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Apple’s entry into the streaming space won’t hurt Indian OTT players, here’s why

 

With Apple entering the streaming space, what will it mean for the Indian over the top (OTT) platforms is what everyone is analysing after the tech giant made a slew of announcements.

It unveiled its much awaited streaming service Apple TV+, which will be an ad-free subscription based model. The streaming service will offer users a library of original content for which Apple has invested around $2 billion. The company has got on board big Hollywood names like Reese Witherspoon, Jennifer Aniston, Steven Spielberg and Oprah Winfrey to develop a growing list of original TV shows and movies for the Apple TV+.

While the company is hoping to stand toe-to-toe with the likes of Netflix and Amazon, will it be a threat to Indian streaming services?

Talking to Moneycontrol, Hanish Bhatia, senior analyst, Counterpoint said: “It is likely to have low impact on Indian OTT market, which is already crowded. Indian market strives on ad-based model and localised content. Apple is likely to invest in global content and target premium markets initially.”

Echoing similar sentiments, Shrenik Gandhi, chief executive officer and co-founder, White Rivers Media, said: “The (Indian) market is too big for a lot of people to sustain. There will be only a set of OTT players that will remain and there will be a lot of consolidation which will happen.”

However, Gandhi believes that Apple’s ad-free model is viable because “these guys are cash rich they have deep pockets to habituate people for a certain type of content and they will be paying a premium to make sure people are habituated to a certain set of content and that is bigger benefit they will have.”

But according to Gandhi, Apple’s content strategy will be a big differentiator. Reportedly, the company is following a guideline of no sex, no violence, no crime, no jokes about religion, no political leanings, no swearing and simply keep it family friendly.

“Apple is known as a disruptor and they will do what they are best at doing they will disrupt. But their model is slightly different. OTTs in India have empowered the Indian masses to use their mobile phones as a private theatre,” he said.

While Apple’s content strategy could click in India with many OTTs coming under the scanner for pushing the envelope, it could pose a problem for content creators.

According to reports, Jennifer Aniston and Reese Witherspoon’s morning show saw a leadership change as the company wanted the show to be more upbeat.

That Apple is offering exclusive original shows is big news. But what is bigger is that the content will be accessible on platforms other than Apple devices. Apple TV+ will feature on Sony, LG, Samsung and Vizio smart TVs as well as Roku and Amazon’s streaming sticks.

Moving out of its own device system will widen the reach of Apple’s content which will be a gamechanger for the company Apple especially at a time when Apple’s sales came down to half at 1.7 million units by the end of 2018 from 3.2 million units in 2017, according to Counterpoint Technology Market Research.

But along with this Apple needs to focus on India centric-content, India-centric shows and India-centric pricing said Gandhi.

“India is one of the biggest market for any company who thinks internet audience is important. Having said that one thing we have to consider there have been lot of audience created thanks to Jio. Now, these guys are in the bottom end of the funnel they are not in the top end of the funnel which are technically Apple consumers. Because of the whole Jio revolution bottom of the funnel has got stronger which may or may not affect Apple but the sheer size of the mkt is admissible,” added Gandhi.  

According to an EY 2019 report, internet subscribers grew 28 percent from 446 million in December 2017 to 570 million in November 2018. Given that there are around four billion internet users in the world, one in eight internet users globally is Indian.

Urban internet users grew 19 percent from 314 million to 373 million during the same period while rural internet users grew 49 percent to reach 197 million, the report added.

It also expects that internet users will reach over 700 million by 2021.




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