A Study On Demand Side Factors Leading to OTT

(Over the TOP) adoption in the Indian Consumers

Harshveer Singh Ohson & Azlan Raza Khan

BBA (Principles of Microeconomics)

Symbiosis Centre for Management Studies – Noida

Abstract

Over-the-top (OTT) video has become a popular keyword in today's world while discussing digital
media and availability of the most recent video content among consumers, particularly those in the
Generation Y group. When there was a time when everyone in the family sat together to watch
conventional TV shows like Mahabharata, the Ramayana, etc. But OTT platforms have seen
tremendous growth since 2013 and by 2025 it is predicted that the market for video streaming will
surpass $332 billion. However, this research comprehending the numerous aspects that influence
millennial consumers' adoption of OTT services. The future of OTT platforms will be promising due to
the development of 5G technology and the IT sector.

Future generations will be better able to deal with highly advanced systems so as to deliver the
experience of high definition video quality to the consumers. Customers will therefore receive better
services in this sector. Millennial customers, who have grown up as digital natives and lack the
patience to wait for movies, TV series, etc. to air, will make up the largest audience for OTT
enterprises. They want to view the content in the same way that they would prepare spicy, instant,
and on-demand Maggi noodles. Therefore, this study aims to comprehend the reasons behind
millennial consumers' addiction to binge-watching video material on OTT platforms, as well as the
advantages that come with it. This study will assist businesses in considering the wider picture of
incorporating OTT services into their business strategies. This paper will inform them of the factors
that influence consumer demand for this service as well as strategies to encourage repeat purchases
and complete OTT platform adoption in India.

Primary and secondary data will be used in this study to examine the factors.

INTRODUCTION:
OTT stands for over-the-top and its called so because the content gets delivered through another
platform (medium) i.e., “over the top” of any other device. It is a media service in which providers
allow streaming directly to an individual. Some of the publication have also described the OTT
platforms as the future of entertainment because of its constant surge in popularity over the years.
In these platforms, content is delivered via internet connection instead of traditional cables or
broadcasting services. OTT is now a very big opportunist in the entertainment and video content
industry. In order to access the OTT media services, a person needs to first subscribe to the
respective services. These services come at a certain cost limited to some amount of time. In these
platforms, there is a plethora of genres, languages for both movies and shows to choose from, so
that one cant say that there is exists a limit for when it comes to preferences of customers. The
major players in this segment are Netflix, Amazon Prime, Hotstar, Voot, Zee Cinema, etc. Big media
firms like Disney, Marvel, and Pixar are embracing OTT platforms due to rising demand for
subscriptions to distribute their material to consumers through streaming services. Customers can
now watch all of their favourite Disney shows including well-known Disney character shows like
Mickey Mouse, Donald Duck, Goofy and more at Disney + Hotstar, which has evolved into a one-stop
shop. In addition to this, many OTT platforms have segmented their business models, introducing
programs like VOOT Kids and VOOT Select as well as unique programmes like Hotstar VIP and
Hotstar Premium. Users can now enjoy a movie at home thanks to the growing trend of video on
demand on OTT services. The expansion of OTT services has also brought in money for other firms,
particularly the industry of smartphones. Future smartphones will feature the most recent 5G
technology, boundless data, and a potent processor. Customers will soon love watching video on
demand on OTT platforms because of the improved network, quick content downloads, low latency,
greater video quality, etc. Therefore, it is apparent that OTT platforms represent the future of media
and that everyone should participate in it.

TARGET CONSUMERS:

The main target consumers for over-the-top services are the millennials. Millennials are those
people which belong to the age group of 20-50 years and are also called “ Generation Y”. They are
targeted because people of this age group are the ones who belong to the working class of the
society. They might access these media platforms while commuting to office or during non office
hours of the day. A big chunk of the target of these media services are also the students. They
belong to that age of 12-20 years. They are so targeted because students themselves are so many in
number and each one has a different preference. There are also so many people who are educated
but unemployed and what better to do in their free than to watch shows or movies of their choice.

CLASSIFICATION OF VIDEO ON DEMAND ON OTT PLATFORMS:

• Subscription Video on Demand (SVOD): The world's most popular online streaming platform
is this one. By paying a small subscription fees, customers may access to watch an endless
amount of high-quality stuff here including TV shows, movies, web series, sports, etc. The
length of the service depends on the type of subscription you have chosen, such as standard,
premium, VIP, etc. These platforms include Netflix, Disney+ Hotstar, Amazon Prime Video,
and others.
• Advertisement Video on Demand (AVOD): Customers enjoy watching movies, TV series,
sports, and other content in this location without using any membership services. However,
as the title suggests, spectators will be seeing a short advertisement while the video is
 streaming. These advertisements are targeted, so they will appeal to users based on their
interests. OTT platforms like Voot and Youtube employ this type of system.
• Transactional video on demand (TVOD): In such a platform, the users are required to pay
separately for each movie or show or any other media of which the service they want to
avail. The most common example of this type of service are iTunes and distractify, etc.

LITERATURE REVIEW:

CASE EXAMPLES:

Case 1: 28 years old Aadhya Chaturvedi from New Delhi works in a Pune-based microbiology
firm. She said she doesn’t watch television anymore and the reason she gave was that the
shows or serials telecasted on there come at a certain specific time everyday. With the help
of streaming services, she has flexibility in choosing a show, series or a movie at any specific
time according to her convenience. She also said that internet gives her a lot of options to
choose from. For Indian shows and films, she uses Amazon Prime Video and for English
shows she prefers Netflix. For traditional or regional shows or movies she chooses Hotstar.

Case 2: Shiba Khan, a freelance musician, much like Aadhya doesn’t care to watch TV shows
either. She is not a regular subscriber of the OTT platforms but is fond of popular shows so
subscribes to the platforms when a show or movie comes out that breaks the internet.

BINGE WATCHING ADDICTION:

According to a 2013 statement from Netflix, binge viewing is a common human behaviour in which a
person sits down and watches multiple episodes of the same show in a single day. Dopamine is
released into the brain as a result of this conduct, making us feel incredibly good about it over time.
It also occurs with other addictions such as gambling, smoking, drug use, etc. According to the most
recent Deloitte statistics, the percentage of binge watching has climbed from 61% to 75% since
2013. The millennial generation is known to engage in binge-watching more frequently than other
generations. The psychology of the vast majority of millennials who binge watch is that they want
the plot to continue.

The average time spent binge watching is thought to be greater than three to five hours. Most
millennials view binge viewing as a harmless pastime rather than a dangerous habit or addiction. The
practice of binge viewing creates a "shared" community around the program. This encourages
viewers to form useful social ties in a cultural setting. These constructive relationships are
strengthened by social connections because people can spend time together and share interests and
have a relaxing time together. Binge watching makes the show more fulfilling as watching a number
of episodes of the same show in continuation keeps the viewer engaged for a longer period of time
so that he/she can enjoy the story for a longer period of time.

COVID-19 AND ITS IMPACT ON THE OTT PLATFORMS:

The sudden COVID-19 crisis that the globe was experiencing has turned out to be a gift in disguise
for a number of OTT services. The Smart TV, Smartphones, and other electronic devices have served
as peoples' refuges when they have been ordered to remain indoors and the next wave of
development for OTT services is being driven by other smart gadgets. The COVID-19 disruption will
hinder the expansion of businesses engaged in direct selling and consultancy services, but if those
businesses deliver any type of online content, such as OTT, they will benefit and have room to grow.
Due to increase of lockdown period, there is promise of innovative offerings by large media firms in
the market for example Disney had collaborated with Hotstar and has become (Disney+hotstar),
American firm Amazon prime has launched special content for kids and family entertainment, which
is free, VOOT has launched similar scheme like Amazon prime which is creating a separate channel
with the name of VOOT kids. The growth of OTT platforms will gradually increase, but it is also
increasing challenges for content creators as they have to offer consumers, especially the millennials
with original content which is innovative and will force them to purchase subscription of OTT
channel and binge watch.

