The recent decision by JioCinema to broadcast some local-language material under a ridiculously low monthly plan of ₹29 might expand the OTT market in India and encourage those who are on the fence, particularly in small towns, to enter the world of streaming. JioCinema's service may be an extra choice for both new and returning viewers, without competing for the wallets of current Netflix or Amazon Prime Video members. However, media industry analysts believe that the strategy's success will depend on the platform's content lineup.
Jio Cinema said late last month that for ₹29 per month, its premium plan will offer ad-free material in many languages, including movies, TV shows, children's shows, and original series. The content can be seen on any device, including connected TV sets. Additionally, at ₹89 per month, the business will provide a family subscription that lets customers stream content to up to four devices at once.
The new ad-free subscriptions will include original series and movies streaming after theater release, while sports material, including the current Indian Premier League (IPL) and select entertainment programs, will continue to be available for free as part of its ad-supported offering. JioCinema launched an annual package for ₹999 last year that included ad-free Hollywood entertainment as well as local-language shows and sports that were funded by ads.
Technology as a Facilitator
When JioCinema was asked about the possible effects of the new package on the Indian streaming ecosystem, JioCinema did not reply. Speaking at AVIA's Future of Video India Summit last month, Viacom18 Media Pvt Ltd CEO Kiran Mani stated that the business hopes to use technology to make premium curated content experiences accessible to as many Indians as possible.
All forms of content adoption are ready to happen if digital media is made simple and integrated into daily life. India has a very long-standing tradition of watching big screens. "Entertainment will be our next venture, after sports," Mani had declared. The fact that the company's roster of content includes sports, family, kids, and Hollywood genres that appeal to every segment of India, he continued, is one of its main advantages.
Quantity matters when trying to establish a daily watching routine. Everything has a cost, and excessive advertising creates friction. Customers often complain about adverts being overly invasive on certain types of content. That's the rationale behind this divergence, he added, making reference to the new price structure.
Indeed, analysts in the media sector note that JioCinema was a latecomer to the Indian market when it came to the release of original content in local languages. It is difficult to attract viewers to consider you in an environment when all of your competitors have already launched premium content and the majority of consumers have two OTT applications on their phones on average. But with a ₹29 plan, there won't be any price disputes, expanding the OTT industry in the nation and maybe leading to a rise in the total number of paying users, according to Uday Sodhi, senior partner at Kurate Digital Consulting.
Quality Content
Although the platform may have eliminated the pricing barrier that many customers have, creating high-caliber content will remain a difficulty in the future. If not, it will suffer with a cheap price point and few subscribers. "It requires five times as many paid subscribers because it is less than one-fifth the price of competitors," Sodhi clarified.
Media industry analysts claim that with a monthly subscription priced at ₹29, the site is scarcely attempting to steal users from competitors like Netflix and Amazon Prime Video. "The idea is to just add another service to consumers' monthly budgets and help them become accustomed to over-the-top (OTT) content." Mehul Gupta, Co-founder and CEO of digital firm SoCheers, stated, "The platform is obviously playing a volume game and already has the advantage of distribution reach from a broadband standpoint (thanks to Jio's telco plans)."
Although price increases are anticipated from the platform in the future, media industry analysts predict that the volume strategy will eventually give way to profitability as paid memberships increasingly replace advertising income.
According to a Deloitte analysis, video streaming platforms in India are realizing that the hybrid model works best for price-conscious Indian customers, and as a result, they are increasingly aiming to complement their SVoD (subscription video-on-demand) services with AVoD (advertising video-on-demand) content.
Revenue to Grow
The study predicted that AVoD revenue in India may rise from $1.15 billion to $2.42 billion over the same time, at a somewhat lower CAGR of 16%, while SVoD revenue would expand at a CAGR of 19% to reach $2.9 billion in 2027 from $1.2 billion in 2022.
"JioCinema may target smaller towns with its competitive pricing to get to the next phase of their SVoD growth while maintaining high viewership among metro audiences with premium content (like international Peacock, HBO, and other series)." Therefore, the price approach serves as a push to expand into Bharat and among the wealthier metro customers who subscribe to several OTT platforms, according to Nikhil Kumar, Chief Growth Officer of Mediasmart, a platform for programmatic advertising.
