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Nov, 2020     

Video Killing The Audio Star?

Paid users contributed USD 43 Million in revenue during August 2020 alone


1. Nikhil says he has been seeing a continuous growth for OTT Video in terms of the paid user base

# of paid accounts, Prime vs Industry growth, Apr – Aug 2020

Note: Data and Analysis excluding YouTube

Highlights:

Pre- Lockdown, an Indian user used to spend roughly ~ INR 1200 per month on offline entertainment, but this scenario has changed now with user directing almost 30-40% of his offline expenses to online platforms and out of the online expenses, a user spends ~ INR 175 per month on OTT Video

What is working for players?

Hotstar

  • Disney Launch enabled users to come to the platform to stream international content from Disney, Marvel, Pixar & Star Wars. Adding 200+ movies, 100+ shows & 30+ originals to the list.

Netflix

  • New releases of both originals & licensed content before & during the lockdown
  • Improvement in product ( UI & Recommendations, Hindi interface) & pricing ( mobile-only plan @ INR 199 per month ) have propelled growth

Prime Video

  • Increase in last couple of months owing to Prime day sale and Digital releases of mainstream movies as well higher vernacular content streaming

Zee5

  • Have relied heavily on partnerships with OEM.
  • Partnered with smart TV & phone manufacturers ( First OTT player to offer UPI payments on Samsung smart TVs)
  • Times & Airtel to offer free subscriptions to consumers

Voot

  • New launch of Voot Select attracted users to get access to originals and live content
  • Able to grow and reach to 1Mn users in just 5 months

2.These paid users contributed USD 43 Million in revenue during August 2020 alone

Subscription Revenue, OTT Video industry, Aug’20

Reasons for increase in paid users:

New Launches in Video and shift to online

  • Users shifting spend to online
  • Launch of Hotstar+Disney
  • Launch of Voot Select
  • Rise in Smart TV users

Bundling Plans

  • Telecom Post Paid Users – Cross platforms and Telecom bundlings
  • Broadband bundling – Free Prime Video subscriptions for JioFibre users

Higher users opting for annual packs

  • Most of the users are moving towards annual packs compared to monthly ones , even in T2+ cities

3. However on the OTT audio side, churn of users is supplanting the new user addition

New Paid Users vs Churn, Top 6 players – OTT Audio

Note: Excluding YouTube and some smaller players

Highlights:

  • On the back of Diverse monthly packs there was more acceptance for the monthly packs compared to annual packs
  • 65% of the respondents (N=200) we interacted with, don’t mind Ads on the platform and are okay with not having unlimited downloads for offline streaming.
  • A lot of them feel YouTube, a free platform, is a better alternative

However, the OTT audio industry has a different story altogether. The industry is facing a stagnated growth in terms of new subscribers mostly due to the lockdown and work from home led model which has cut down travel time for the users during which they would mostly engage in audio.

4. The platforms have however understood this trend well and have been able to grow now on the back of Ad revenues

Total Revenues, Top 5 players ( in Mn USD )

Insights:

Ad revenues have gone up

  • Brands/advertisers are flocking to audio platforms for advertising during both music & podcast streaming

Increased Ad frequency without affecting CX

  • Platforms (Gaana, Spotify) are changing their ad experience by playing multiple ads in a stretch but giving longer ad free music.
  • While, this has increased the ad frequency (more ads), it has improved the free user`s listening experience

Essentially the answer to my original question i.e. Is Video Killing the Audio Star? is negative. Really admiring to see how agile is our Internet Industry and how the depth of our knowledge across these sectors enables our client to win even in not so conducive environment.