Industries being benefitted by the growth of OTT:

Numerous other firms, including those in the smartphone, smart TV, and gaming industries like Xbox
and PlayStation, have benefited from the rising rate of internet video on demand streaming across
multiple OTT platforms. Many OTT platforms and other major media companies are making strong
investments. Globally, technology is being upgraded to provide viewers access to improved binge-
watching experiences. Eros is now trying to include voice command at the backend, allowing users to
voice search their preferred shows that are accessible in many languages. In order to keep your
interest in continuing to binge-watch, many OTT platforms, including Netflix and ZEE5, collaborate
with high-tech firms that have software that enables machine learning. As a result, you receive
notifications and recommendations for shows that fit into genres you've already seen. By assigning
ratings to shows in accordance with user preferences, Netflix makes sure that users have the best
experience possible. As a result of extremely quick technology and production processes is what
enables the seamless delivery of video content across various OTT platforms.
The Need for OTT advertising:

One of the biggest trends is the explosive development of online streaming services, which are due
to the transforming advertisements and pushing up to 80% more people online. Since watching TV
shows, movies, sports, and other media will increasingly be data-driven and digital, major brands
being equipped with cutting-edge digital technology are incorporating OTT advertising into their
performance mix. With the use of programming technology, tailored commercials are introduced
during online video streaming in OTT advertising, which is the next generation of advertising. OTT
advertising is often referred to as on-demand video content subscription, and these services provide
consumers with a variety of material such as movies, TV shows, web series, etc., which are not
shown on television or may not be appropriate owing to age restrictions. Only sites that provide
consumers a free subscription, such as YouTube, Newsy, Cheddar, etc., are subject to OTT
advertising. Businesses all over the world need to accept that OTT advertising is the future of
marketing products because unlike traditional TV commercials, which are very expensive and require
significant investments, OTT advertisements will only cost a small fraction of that. As these
promotion schemes are based on the content and demographics that the viewer prefers, the
advertisements provide precise content to the viewers.

Rise of OTT and its Business Models:

There doesn't appear to be any reason to question the future of OTTs, with the rise of smartphones,
more affordable smart TVs, cheaper internet, new content and freedom of choice. Although
everything seems to be going well, there are some obstacles. First off, it's important to realize that
the 'out-of-the-world' material that OTT online streaming companies like Netflix offered was the
primary driver of their appeal. In the event that the material is compromised, so is the company.
This is what Voot (Colors-Viacom 18), SonyLiv (Sony), or Hotstar (Star) failed to learn. On their online
channels, they dumped their offensive TV series. Because of this, despite the fact that these
platforms offer much more content, Netflix stands out as a symbol of high quality. Even 'Sacred
Games,' their first production located in India, received widespread recognition. ‘Mirzapur’ and
‘One-Mic Stand’ are two popular Amazon Prime Video Originals. Content should be self-monitored
before being shown to the public because there is no censorship, which is advantageous if not
utilized improperly. In the uncommon industry of entertainment, business models are dominated by
innovation.

Discussion:

One of the main points made in the literature is that millennials will make up the majority of the
audience for online streaming (OTT) services in the future. The assessment discusses a number of
variables that are fueling the growth of OTT platforms both abroad and in India. We have used
examples of two distinct brains in the first two texts to explain why millennials are choosing internet
entertainment over TV. The literature has also clarified the elements that influence the consumption
of material on various OTT platforms, such as the series' star cast, which is now popular across all
social media platforms, and video on demand.

In addition, the globe has been disturbed as a result of the COVID-19 outbreak, as is common
knowledge. Watching movies, TV shows, web series, sports, etc. on numerous OTT channels has
been shown to be beneficial in this condition being the most important source of at-home
entertainment when the nation is under siege. The literature also emphasizes how 5G technology
will affect digital media. 5G technology will not only increase the productivity of the digital media
sector, but it will also support the next generation of networks, which will be able to handle
extremely advanced systems like giving users a virtual reality experience in high definition video
quality. Customers will thus receive better services in this sector. It is also clearly distinguished in the
literature the difference between the ads offered by subscription services and the free ones. Also,
these advertisements on OTT platforms happen to be cheaper as compared to the commercials on
TV while being more precise as they are chosen to match the interest of the viewer.

But even as OTT enterprises have grown gradually, so have their difficulties. The creators must come
up with something original, inventive, and imaginative. The most crucial task for artists is to provide
mind-blowing entertainment that encourages people to continue bingeing many OTT platforms to
watch on. Therefore, using OTT platforms to view movies, TV shows, etc., may constantly be
improved. Future market segment rivalry is expected to be more intense, therefore marketers must
concentrate on employing the proper tactics at the appropriate moment. It is also important to
correctly determine the companies' USP (unique selling ponts). Therefore the best way to create
traffic on your website and grow your OTT platform is creating strategies around customer profile.

