Over-the-top (OTT) platforms like Netflix in India are slowly and steadily eating into the cable TV business. This is as per a new KPMG report. It adds that there was a decline of nearly 12-15 million active subscribers in Q4, 2019.
The report, titled “India’s Digital Future: Mass of niches” claims that one of the reasons for decline were non-renewal of subscriptions. Other reasons include transition of subscribers to alternate sources of entertainment such as OTT. There were also some blackouts owing to the implementation of the the New Tariff Order (NTO).
The Average Revenue Per User (ARPU) was relatively flat for both DTH and cable operators in the first three quarters. But they did notice an increase by 10-25 percent in the last quarter. The English watching audience is relatively smaller in India. But the widespread availability of English content on OTT platforms has been one of the key factors for a shift.
Netflix-like OTT players in India
Netflix plans to invest Rs 6 billion per year in originals. Amazon Prime, on the other hand, has committed Rs 22.3 billion (in 2017) over 2-3 years in India. For some original series, global platforms like Amazon and Netflix are spending in the range of Rs 10-20 million per episode. For example, per episode cost of original series, including Made in Heaven and Mirzapur on Amazon Prime, was Rs 10-20 million.
The report adds that there can be close to 11-14 million direct paid subscriptions in FY19. Owing to the relatively higher price points and the wider e-commerce appeal associated with Netflix and Amazon Prime, respectively, these two platforms accounted for a bulk of the direct subscription revenues. Owing to a robust slate of live sports, the international library and live TV content, Hotstar also contributed significantly to the overall direct subscription revenues of the industry in FY19.
With Inputs from IANS