AVOD/ SVOD and the Future of OTT Advertising
Ever since its launch, the OTT ecosystem has been moving ahead on subscription revenues or following an SVOD monetisation policy, where the focus has been on onboarding a growing subscriber base. Though there have been OTT platforms that have veered towards an advertising-supported system or an AVOD monetisation policy, SVOD has been the prime system.
Now, OTT players are experimenting with different pricing policies and also introducing lower-priced packages with ads. Even hitherto SVOD platforms like Netflix are making a move to AVOD, not just in India, but globally as well.
The panel discussion on ‘AVOD/ SVOD And The Future of OTT Advertising’ focused on the monetization aspects of OTT platforms. The panel discussion was a part of Day 2 of the 4th edition of SCREENXX Summit & Awards 2022. Shekhar Banerjee, Chief Client Officer & West Head, Wavemaker India, was the Session Chair, while the panelists included:
Pooja Sahgal, Chief Marketing Officer, Park Avenue
Sanchita Roy, Head of Strategy, Havas Media Group India
Siddhartha Roy, Chief Executive Officer, Hungama
Rakesh CK, Head - SVOD & Business Strategy, Arha Media (aha)
Shekhar Banerjee started the discussions by noting that a lot of advertisers are confused. There are too many choices. India is a very large country. It is the only country where TV is still growing, roughly around 900 million TV consumers, within that smartphone users are between around 650-700 million, and 400-450 million social media users, then there is short form video which has exploded in recent times, roughly around 200 billion users, and then there are video platforms called OTT, then there is YouTube, and cost intensive, heavy duty who are working with OTT players, who are basically licensing or building their own original content, ranging between 50-120 million, depending on the platform and the market where they play.
“That’s the choice which is there for the consumers,” Banerjee said, adding, “At the same time for customers like marketers, ad agencies – I personally work with a lot of clients like Netflix, L’Oreal, Dream11, Vodafone Idea – and it is very interesting to see how they have a very distinct way of using these platforms – from almost full funnel, whether building reach, to bottom of the funnel, customer acquisition, everywhere.”
Giving an FMCG’s perspective, Pooja Sehgal noted that FMCG is a very old industry and the fundamentals of marketing have not changed much. “The key fundamental which we all learn is consumer centricism. All the media data that we have about where the consumer is spending time, what is they are really engaging with, and that great metrics that we have, which is ROI, keeps the consumer at the centre. Keeping the financial metrics as the goalpost, we work very closely with a lot of media agencies, partnering with them to get this rich consumer data, and really seeing across the funnel what are our key objectives. Very often you have to continuously build the brand,” she added.
Sehgal further said, “I am still a big believer in building top of the funnel. So, we use a lot of television, but now I think OTT has really added to it. Initially we were using it 4-5%, but now almost 20%, so we are adapting to the changing needs of the consumer and really seeing how they are evolving. Towards the end of the funnel, there was a belief that video did not really lead to conversions, but now we are seeing video aiding a lot of conversions, having that link to e-commerce. So, I think OTT is now helping us from top of the funnel to end of the funnel; it’s really a win-win for all of us. It is making our choices more complex and varied and making us more focused and meaningful.”
Sanchita Roy noted that what has really changed in the last two years is the way consumers are today consuming media. “During the lockdown we are put into a situation where there was no original content happening on TV. So, a lot of consumers turned to the OTT platforms to get their daily dose of entertainment. Today, we are seeing a drop in linear TV. Due to increased smartphone penetration and with subscription costs coming down, the adoption of OTT as a platform is only going up. And somewhere it complements whatever you are doing on TV, to actually build your top of the funnel metrics. Today we have around 40+ OTT players in the market, and it is only going to become increasingly bigger and better. With measurement coming in, it will be easy to track what the ROI is, what the deliverables are and therefore it is easy to plan,” she added.
Speaking about aha OTT platform, Rakesh CK said, “When we started our journey two years back, the niche that we defined for ourselves was to be in the space of regional, and we took cues from television. 50% of the television audience is consuming regional content. And now as we look at OTT, 35% of the consumption is also for regional language, outside of Hindi. So, there is a clear space that we saw in the regional space and down South with all the great things happening with movies – the movies going national and a lot of blockbusters coming out of South. It has just accelerated the growth that we saw in that space.”
Siddharth Roy said, “In my belief, it is going to be all about what are the kind of efficiencies that each of us on an independent manner or through an aggragated manner bring to the table. So, clearly consumer is king. They are going to get products and services which could come in an aggregated manner, or they may specifically choose. In our case, in music we are singularly independent with 65-75 million users, but when it comes to video, we used the bespoke because we saw the opportunity that you could be independent, but on a bespoke structure if you can get aggregated into super apps, you will generate usage. And you will generate consumption, and there will be a value proposition that the platform and the service will have. So, I believe its early days and you are going to see a lot more of this, with lot more experiences coming in. For brands, too, it is a great place to be in. Because India is truly getting into video, that, to me, is where brand engagement, stories, and all of that can be told.”
These are edited excerpts. For the complete discussion, watch below:
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