organisation that will be responsible for content distribution, ad sales and Disney+. Kareem Daniel has emerged as the star of the re-organisation as he has been promoted to lead the new media and entertainment distribution group. After the announcement, Chapek also acknowledged that Covid accelerated the rate at which they made this transition, albeit the transition was bound to happen anyway.
Later at its investor day, the entertainment giant shared some glimpses of “tremendous success” achieved through its portfolio of streaming services with 137 million subscribers worldwide. Riding high on this humongous wave, it now expects its streaming services to hit 300–350 million total subscriptions by fiscal 2024.
Moreover, a new service is also in offing, from the international general entertainment content brand Star. Hence, it is clearly inevitable that Disney will put all its money behind streaming over in the next few years.
Warner Bros is another media giant raising the stakes in the digital game, as it recently unveiled its plan to launch its slate of 2021 films on HBO Max on the same day they’re released in US cinemas. It could be seen as a crisis-led response but it indicates how streaming could significantly shorten the theatrical window overall in reaction to rapidly changing consumption habits. Like Disney, WarnerMedia also rejigged its organisational structure this year under new CEO Jason Kilar. He said the changes were meant to help WarnerMedia successfully reach consumers amid accelerated direct-to-consumer demand during the pandemic. While the two Hollywood giants made a buzz recently, other media companies like NBCUniversal, ViacomCBS, Discovery are also experiencing the same wave of reorganisations and betting their futures around streaming video.
Indian media companies rejig organisation too:
Cut to India. Zee Entertainment Enterprises Limited (ZeeL) has been investing highly in its streaming business in the last couple of years. ZeeL CEO and Punit Goenka announced that the company would gather all of its digital assets under a single umbrella, which includes Zee5 (domestic AVOD+SVOD), Zee5 Global, SugarBox and digital publishing to align with its future strategy. As a part of the restructure, Amit Goenka took over as digital businesses and platforms president.
In line with the global overhaul, another major broadcaster Star India (a part of Disney post 21st Century Fox acquisition) is also facing major shake-up at the top executive levels. Star & Disney India president Uday Shankar announced his departure from the organisation and Star Sports CEO Gautam Thakkar also called it quits just a few days after Shankar’s resignation. A separate head of Disney+Hotstar, Sunil Rayan, was roped in after a global search to replace Ajit Mohan, who left to head Facebook India.
Many industry sources indicated that Disney Star India would reduce its spend on TV, and its sports content catalogue and increase its focus on Disney+Hotstar. Expect considerable muscle to come behind Disney+Hotstar as its subscribers makes up 30 per cent (26.8 million subscribers) of the total subscriber base of parent Disney+.
Traditional broadcasters put more money in online content:
Another noticeable trend in 2020, other than the restructuring that has swept through the Indian streaming services, is higher investment in content. Sony Pictures Networks India (SPN) entered the streaming war on the back of its TV content and sports portfolio. With more global and homegrown rivals ramping up their spends, it was not able to make a mark in the race. In mid-2020, SPN relaunched its digital service SonyLIV 2.0 with increased spends on original content and a fresh brand identity. With the rebranding, SonyLIV has emerged as the dark horse in the Indian OTT space, especially due to successful shows like Scam 1992 which have been appreciated widely.
Among other broadcaster-led streaming platforms, Viacom18 also upped its game in premium content with the launch of subscription service Voot Select. Regional broadcasters like Sun TV are also not far behind. The south-based network is planning to invest around Rs 200 crore in its digital venture SunNXT. Not to be outdone, Public broadcaster Doordarshan is also building up its digital portfolio through its YouTube channels.
What do the numbers say?
The reason for everyone moving their guns in one direction could be explained through numbers. The OTT market is expected to grow at a CAGR of 28.6 per cent over the next four years to touch revenues of $2.9 billion, a report from PwC forecasts. Moreover, the pandemic has tuned more consumers to pay for subscription-based services as the segment has registered a 55-60 per cent year-on-year growth in India in 2020. Further, more than half of these new users are likely to continue using the service, according to the annual M&E report by the Boston Consulting Group (BCG). Even the pay-per-view model is also gaining traction as mental barriers for online payment are slowly lifting. To grab a slice of this growing market, all the traditional players are also trying to secure a place for themselves in the consumers’ consideration sets.
For Indian companies, the story may play out differently as compared to their western counterparts. They will be surfing two concurrent waves: the digital one and the traditional linear TV, as they cannot overlook the latter courtesy its potential to grow further.
