Will OTT Apps Dent the Broadcasting and DTH Industry Under Current Trai Mandate?

After the Telecom Regulatory Authority of India (Trai) introduced the new regulatory framework into the industry, the hit was taken by the DTH providers and the cable TV service providers. The subscribers also thought this new migration process to be a tedious ordeal as a lot of customers struggled to switch to the new plans and even when they did, they found increased monthly bills. At the same time, we are getting to see the increasing role of OTT apps like Hotstar, Netflix, ZEE5 and more which begs us to ask the question, will these OTT apps lead the way in the content industry and negatively affect the DTH sector?

Widespread Distribution of OTT Applications

Before Reliance Jio came into the telecom industry, people barely used to consume video content online. Watching a YouTube video on a smartphone was a great deal because data packs were expensive. However, times have changed now. We are getting to see a lot of very cheap data packs which have immensely boosted video consumption. Also, a lot of OTT applications like ZEE5, Hotstar and others are being offered with these data plans as freebies. The result is that now the users’ phones have doubled down as their TV screens, whereas in comparison there has been no revolutionary breakthrough in the TV industry and there has been no such drastic price reduction also. In fact, after the introduction of the new pricing regime, many subscribers have complained about rising monthly rentals.

In such a situation, the distribution of content and the ease of access has also increased for the OTT apps. Another significant advantage is the personalised recommendation which the apps can make. Thus, subscribers can watch what they like, and they are not bound by what the broadcaster is showing.

Differences in Pricing

Being a very competitive industry, there is also the pricing factor which has been driving the OTT craze in India. Owing to the cheap plans and the data tariff war which bruised the industry, the telecom operators now want to set themselves apart, and they are making content offerings as their differentiating factor. As a result, many subscribers are getting access to these apps free of cost. This is in high contrast to the DTH industry where subscribers pay a fixed monthly rental.

However, the difference in pricing comes even when you are paying for these apps. For example, Hotstar’s Rs 365 VIP plan which gets you live cricket, Premier League matches and Formula 1 races along with other Premium content. Compare this to other packs on your DTH subscription, and you will find that you will be required to pay a similar amount on a monthly basis instead of annually, hence the cost differences inevitably seem to be very high. Hotstar VIP subscription also gives you the access of Star Network channels to watch Live TV.

What will Happen in the Industry?

In such a case, there is bound to be a gradual increasing leniency of people towards the OTT applications. With the increasing quality of shows on these platforms, massive investments from the companies and increased data consumption will contribute to this factor. It can also be said that the coming of the new Trai tariff regime has somewhat hastened this transition as now many subscribers are of the thought they are overpaying for their subscriptions. But, it is also worth keeping in mind that since DTH is such highly penetrated and reliable form of broadcasting system, the reasons are not yet compelling enough to make the subscribers do a complete flip to OTT platforms.

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