How Reliance JioFiber will impact the OTT industry
Disruption was the name of the game in Reliance Industry Chairman Mukesh Ambani’s address at the conglomerate’s 42nd Annual General Meeting. Of the several significant announcements made by Ambani, there were quite a few that will impact the DTH and cable service providers, the OTT industry as well as the film industry.
Ambani revealed the launch date for JioFiber – September 5, 2019. The optical-fiber-based fixed broadband service has plans to reach 20 million residences and 15 million business establishments across 1,600 towns. Offering speeds of up to 1 GBPS, JioFiber plans will be priced between Rs 700 and Rs 10,000 per month. Plans will come bundled with subscriptions to most leading premium OTT applications.
Moreover, JioFiber customers who opt for the annual plans, called Jio-Forever plans, will get an HD or 4K LED television and a 4K set-top box free. The set-top box can accept the broadcast cable TV signals from Jio’s LCO partners. Earlier this year, Reliance had acquired controlling stakes in three leading cable MSOs – Hathway, DEN and GTPL, who have direct relationships with over 30,000 LCOs.
The implications for the media and entertainment industry are expected to be far and wide. To have an understanding on what it means for the OTT industry, Adgully spoke to some industry experts.
Ashish Pherwani, Partner and Media &Entertainment Leader, EY India, felt that as televisions become smart, we can expect to see gaming, social, user generated and other non-broadcast content getting consumed on them, leading to ever more entertainment options for consumers on larger screens. “That’s what I believe would be the biggest change, with impact on all players,” he added.
Jio is not the only telecom player to offer OTT platforms bundled with its services. But from Jio, one would expect affordable price points.
Sharing his insight as an OTT player, Vishnu Mohta, Executive Director, SVF Entertainment; Co-Founder, Hoichoi, said, “OTT platforms welcome partnerships with telcos to ensure maximum distribution. At this moment, with the announcement of JioFiber, it definitely comes across as another wide-spread distribution channel. The advantage for Jio here is that it will not only be giving high speed Internet to households when one subscribes, but also TV as a platform to experience a seamless viewing of content. Companies looking to strengthen their penetration for mass viewership will be interested in the services being provided by Jio.”
According to Karan Bedi, CEO, MX Player, “India’s appetite for premium on-demand entertainment will continue to rise with more affordable high-speed broadband, which in turn will boost engagement for OTT players. As the only Indian online entertainment platform that offers viewers premium content to binge for free, MX Player users stand to benefit significantly from the announcements made by Jio today.”
Chrome DM’s Pankaj Krishna and Matrubharti’s Mahendra Sharma were in agreement. While Sharma saw this move as a super booster that will increase the demand and supply of OTT content, Krishna added that this will also help in increasing the subscriber base of OTT platforms, which in turn will lead to increase in ad revenues and accessibility.
Pankaj Krishna, Founder and CEO, Chrome Data Analytics & Media, further said, “More fibre connected homes will increase the OTT experience in terms of speed & quality. Due to the content and flexibility on OTT, subscriber migration from linear TV to OTT will also increase.”
Mahendra A Sharma, Founder & CEO, Matrubharti, added here, “Instead of certain players , now the field will be open for content producers and they will get good opportunities to monetise through this demonetisation effect of OTT industry.”
The pricing factor
Krishna was of the opinion that this would result in more competitive pricing across all OTT platforms in the country. Advertisers would increase their presence on OTT platforms due to increased subscriber base and accessibility on multiple devices instead of traditional linear TV.
Agreeing with him, Sharma, too, felt that the OTT service would be available at affordable pricing. He also felt that the brands would get a best advantage of this move as they would get multiple avenues to showcase their brands. “When brands pay the price of content viewers, the consumers get it for free or at low cost,” he opined.
On the other hand, Mohta remarked, “Currently, the OTT services are strategically priced at an economical rate considering the average annual income to reach out to larger volumes of online content consumers. As the decision has been conscious since the inception hence, this move shouldn’t be causing any further decision change unless already taken into account.”
A competition killer?
Mohta felt that this move will strengthen the existing OTT ecosystem in India as faster Internet speed will be provided resulting in the increase of content consumption. “It is encouraging to see the overall market develop, which will be beneficial to all present and future OTT services in India,” he maintained.
Krishna added here that this would impact the OTT platforms which are not a part of the bundle offers. They might also become a part later depending on the feasibility.
While this would bring the OTT platforms to the consumer who is now watching YouTube videos for free, Sharma felt that JioFiber would not be able to bring everything and anything on their platform. Thus, he saw many new players emerging, who would use Jio like a platform to publish their content on a royalty basis or ad monetisation model.