Ferzad Palia & Louis Boswell discuss the SVOD play and the best monetisation model
Subscription video on demand (SVOD) is witnessing a steep growth trajectory in India. According to GlobalData, SVOD service revenue in India is expected to grow at a robust CAGR of 15.9% – from $0.9 billion in 2020 to $1.9 billion in 2025. Statista projects SVOD revenues to reach $1,052 million in 2021, with an annual growth rate (CAGR 2021-2025) of 17.06%, resulting in a projected market volume of $1,975 million by 2025.
Day 1 of SCREENXX 2021 saw two leading experts – Ferzad Palia, Head - SVOD and International Business, Viacom18 Digital Ventures, and Louis Boswell, CEO, Asia Video Industry Association – come together for a Fireside Chat on ‘The SVOD play and the Best Monetisation Model’.
At the outset, Louis Boswell presented some statistics from a report by Bain & Company, which stated that India’s online video user base has scaled to more than 350 million people – growing at 24% annually from 2018 to 2020. India is growing at twice the speed as China and Indonesia.
“You are in the right place, right company and at the right time, you don’t have to do anything, it’s all easy,” he said to Ferzad Palia.
Responding to this, Palia remarked, “I have been in the same company for around 17 years now, but it is quite the right time. Digitisation kicked in really well, data is inexpensive, people are able to stream, but I think what has happened at the heart that has changed the dynamics is that the country has now begun to consume a different kind of content over the last few years. It happens every decade, but with video streaming coming in now, I feel the consumer has an option to watch it outside of television content, that is what has taken off.”
“You see online video to be a different product to TV, it’s not just a different technology in the means of delivery, but it is actually somewhat different product,” remarked Boswell.
Speaking on the different kinds of consumers of OTT content, Palia said, “We have a section of the audience who come to us to consume what they would have otherwise consumed on television, because they find it convenient as they can consume it as per their choice. Behind the paywall, we have some great opportunities for them to consume TV++ kind of offerings like watch it 24 hours before TV and things like that. But then there is a whole other section which is not necessarily a consumer of regular TV content and they come to our platform to consume a whole different kind of content, which we refer to as originals or blockbuster movies which will not be on TV, so there are both kinds of consumers.”
Here, Boswell wanted to know whether those consumers would be divided into online only or those who are online and on TV and use it differently for different context and purpose.
Ferzad explained, “The way we look and design our model is that there is one section which is right at the top of the pyramid, who does not consume television anymore and all of their consumption is online. There is a big chunk in the middle of the pyramid, which is consuming both television and OTT. And this might be consuming a little less of OTT, but they are picky about what they want to consume on OTT, which is mainly Originals and unique content and then right at the bottom, which is a broader base, is a large section of television consumers who are also consuming a bit of OTT and looking for richer experiences to do with the content they are familiar with and consuming at a daily basis.”
Steering the conversation towards the growing competition in the OTT space, Boswell said, “Given that you are in such a booming industry at such a booming time, you are obviously not the only one operating in the space and I am sure there must be a lot of competition. It seems OTT is the common playground, where all sorts of players are developing services. How do you manage the competition, and how do you make Voot stand out? How do you mark your territory and try to grow it in such a competitive industry?”
Giving a detailed description, Palia said, “This is the question that we ask ourselves every day – what makes us different today and tomorrow? While I hear it is such a crowded space and how is somebody else going to get it at this point of time, the honest truth is that for the network for some reason or the other we have always come to the party late and every genre entered in. Digital is the genre where we came in pretty early. We launched Voot in 2016-2017 when it was just taking off, so we have a lot of learnings over the years and the business has done exceedingly well. Until last year it was an ad supported platform, we’ve launched our subscription businesses Voot Select and Voot Kids last year and it has been a fun journey to see what consumers really want to pay for. It was a school of thought when we were launching and building out our proposition, that a consumer is never going to pay for any kind of extension to TV content, and we got proved completely wrong. So, we innovated, Voot is currently the catch-up destination for everything that is on Viacom18 television content, let’s see if we can become the premiere destination for everything that is Viacom18 TV content and we put all our fiction shows 24 hours before TV. It was a phenomenal success and the number of subscribers that we got back from just that one preposition surprised everyone. Then we kept building from there.”
Watch the entire interesting conversation below: