WILL OTT PLATFORMS OUST DTH SERVICES?

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Historically, cinema and other audio and video content have been consumed vide theatre and television. Additionally, cable television delivered viewing content using co-axial and optical fiber connections. The development of VHS, DVDs, Blue-rays, and the resultant surge in video rental services ensured that that movies and videos became widely available at home and whenever needed.

Direct-to-home technology followed next, bringing high-quality television broadcast and on-demand entertainment, news, movies, and sports straight to the user through satellite and dish communication. DTH is an abbreviation for Direct-To-Home TV. It refers to getting satellite broadcast in one’s own house via a personal dish. DTH eliminates the requirement for a local cable provider and connects the network directly to the client.

Further technological advancements have made movie or TV viewership even more convenient making use of the worldwide reach of the internet, by Video on Demand (VoD) services. VoD is the streaming of video content over the Internet using Over-The-Top (OTT) applications (OTT). Viewers may watch video content on any Internet-connected device, such as a smartphone, smart TV, tablet, desktop computer, laptop, and so on, by using OTT apps.

With internet speeds increasing and data packs becoming more affordable, OTT platforms are quickly becoming the go-to destination for the newest movies, TV shows, and live sporting events. Increased internet connection along with a hectic lifestyle are contributing to the shift away from DTH and towards consumption of viewing content on the move. This change is clearly marked by an increase of OTT subscribers. The arrival of OTT platforms such as Netflix, Amazon Prime, and Hotstar in recent years has drastically slowed the growth of direct-to-home (DTH) TV subscriber base. The key reason for this is because OTT platforms provide access to global and domestic content considerably faster than DTH services. The following examples bear a testimonial to the tremendous growth of OTT platforms:

  • Walt Disney said in its most recent quarterly financial report that it had attracted roughly 8 million customers to its OTT services in the previous three months. Disney+ Hotstar, the firm’s Indian OTT platform, accounted for slightly more than half of that figure, according to the business. Hotstar already has more than 50 million users, according to Walt Disney.
  • The revenue earned by theatrical releases of films continues to account for a sizable portion of film revenues. This was normally followed by cable and satellite rights, but in the last year and a half, OTT rights for films have emerged as a significant source of revenues creation. According to a recent KPMG research, “the economics of film production have been overhauled as digital rights have shifted the dynamics of film producing in favour of production studios.” To get a sense of how serious the OTT industry is about its investments in both Bollywood and regional cinema, the report goes on to explain how OTT platforms are investing heavily in acquiring film libraries, Amazon Prime, for example, purchased the digital rights to 12 of the top 30 grossing Hindi films, followed by Netflix, which got 9, ZEE5, Hotstar landed 3 each, and others 2. Thus, leaving little or no scope of their release on DTH.
  • Another notable tendency is that 80 percent of new films do not have a theatrical run of more than four weeks. Streaming behemoths like Netflix and Amazon Prime buy the OTT rights to ensure that the film is only available on their platform, thus delaying the distribution on DTH networks.
  • Following the COVID 19 epidemic and the consequent lockdown and halt of economic activity, several production firms have released their films solely on OTT platforms. This pattern is expected to continue in future as well. OTT platforms are doing well with films that promise family pleasure. On these platforms, the ‘Originals’ area has seen fantastic entries such as ‘Scam 92’ (on Sony Liv) and ‘Breathe’ (Amazon Prime), whose popularity mirrored the audiences’ taste. Even on a shoestring budget, material with a familiar feel and fabric may attract an audience. Such releases never make an appearance on DTH.
  • As OTT platforms have grown in prominence, broadband service providers such as Airtel, ACT, and Jio, among others, have clubbed their internet packages with OTT subscriptions at highly appealing pricing. These OTT subscriptions include both video on demand and live TV, thereby eliminating the need for customers to have a separate DTH subscription.

Thus, with nearly 45 OTT players in India, video viewership has switched to digital. Does this imply that OTT will supplant traditional DTH providers? To answer this question let us now try to understand what works and what does not, for both DTH & OTT.

AFFORDABILITY & COVENIENCE

DTH is an encoded broadcast that travels straight to the customer through satellite. DTH transmissions are received directly by the subscriber through a dish antenna. Unlike a typical cable connection, this encoded transmission is decoded by a set-top box. DTH offers good coverage, signal quality, and confirms to censorship norms. The DTH installation process, on the other hand, is time-consuming and technical. Also, DTH subscriptions tend to be marginally expensive for subscribers. The cost of DTH is divided into two parts: the set-top box and the monthly rates, which vary based on the DTH operator. Another important factor to consider here is that DTH services are prone to get affected by extreme weather conditions such as strong rains and winds. Also, the content library of a DTH services is restricted when compared to OTT platforms.

OTT is an internet based service that provide audio and video content, allowing consumers to pay for the content they want to watch at their convenience, without having to deal with DTH providers. In terms of service quality, these are more economical than DTH, fast and good returns. OTT also supports multiple devices. However, major disadvantages of OTT services include persistent reliance on an internet connection, a lack of restriction, viewing censorship, and binge-watching.

VIEWER DEMOGRAPHICS

Today’s youth want privacy more than ever before. OTT platforms provide the privacy such viewers require. The ability to watch a favorite movie or show whenever and wherever they want is what draws the younger generation towards OTT. The senior demographic, on the other hand, is still lagging behind in terms of keeping up with the latest offerings on OTT platforms. The elderly would have been hesitant to abandon their customary TV viewing habits, had it not been for the pandemic.

Viewers with high speed internet are drawn to OTT platforms as they get the freedom to watch when they want. Thus, one of the necessary infrastructure factors for enjoying OTT streaming is high-speed internet. However, not everyone in the country has connected to 4G or high-speed internet. It is because of this reason that OTT has a higher penetration in urban areas with better mobile and internet connectivity, when compared to the country side. Therefore, DTH services will remain popular in rural regions because of its satellite qualities, which are fully independent of 4G networks or any other form of high speed internet. The unequalled reach of satellite television is its most significant advantage. Regardless of a country’s infrastructure, broadcasters may connect to all viewers in even the most remote places and deliver a truly national service.

FINAL THOUGHTS..

When it comes to OTT vs. DTH, we must recognize that they are technologies that allow the same content to be accessed in different ways. It is only fair for users to be able to choose which of these services is appropriate for them. A variety of factors influence OTT’s dominance over DTH. An important factor here is that OTT services rely solely on internet connections, which are still unevenly distributed and in some cases inaccessible to more than half of the population.

While there is no question that OTT services are growing in popularity, our massive population also has room for a big number of DTH customers. One may eventually surpass the other, but for the time being, both services are holding their ground in the Indian market. We also expect OTT and DTH to collaborate to provide a more balanced watching experience. Let us take the example of Tata Sky, India’s market leader in DTH services. Tata Sky recently re-branded itself as Tata Play. Two years ago, they expanded their commercial interests beyond DTH services by incorporating OTT apps on their interface. Despite the fact that the firm originated as a DTH distributor, they are now primarily a content distribution company. Tata Play users will now have access to continuous entertainment. Consumers will now be able to access both broadcast television channels and OTT content through a single user interface.

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