Pay More for Ads-free OTT
Just when we were getting used to ads free streaming, all the top platforms are flipping over)
In a world where there are no free lunches, the pandemic provided home alone individuals and families with a buffet of offerings over video streaming platforms. Suddenly movies and web series gained popularity, sidelined actors began taking center stage and content became global as language barriers got broken.
And, all it required was an annual subscription, some of which was borne by over-zealous telecom companies in the hope of attracting customers for their broadband services. However, while viewership grew leaps and bounds, so did the cost of content creation. Lack of good content automatically results in reduced viewership and low engagement for OTT platforms.
Most streaming platforms have been reporting low engagement and reduced revenues in recent times that resulted in Netflix and Disney Plus introducing ad-supported plans last year. Of course, the shift isn’t visible in India thus far, but the impact is there for all to see as Disney Plus HotStar is already in acquisition talks after it lost the staple cricket feed to Jio Cinema in the most recent round of bidding for streaming rights of the BCCI.
The latest to join this bandwagon is Amazon Prime which revealed that it would start showing ads on Prime Video from early next year. The company would offer an ad-free edition to users at an extra cost of $3 per month to Prime members in the US, UK, Germany and Canada. This would be followed by France, Italy, Spain and Morocco later in 2024.
Though the streaming platforms are committing to fewer ads compared to linear programming for which the benchmark is about four minutes per hour, the obvious idea is to get some more cash out of those who are addicted to the OTT viewing. One that brought binge watching into our everyday lexicon since 2020-21.
Disney Plus HotStar is down and almost out
Coming to the Disney Plus Hotstar story, its parent company Walt Disney is in advanced stages of discussion with Reliance for a potential sale of its streaming business in India. A Bloomberg report says the company held talks with potential buyers around a complete sale of Disney Star business or even a piecemeal transaction that includes a combination of assets that includes sports rights and streaming services.
The reports said top executives of Reliance and Disney held direct negotiations for a transfer of the businesses, which was fast tracked following Reliance company Jio Cinema acquiring the digital rights for all cricket in India in a bidding process that saw Disney Hotstar staying away, in spite of being the holders of the rights in the past. This left Jio in a two-way battle with Sony, which is currently in the process of acquiring Zee.
Jio Cinema has already made a splash on the streaming services through live coverage of several tournaments starting with the World Cup Football last year, the cash-rich IPL followed by the cricket world cup later this year. In addition, it has content sharing partnerships with HBO and NBC Universal for streaming premium English content.
All of this reportedly resulted in Disney Plus Hotstar witnessing a loss of 20 million subscribers between September last year and July 2023. As always, Jio Cinema owners Reliance Industries are spending big bucks on its entertainment content business, committing Rs.2000 crore to produce more than 100 films and web series.
Amazon also promises more original content
As for Amazon Prime, the company said in a blog post that the move to charge for ad-free streaming would help it continue to invest in compelling content and grow its investments over a long period of time. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers, the company said.
Amazon had introduced a free and ad-supported video experience on Fire TV devices in the United States earlier in May. The company also announced that it would bring more than 100 Amazon Original series and movies to its ad-supported streaming service and in August it launched a new Fire TV Channels app with access to 400 ad-supported channels in the US.
Their latest announcement comes barely a month after YouTube had said that the company was experimenting with longer but fewer ads on TV akin to commercial breaks on linear TV.
