Leena Yadav’s Rajma Chawal is the story of a middle-aged man who uses social media to connect with his uncommunicative son. It is among Netflix’s newest slate of eight films and one original series out of India. This is in addition to the nine originals and three films from India that the platform is already streaming.

With 70% of the Indian movie intellectual property from the last decade, rival streamer ErosNow is the go-to app for films. Of its 128 million registered users more than 13 million pay an average of US$5 a month (in India) and US$30 (overseas), making it one of the largest pay/subscription apps from India.

There’s also Zee5, which commissioned more than 200 hours of original content each in 10 odd Indian languages earlier this year. “Zee as a (broadcast) network stands for mass India. Our game is languages,” says Tarun Katial, Zee5’s chief executive officer.

As 35 apps battle it out in one of the world’s fastest-growing streaming market, everyone is looking for their own little corner to occupy.Star India’s Hotstar is about catch-up TV and sports, Viacom18’s Voot is about kids’ content, ErosNow about films and Netflix is known for its originals. YouTube, the mother of all OTTs, is about everything.

“For this business to make sense it has to be TG (target group) focused,” says Vishal Maheshwari, country head of Viu India, which is part of the Hong Kong-based US$4.7-billion PCCW. “People are still producing for generic audiences, so what you see online is plus or minus TV here and there,” Maheshwari adds.

Much has changed for Viu India in the two years since “we used to do a lot of aggregation, some originals and hope that the khichdi (a mix of rice and lentils) works”. Driven by research, which pointed toward 18 to 34 year olds and originals in Indian languages, Viu’s 2017 marriage comedy Pelli Gola, an original in Telugu, was a huge hit. Season three is now in the making. So was the Tamil Nila Nila Odi Vaa (Oh Moon Come Here), the love story of a vampire and a man. Viu now focuses on regional originals targeted at millennials.

Many factors have hastened the search for specialisation. India’s US$10-billion TV industry reaches over 800 million people who watch TV for about three hours a day in a predominantly single-TV home market. Now add 412 million people with a decent broadband connection, rising device penetration and falling data prices.

Data consumption doubled over two years from 2015 to 2017. Even though the OTT market is just about US$390 million in revenues, many more millions have been pumped into Voot, AltBalaji, Viu, YuppTV or Zee5 by private equity players, broadcasters and telcos. The pressure to scale up, get the next big hit is huge.

“India is our biggest market for content, we commission more from here than from anywhere else,” says Ted Sarandos, Netflix’s chief content officer.

And therein lies challenge number one. Since professionally created content gets more than 75% of the traffic on most apps, soaring demand has created, even in a robust content market like India, a shortage. This has pushed prices up by anywhere between 40%-60%.

The second challenge is monetisation. The biggest video apps get anywhere between US$3-US$7 per thousand viewers compared to several hundred times that for TV advertising.

And while OTT subscription is showing decent uptick, it’s nothing compared to the size of the market. What does this mean? Very likely that several of those 35 apps will fall by the wayside as the search for sustainable niches intensifies. – Vanita Kohli-Khandekar

Published in Issue Seven of ContentAsia's in-print + online 2018 (December 2018)