India has traditionally been a single-TV household. The entire family gets together in front of one television set to watch their favourite films or shows every evening. This makes it tough to get viewers’ attention when there are 500+ channels running 24×7, especially when the monthly subscription costs a family less than a dinner at a local restaurant. It also means that someone or other in the family is missing out on his or her favourite show.However, the fight for the remote may soon be a thing of the past. Almost every family member has a personal screen now, thanks to the smartphone. The turf war among existing and new telecom players has ensured a digital revolution. Not surprisingly, data prices have fallen by more than 90% in the past year and a half, while bandwidth consumption has grown over 4x. This has resulted in proliferation of over-the-top (OTT) players in the market, more than 30 at last count.“There is a lot of tailwind for digital because of increasing bandwidth and falling prices of data and smartphones,” says Ashish Bhasin, CEO, South Asia, Dentsu Aegis Network. “This is resulting in increased consumption of video on digital. Screens don’t matter to a consumer anymore. We are 18-24 months away from an inflection point when the whole interplay of screens will be seamless.”63980659

According to a recent report on digital advertising by Dentsu Aegis Network, India has 350-400 million internet users now. By 2020, this number will be almost half a billion. Most of them will be mobile first and many will be mobile-only users, says the report. “Also, five years from now, around 2022-23, is when the reach of TV and digital will roughly be the same. That is when reach and frequency will come into play and FMCG and other big categories will start looking at the medium in a very different way,” Bhasin adds.63980664

Experts and analysts tracking the media and entertainment industry say digital video is becoming as mainstream as it gets and there is a fundamental behaviour change at two levels. One, in a single TV market, mobile is the new TV. Two, once a viewer gets used to the conveniences of streaming, she doesn’t want to return to a linear platform like TV.This has made advertisers rejig their media plans to reach their target audience. They now have one more avenue in digital, which is growing at a faster clip than any other medium. To add to it, digital is expected to have a reach that will be on a par with that of television in five years. But the question is, whether or not the digital market will be matured enough to have a measurable return on an advertiser’s investment.63980671

“We expect both TV and digital video to grow handsomely over the next 3 years,” says Rohit Dokania, senior vice-president of research at IDFC. “We estimate digital video to be ~8% of overall video advertising (TV plus digital video) in India, as of 2017 end. With more than ~35% CAGR in digital video advertising, it is expected to garner almost 25% share of incremental ad spends on video advertising in India over the next three years. By end of 2020, we believe digital video could be ~13% of overall video advertising in India.” Sensing this massive opportunity, most TV networks have started investing in their own OTT services. These include Hotstar from Star India; Voot from Viacom18; Sony Liv from Sony Pictures Networks India (SPN); Zee5 from Zee Entertainment Enterprises (ZEE); and Sun NXT from Sun TV Network.63980677

International players Netflix, Amazon Prime Video and Viu have also entered India, which prompted local content companies such as Eros International (Eros Now), Balaji Telefilms (Alt Balaji) and The Viral Fever (TVF Play) to also launch their own apps. Telecom operators did not want to be left behind. They have also decided to offer content, leading to the creation of Jio TV, Airtel TV, Vodafone Play.This, however, has made the OTT space hyper competitive. While the recent players are fighting hard for viewers’ attention and a meaningful scale, longestablished players such YouTube and MX Player continue to be far ahead in terms of daily users. For instance, the watch time of Hotstar, Zee5, Voot, and Sony Liv combined was 13 billion minutes in January, whereas YouTube’s alone was 164 billion minutes, according to AppAnnie, an app market data and insights company.63980681

So the bigger challenge for advertisers, experts say, is to choose between advertising on non-premium video with scale (YouTube or Facebook) and advertising on premium video with limited reach on new OTT services. As long as brands can reach consumers, some argue, it doesn’t matter which platform is being used for advertisement, though premium brands may look at select platforms.Ashish Pherwani, India M&E advisory leader, EY, says, “When an advertiser chooses a platform, he needs to consider brand-related aspects and quantum of reach, and allocate budget accordingly.” However, a top executive of an OTT company has another view on the reach of aggregator platforms like YouTube, given that they do not have their own content.“Advertisers are very mindful of reach and find TV+digital a meaningful way of spending advertising dollars. In case of YouTube, one advertiser can’t exploit the reach or time spent as he will have to buy an insane number of insertions to get the kind of viewership he wants. Until and unless there is a big product change, there is not much scope.”63980685

Times Internet, a sister concern of ET, reportedly acquired MX Player, one of the largest video applications for smartphones. It has plans to build a premium OTT offering using this platform. MX Player reaches 52 million viewers a day, as per AppAnnie, only behind YouTube. Digital video advertising is just starting, experts say, and a rising tide will lift all ships. But as the market grows and matures, advertisers will become more selective. They will choose the avenue that gives the largest return on investment.Ultimately, buying media is a combination of reach and attention. YouTube has reach but its content is mostly of snacking variety and thus attracts low attention. On the other hand, players such as Hotstar, Voot, Alt Balaji may not have a wider reach, but they can boast of more stickiness.“Right now, advertisers are looking at reach. But, ultimately, the parameters will be content, time spent and brand safety. No brand will want their advertisement next to the wrong kind of content. So clients will be looking beyond the media matrix. They will be looking more closely at the return on investment,” says a senior media planner.