The online video reality

Star India’s Hotstar claims to have reached 202 million people during the Indian Premier League (IPL) 2018, up from 113 million last year. ChuChu TV is now the biggest pre-school brand on YouTube globally at 17.5 million subscribers up from 14.03 million last year according to Vidooly, a video intelligence firm. Tata-Sky will soon become the third direct-to-home operator after Airtel Digital TV and Dish TV to offer Netflix and other video apps. 

The general buzz on digital continues to be good. There are the usual ‘cord-cutting,’ ‘young people going online’ articles all over the business press. Much of it makes little sense if you know three things.

One, cord-cutting is a reality in the US not in India where TV remains obscenely healthy. It reaches 915 million people who watch it for an average of three hours a day in 183 million TV homes. Sure, India is the world’s fastest growing online market. There are 424 million Indians online, of which, about 300 million have a decent broadband connection. More than 35 entertainment apps make an estimated Rs 30 billion in advertisement and pay revenues. That’s just 4.5 per cent of the TV industry’s Rs 660 billion revenues. Note, more than three-fourth of online viewing time is spent on catch up TV. 

This is not to say that digital won’t grow, of course it will. But we need some perspective to the hyper-enthusiasm over it. Online will be an AND not an OR medium because of the sheer headroom for growth of all media and the dynamics of the market. For instance, there are over 100 million Indian homes that don’t even have a TV. In the US, Netflix could disrupt the market by offering at $8-12 what traditional pay TV did at anywhere between $40-80 a month. In India, the average pay TV outgo is $2-3 a month. There is no price arbitrage. 

Two, Hotstar can scream its IPL numbers from the front pages of newspapers but they come from Hotstar analytics not from any independent third-party. ChuChu TV numbers are from YouTube. Its performance on Roku or other platforms, the stickiness of its app, is unknown. 

This lack of robust third-party metrics is the big elephant in the online room. In my 17 years of covering media, online has been the toughest to analyse on basic stuff like traffic, time spent, revenues and so on. If I want to compare TV shows, channels or entire networks, Broadcast Audience Research Council or Barc has the data. Ditto for print with the Indian Readership Survey and Audit Bureau of Circulations data. 
You could argue that online has comScore, Nielsen, App Annie, SimilarWeb and others. However, many video apps and sites do NOT allow third-party audit or measurement of their statistics because that means giving server access. Try getting a list of the top ten streaming brands that everyone agrees on and has no caveats — inclusive of this and exclusive of that. There is no consolidated, neutral metric for online — a huge drawback if the industry has to grow ad revenues. 

Media agencies talk up video apps because the commissions are better than the one per cent they get on TV. But the rates they offer for online audiences are still a single-digit fraction of those on TV. To get there, video apps need consistently large numbers and a metric that showcases those. Can online firms get together to develop a metric a la Barc? 

Three, most apps and Over-the-top (OTT) platforms are too hung up on being the new kids-on-the-block. But if they have to be taken seriously by viewers and advertisers, they have to start thinking like media firms. Consider Netflix, one of the biggest streaming brands globally. Netflix is not a platform anymore but a studio that analyses its data to commission some of the best content there is and monetises it through subscription. Its approach to audiences and revenues is as traditional as it gets.

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