Digital is undeniably the next level of evolution for broadcasters and, in the challenging times of lockdown, the results of their investments and efforts are getting verified. Unlike TV, broadcasters have global competition from Netflix and Amazon Prime Video in OTT format, who are investing heavily to capture SVOD market share in India, and are aggressively building local tent pole content (apart from global content). Currently, Disney+ Hotstar is winner in India. Zee5 and SunNXT may require to shore up their efforts in OTT to grab a reasonable market share on digital platforms; presently their market share in digital appears to be lower than in linear TV. This reduces visibility on their incremental market share in media spends (advertisement and subscription) in the longer run. Maintain BUY on Zee Entertainment Enterprises (ZEEL) and ADD on Sun TV.
* Significant rise in users on OTT.As per Apptopia and Moengage, media and entertainment has seen rise in downloads and active users globally. Neilson India data shows 115% rise in users on VOD for original shows and 57% rise in time spent per user. These increases have probably been aided by absence of fresh content on television. Rise in users formovie was42% and time spent per user increased by a strong 82%. The current lockdown and lack of content on TV presents a huge opportunity for broadcasters to showcase their VOD content, and build strong and loyal user base. There has been huge surge in digital consumption, and normalised levels (when TV starts airing fresh content) for digital should be meaningfully higher than pre-lockdown levels in our view. This would increase the importance of VOD platform for broadcasters. Globally, the trend has been more pronounced with the US reporting 25% of its total TV usage coming from streaming
* Disney+ Hotstar dominates top-10 movies and original shows on OTT.The top-10 movies (based on unique audience) on OTT in week 17 (starting 25thApril) had seven movies from Disney+ Hotstar, two from Amazon Prime Video (APV) and one from Netflix. In the top-10 original shows (based on gross consumption) on OTT in week 14 (starting 4thApril), five shows were from Netflix, three from Disney+ Hotstar and one each from APV and Voot. The notable missing OTT was Zee5, which is disappointing considering that it has one of largest movie libraries, and has been promising huge investments in OTT content. OTT may require a few original tent pole shows to attract users; e.g. Asur, which has worked well for Voot. Such shows probably are missing on Zee5. We reckon these are early days and evolution has just begun, and sustainability of ranking will be critical for service providers.
* It’s all about ranking...The average OTT app accessed per user during the lockdown thus far rose just to 1.6 (in week-3 starting 28thMarch) from 1.5 pre-lockdown. 61% of users accessed only one OTT app (unchanged from pre-lockdown) while 26% accessed two apps (dipped from 28% pre-lockdown). Users who accessed three apps remained unchanged at 8% while more than three apps were accessed by 5% of users (up from 3%). 61% of users with two or more apps have changed their most preferred app. Fewer accesses per user is probably key reason for Zee5 content not figuring among top-10 on OTT platform. Comscore data shows Zee5 had 59mn unique visitors in Mar’20, a rise of only 2% over Feb’20. Those were initial days of lockdown; however, competition from Netflix and APV has seen strong growth. Unique visitors on Netflix increased by 82% MoM to 40mn and that on APV rose by 21% MoM to 39mn in Mar’20. The corresponding number for Disney+ Hotstar dipped 7% MoM; nonetheless it remains strong with 131mn users. Zee5 presence on mobile apps lagged that of MX Player, Disney+ Hotstar, and Amazon Prime Video according to Comscore data.
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