The two big boys are not only looking at reach but also pushing for aggressively increasing watch time — the two key numbers that advertisers look for, especially as subscription revenues for premium offers on digital are still in their infancy. So average watch time per user on Hotstar has gone up from 40 minutes last year to 65 minutes already this year, an increase of about 63 per cent. Not to be outdone, YouTube says it has seen 400 per cent growth in watch time on mobile devices in 2017 over the previous year.
What is at stake for the big digital players is a larger share of the growing advertising pie.
And advertisers are expending more on digital than ever before — estimates by Ficci-E&Y say in 2017 they put in more than Rs 115 billion, which constitutes more than 17 per cent of the ad spend.
But by 2020 it is estimated to hit Rs 204 billion, or as much as 22 per cent of the expenditure on advertising.
But the Indian digital and OTT markets are in many ways an outlier compared to global markets, where traditional broadcasters have not made a serious dent. Says Ajit Mohan, chief executive officer of Hotstar: “Digital has been dominated by Google and Facebook in most markets around the world. In the US, there is Netflix but it is a subscription-only model and not open to advertisers. In India it is unique, Hotstar has become the third digital channel and it attracts a large engaged audience as well as advertisers.”
And if the App Annie numbers are anything to go by, there could be a fourth Indian player — Reliance Jio.
But the strategies of the two players cannot be more different. YouTube is an open platform for creators of content, who are supported in monetising their offers, based on their reach and watch time.
“We are a supermarket, and at the confluence of creators, advertisers and consumers. We co-exist with broadcasters, film production houses, studios, TV channels, among others,” says Satya Raghavan, head of entertainment, YouTube India.
Raghavan says YouTube has over 60,000 full-length feature films on its platform, loaded by varying production houses. It has also tied up with Sony Pictures, through which World Cup Football content like highlights are shown on YouTube, which, Raghavan says, helps the broadcaster to drive back viewership on its OTT as well as TV channel.
It has also encouraged short feature films, some of them directed by well-known names, as they believe that it works well on mobile devices, where consumers have limited time.
But Hotstar has eschewed short films. Mohan says it has a contrarian strategy and believes consumers on mobile devices continue to prefer high-quality long-format stories made by professional storytellers.
Hotstar also says it looks at reach differently. For Hotstar, its reach is co-related to producing content that is safe for advertising. Mohan says: “There is no smut (explicit content) or other content which brands should be bothered about. That is because our content is curated by us and created by the best storytellers.” Based on this criterion, Mohan says it would have the largest reach in India.
Raghavan says there has seen a multifold increase in viewership, especially with data prices dropping dramatically in the country.
For instance, he says that from one channel that crossed the 100,000 subscriber mark every day, the number has grown tenfold. And there are at least three channels that cross the 1 million subscriber mark every week. And there are some very big players like T-series which have garnered over 48 million subscribers, making it a force to reckon with. But Mohan says its research has shown that there are lots of viewers of Hotstar who are not on YouTube and “they are available to marketers”.
Surely the war has just begun.