VOOT will be the first AVOD platform in India to be a profitable business: Akash Banerji
Competition in the video streaming space in India has grown the category to 375 million AVOD users and 10-15 million paying subscribers at the beginning of 2020. Penetration has increased due to the many players that have entered the market, growing the regional share of the pie massively in the few years that OTT has been in existence.
Most of the users are coming on the back of mobile where the cost of acquisition for an OTT player can be 10x times the cost of acquisition on a desktop platform. The biggest driver of this cost for OTT players was cost of acquiring and developing new content to satiate the viewer. Video consumption is far higher than what it used to be, with Akash Banerji, Head – AVOD Business, VOOT, reporting that it took the platform 3 years to achieve its first 100 billion minutes of watch time. The platform was able to double its watch time in 2019 on back of massive spike in video consumption.
With most OTT players shying away from discussing profitability and revenue goals, VOOT brought monetisation goals to the forefront last year with the creation of VOOT Studios to partner with advertisers and help them create content for OTT. Banerji was tasked with bringing the 100 million monthly active users (MAU) on the platform to strengthen their advertising proposition.
“We have adopted a user-led model instead of the content-led model, which means that we will only go after the user who is a high value to the advertiser,” said Banerji.
VOOT leveraged its blockbuster non-fiction content such as ‘Bigg Boss’ to bring new users on the platform. The reality show was simulcast on the OTT platform and content pieces were regularly released on the platform to keep the audience engaged.
“What we’ve observed is that 90 per cent of new users become inactive or uninstall the app in 13 days,” noted Banerji. By leveraging data analytics and machine learning, they were able to retarget the high value users and bring them back to the platform, turning them into monthly active users. Banerji calls this creating ‘customer lifetime value’.
According to data provided by App Annie, the platform had the highest ratio of daily active users (DAUs) at 34 per cent in December 2019. VOOT claims to have the highest engagement, leading in TSV (Time Spent per viewer) at 46 minutes, as per App Annie in December 2019, and is now set to begin the decade garnering 100 million monthly active users.
As Banerji explained, “Achieving 100 million Monthly Active Users in just three years is not a mean feat. We have been able to achieve this new viewership benchmark through our focus on driving constant engagement and reach through impact partnerships, product and tech innovations and versatile content strategy. Our constant pursuit of building a digital business using a user first strategy and basing all decisions that drives higher engagement is the only reason that has made us achieve a quality 100 million user base, leading to 2x increase in monetisation.”
Adding further, he said, “There are two very clear windows of opportunity for us. There is the network part of it which drives that maximum acquisition and retention. We will only look at new content creation from a revenue possibility. If new content drives sponsorship and revenue opportunity then only will I get into it.”
The next goal for the platform, revealed Banerji, is to double its revenue by 2020 and achieve profitability. In conversation with Adgully, Banerji shares the platform’s view on original content, new players entering the OTT market and their user centric business model.
What do you mean by going after the high value user to strengthen your advertising product?
I know what my advertiser is looking for. For 100 different advertisers, I know the different consumer cohorts, how many audiences they want and how many impressions they want. I know how many audiences are there on my platform which matches to that. If an advertiser wants to reach 10 million users and generate 50 million impressions, then I have 5 million users and 35 million impressions, I have to bring additional 5 million users and 15 million impressions.
Will the cost of acquisition be impacted with new players entering the OTT market in 2020? How are you driving down those costs?
I can’t do anything to drive those costs down. All I can do is create a data backed, algorithm based expertise within my team where there is a constant focus on optimisation of cost. In digital, we never talk about reducing the cost; we talk about optimising the cost. If a user or cluster of users today is coming at a price of $10 then how do we optimise that cost using our in-house expertise. We were one of the first OTT platforms to bring the cost of acquisition to a below $10 price. That has happened on the back of massive optimisation that we’ve managed to do.
Regarding the cost of acquisition going up or down, it is a double edged sword. As more platforms enter the market, demand for the consumer has gone up. Your value to the platform has gone up. As the platforms flourish and increase in sheer size and scale, their inventory also increases, which means that supply is also increased. Eventually, the demand and supply will hit equilibrium. It will take a while to reach that equilibrium as we have to be cognizant of the fact that this is a 3-4 year industry.
What is the role of original content in a user centric business model?
Original content is for the international players who have come into this market without a huge catalogue of Indian content. Originals are the only way they can dish out content to the consumer. We have 600 shows coming in from my network, that’s 70,000 hours of content. The only reason I would create originals is if it would bring me new consumers, if it will drive consumption or if it will drive monetisation. We won’t be doing originals just for the optics of it, so that we can paint billboards on the Western Express Highway.
Co-Creation with VOOT Studio: Launched in April, VOOT Studio is a playbook for advertisers & brands of all sizes that has been built using a combination of our creative storytelling, production expertise, interactivity offerings, social media platforms and native elements that come together to meet the business objectives brands. In less than a year, VOOT Studio has co-created marquee properties with brands, helping each brand uniquely deliver on their brand narrative. Unique shows and formats like TikTok present Work it Up with Sophie and #Cheatweekin Singapore with Singapore Tourism, amongst others, have all contributed to building equity and resonance for the brands. 10 per cent of monetisation on the platform is achieved through VOOT studio with the focus on doubling the same through the next year.
VOOT Partnership eco-system: One of the key drivers of reach through the year was the building of the most diverse and inclusive partner ecosystem that ensured an omnichannel and multiscreen presence for VOOT. Seamless and wide distribution through partnering with best in class brands across categories like connected TVs, devices, telcos, travel, utility, broadband, etc., with names like Sony, LG, Samsung, Flipkart, Ola, MX Player, Airtel joining the new bandwagon have ensured the last mile availability of VOOT.
Expanding regional footprint: Unlocking new territory with vernacular Content, VOOT’s regional slate saw many firsts. From making a digital first entry into the Telugu market with shows like ‘Feet Up with the Stars Telugu’ to Regional Reality Content experience being augmented with interactivity & advertiser friendly content innovations, VOOT’s regional story has continued to grow from strength to strength. The platform has witnessed 4X growth in the contribution to the views from Regional content as a result of these initiatives.
An all new refreshed VOOT: The first distinctive step towards achieving the milestone come from building a Stronger, Agile & futuristic tech for the all new VOOT 3.0. Focused on improving content discoverability, providing unmatched user experience and agility for the dynamic digital content user, the all new refreshed platform enhanced the VOOT experience.
Enhanced and immersive user experiences and continued audience patronage is sure to drive VOOT towards new echelons of growth.