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From Hotstar and Amazon Prime to Zee5, OTT players forging collaborations 

Financial Express , Sep 09, 2019

OTT rivals Zee5 and ALTBalaji recently entered into an alliance to co-create original content that would be made available on both the platforms. In October 2018, South Asian streaming service HOOQ partnered with Hotstar to make a host of Hollywood content available to Hotstar’s paid subscribers. MX Player, another video streaming service, shares content from SonyLIV and Hoichoi, a Bangla OTT service, for free on its ad-led platform. Additionally, Amazon Prime Video is reportedly in talks with Zee5 to add more Hindi and regional language content to its library.

Will partnerships such as these be the norm in the digital entertainment market in India?

Marriage of convenience

The Indian OTT industry has roughly three dozen players clamouring for consumers’ attention, subscription fees and a prized spot in their app consideration set. This makes it paramount for platforms to get user acquisition, content, monetisation and technology right to succeed — an uphill task for most.

Initially, OTT platforms acquired licences of marquee movies to attract consumers, while Indian broadcasters chose the catch-up TV route for their OTT verticals. But they soon realised that an original content line-up is indispensable.

In FY 19, the digital arm of Balaji Telefilms, ALT Digital, incurred a loss of around Rs 114 crore. Shobha Kapoor, MD, Balaji Telefilms, said while announcing the partnership with Zee5 that the tie-up will help Balaji Telefilms turn profitable, “thereby giving us an opportunity to scale up our business ambitions, creating value for all our stakeholders”.

Till March 2019, ALTBalaji, the most affordable OTT platform in India (available at an annual subscription of Rs 300), claimed to have 2.1 crore subscriptions and more than 35 original shows, in its annual report. Meanwhile Zee5, whose subscription fee is more than thrice that of ALTBalaji, reportedly has a user base of 7.46 crore and over 50 original shows. As of July this year, all of ALTBalaji’s shows are streamed on Zee5. While Zee5 lends the distribution muscle, ALTBalaji brings in original shows, adding to the former’s content line-up, without additional investments.

Meanwhile, MX Player has 14 original shows. “We cater to a wide spectrum of audiences; therefore, it makes sense for us to work with a number of partners. SonyLIV and Hoichoi get access to our scale and distribution, while we get access to their varied content,” says Karan Bedi, CEO, MX Player. Similarly, ALTBalaji’s tie up with Dialog Axiata provides ViU app users in Sri Lanka access to original Indian content.

Collaborating, not competing

Zulfikar Khan, MD, HOOQ India, believes most tie-ups are aimed at improving distribution. “The Indian market is diverse, comprising regional language services, broadcaster-led apps, content creators and pure-play OTT services. Such diversity brings in the problem of distribution,” he adds. The partnership with Hotstar allows HOOQ to expand its footprint in India; here, it was previously distributed by telcos Airtel and Vodafone.

Telecom players have emerged as the MSOs of the digital video streaming ecosystem, offering sampler bundles to consumers. As per a FICCI-EY study, over 200 million people accessed digital content through telco data bundles in 2018, generating up to 60% of video viewership volume in 2018. In the same period, telcos spent Rs 350-400 crore acquiring content from OTT players.

Over time, analysts say, independent players will wear out unless they opt for consolidation. “Eventually, funding will dry up for independent OTT players. Some may merge with other players or get acquired. Only the international players, broadcaster-led OTT platforms and content aggregators, like the telcos, will survive the churn,” says Rohit Dokania, senior VP – research, IDFC Securities.