App-based streaming services are the new moguls of advertising in India

Streaming services have emerged as the big advertisers of 2018 audio and video apps fight for audiences aggressively

Drive down any of Mumbai’s arterial roads and a common sight that greets every eye are billboards splashed with ads of Netflix, Amazon Prime Video, Zee5, Hotstar, Voot or SonyLiv; the same is the case with several channels on TV, on social media and print. Be it new shows, originals, award winning movies, content in every form is being advertised with aplomb. And the implication is hardly lost on anyone; the new moguls of advertising in India are the app-based streaming services.

The audio and video streaming market in India is booming and players are predictably taking full advantage of it, showcasing all that they have on every medium possible. Be it the music apps talking up their song libraries or the streaming services, their new content. 

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In many respects, what streaming majors are doing now is what e-commerce giants such as Flipkart, Amazon and Snapdeal did a few years ago, announcing their arrival on the country’s entertainment scene just as their counterparts in the e-retail business did. No wonder, most recent ad forecasts by media agencies have described streaming services as big advertisers of the year. And the assessment is that the future  will be no different as these companies strive to make their presence felt even more.

Tanmay Mohanty, group chief executive officer at Zenith, says, “Digital will continue to accelerate both in reach and consumption. Television will be on an upward curve. The expectation for radio is that it will digitise aggressively in response to streaming services while both cinema and out-of-home (OOH) will innovate and increase reach-led investments.”

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Streaming services, Mohanty says, will continue to advertise aggressively in 2019 as the market slowly but steadily begins to consolidate, pushing up overall ad spends for the year. This point is endorsed by Magna, which is the insights arm of IPG Mediabrands. The agency says that digital advertising will lead in terms of growth rate in 2019 (at 32.8 per cent), led by categories such as streaming video. 

S Venkatesh, senior vice president, Magna India says, “Massive expansion in smartphone usage is shifting the consumption from collective to discrete. Streaming video will be the biggest gainer in terms of format and is estimated to double its revenue in 2019. Total ad revenues will grow from Rs 687.75 billion to Rs 793.1 billion thanks to all this action.”

Experts say that the TV viewing market in India is undergoing a subtle change from appointment viewing to binge watching, led by streaming majors who are aggressively advertising their shows on all media. The fall in data tariffs, improvement in broadband services as well as availability of cheaper and better smartphones has meant that it is no longer difficult to watch videos anywhere (including data-dark spots such as office lifts and moving trains). Estimates suggest that streaming video gets maximum viewership during travel time, when consumers are relaxed and not engaged otherwise.

 As Amardeep Singh, chief executive officer of digital agency Interactive Avenues, says, “There are two or three factors that are driving the growth of digital. Data has become cheaper and it is expected that mobile tariffs will reduce further because of the push by telecom operators. Consumption of TV as a result will start happening through data. Secondly, online video is becoming bigger. So even if one looks at broadcast companies, their focus on over-the-top (OTT) platforms has gone up. And advertisers are recognising all these trends. OTTs themselves are emerging as big advertisers in their own right.”

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No wonder digital media experts are describing streaming majors as the new advertising warriors, who are likely to take ad spends to new highs, something that e-commerce majors did in 2014-15.   

By some estimates, streaming majors are expected to add nothing less than Rs 2-3 billion in terms of ad spends in 2019 as managements of these companies allocate big budgets for content production and marketing. Industry sources say that close to Rs 30 billion will be spent by most streaming majors in the next one to two years to ramp original content, distribution and technology, key matrices in the Indian market, where players are still in customer acquisition mode.

“There are multiple things happening at the same time. The market is shifting from linear (regular) to digital TV. Streaming majors are tapping into this trend with new shows and programmes. The need for customers will push them to advertise aggressively. At the same time, consumers will gravitate towards those that provide the best service,” says N Chandramouli, chief executive officer, TRA, which brings out the annual Brand Trust Report.

According to a report by the Mobile Marketing Association and GroupM, India now has 100 million OTT viewers with the number expected to touch 400 million in three years. Video content consumption is also expected to jump from around 50 per cent now to 75 per cent in the next three years.