Local cable-wallahs are upping their game to face competition from Netflix, Voot

With faster Internet connectivity, affordable smartphones, and on-demand services like Netflix, Voot, Eros Now, that let you stream content for free or for a subscription fee, the popularity of televisions, rather the local cable operators, has been waning over the years. 

First it was the advent of the set-top boxes and digitisation that took the subscribers away, but cable operators upped their game and came up with their own set-top boxes, to stay relevant in the game. Now, with subscribers consuming more and more content over the Internet, and importantly, on their mobile phones, cable operators are not willing to be left behind yet. 

A India Ratings report says that many Multiple-System Operators (MSOs) or simply, your local cable operators, who were used being in control of content distribution for decades, are now launching their own Over The Top (OTT) services thanks to new competition in the market. 

"In light of competition from independent OTT content producers/aggregators (namely Netflix, Eros Now, Spuul) and broadcasters with OTT services (namely Ditto TV, Hot Star, Voot ) and the industry wide shift of consumers towards consuming digital content, traditional cable companies are setting up their own OTT services," the India Ratings' report said.

In broadcasting, OTT is the delivery of audio, video, and other media over the Internet, without the need of a cable subscription from a Multiple-System Operator (MSO).

The report by Amit Mital, Senior Analyst, India Ratings, said that Mumbai-based Asianet Satellite Communications Limited was the "first MSO to launch an OTT service called Asianet Mobile TV+ for streaming Malayalam shows among other regional TV channels. Hathway Cable & Datacom Ltd are both expected to launch their own OTT serivces soon. 

Looking at the trend, other local cable operators are also expected to follow suit to keep up with the shift in competition, the report says. 

Subscribers over revenue

However, it says, that similar to the big media house-backed private players, the focus for the cable operators launching their own OTT services, is likely to be on garnering a larger subscriber base first and then go for monetising the service. 

For this reason, initially the OTT services offered by the cable operators are likely to be free or very nominal.

Take for example, Network18's Voot which is a free video-on-demand service currently, and is led by advertisements for revenue. In the future, the company may add subscription models, a TelevisionPost article said. Voot was launched in March this year with 17,000 hours worth of content.

Zee Digital's dittoTV lets you take a free trial for two days, before you'll be asked to sign up for its services for as little as Rs 20 for a one-month subscription, Rs 50 for three months, Rs 90 for six months, and Rs 170 for a one-year pack. dittoTV was launched in June this year.

Similarly, Star TV India's Hotstar, has free content and charges Rs 199 for its premium content with the first month free, while Netflix India commands a subscription free, thanks to its popularity and original content.

“Even for the yet to be launched OTT services, Ind-Ra expects these services to be free initially to develop a user base and then move to a subscription based service with gradual price increases. Eventually players will move to tap advertisement revenues using consumer demographics/analytics.” the report said.

However, this will be a good hedging opportunity for cable operators with broadband services, since now content owners can reach the consumer directly, the report said. Asianet, Hathway Cable, DEN Networks, SITI Cable, all offer broadband services. 

Better 4G ecosystem to change things

The Telecom Regulatory Authority of India (Trai) said that there are 1.06 billion wireless telecom subscribers in the country. The Cellular Operators Association of India, said, the number of 3G users in India is expected to more than double (to 330 million) and 4G to grow by over 10 times (to 42 million) from 2015 base till 2017.

As of February, there were about 66 million unique connected video viewers in India every month, and about 1.3 million paid video subscribers. 

"The next leap forward for the industry will be post the introduction of better 4G data services by telecommunication service providers which will enable wire-less and on the go streaming,” the report said.

Consumer, content is king

With many players in the fray, and more set to join in, better content will eventually have the final word. Consumers may use the new services in the beginning but they will eventually settle on the service that offers the best content and user experience and good value for money.

"The rush to encash on the digital frenzy is pushing MSOs to experiment, but the consumer is likely to choose the OTT provider based on- the availability of a variety of content, end-user experience and price point," the report said.