Therefore this research paper is an attempt to examine various factors leading to adoption of OTT
services among millennial consumers in India. This research paper will help companies to look at the
bigger picture of adopting OTT services in their business models. This paper will brief them about the
reasons for consumer preference for this service and ways to induce repeated purchase and final
adoption of OTT platforms in India.

Research Methodology:

RESEARCH OBJECTIVES:

• The primary aim of this study is to determine the factors on which the constant growth of
the OTT platforms depends.
• Understanding the mindset of youth and millennials behind bingeing shows regularly.
• The research also talks about the benefits that the viewer enjoys accessing the OTT
platforms.
• We will be able to understand the demand of OTT entertainment in the market currently
and the scope for its future.
RESEARCH DESIGN:

• The main methodology of research to be adopted here is through the means of a

Data Interpretation and Analysis of findings:

Finding 1:

In the survey conducted, the majority of the viewership came from the males. However, the
contribution of the females also comprised of a heavy chunk in the pie chart. The data from this
survey is inconclusive to conclude whether one gender contributes more viewership than the other.
Moreover this information becomes irrelevant as the primary of motive of people here is to extract
some kind of entertainment.
Finding 2:

With the amount of data collected here, we cant possibly conclude a fair majority here. Although if
we look at an absolute majority then it is received by the age bracket of 15 to 30 years by very close
margin from others. Another prominent solution that we can draw from this chart is that if we
combine the viewership of age groups 15-30 years and 31-45 years, i.e., the millennials, we will get a
fair majority of this generation Y.

Finding 3:
There is no clear distinction between the viewership of people with different marital status as both
married and single people had almost equal viewership percentage in this survey, with married
people being slightly higher in representation.

Finding 4:

Majority of the people were post graduate and under graduate. People with a doctorate also show a
keen interest in OTT platforms. The viewership of school students and uneducated students is fairly
low as can be concluded by this survey.

Finding 5:
The annual income bracket of majority of the people was ranging between 0 to 10 lakhs per annum.
People with incomes between 10 to 20 lakhs per annum also had quite a good viewership
contribution. The people with 20+ lakhs per annum income bracket are not very far behind and also
enjoy the services of OTT quite well.

Finding 6:

Majority of participants chose Netflix as their most favourite OTT platform with 32.5% in the bag.
While Amazon Prime Video was 2nd in position with a 30.1% viewership percentage. Disney+ Hotstar
has 19.1% viewership percentage. Other platforms had 18.7%> viewership percentage combined
together.

Finding 7:
66.4% of the people preferred to stream shows or movies from the comfort of their homes whereas
there was 33.6% of the viewership which chose to go to the theatres over streaming from home. By
approximation, we can see that its equal to one-third of the population still preferring theatres over
the OTT platforms.

Finding 8:

16.7% of the people were willing to give up OTT and keep the luxury of theatres or television. On the
other hand, 83.3% offered to give up theatre and television to keep OTT access. It is notable that
majority of the people who wanted to keep theatres and television alive were from the age bracket
of 45-60+ years. It means that the millennial generation as a whole prefers streaming OTT from
home a better and viable option than to go the theatre or watch television shows.

Finding 9:
Majority of the population preferred to spend between 500 to 1500 units of money for the
subscription of OTT platforms whereas a very small portion of percentage of people chose to spend
above 2000 units of money. There was also a heavy percentage of people who were not willing to
spend more than 500 units of money on these OTT platforms.

Finding 10:

Every source of awareness shared a similar percentage. Some people started OTT after seeing ads on
various platforms. Most of the people were told about OTT by their friends and many came across it
through internet. People also happened to stumble upon these platforms by themselves.

Finding 11:
Many people feel that the OTT platforms have become an integral part of their life and they need to
watch at least one episode of a show everyday. Some people felt that they could survive without
OTT platforms too. Some of the people were not very sure of their answer and said that it depends
on other factors too.

Finding 12:

a majority of the people had binge watched a series while a very small portion, approximately 1/5th
of the people said they haven’t done so.

Finding 13:
So most people do believe that with the introduction of OTT platforms, there has been a decline in
the cinema market to some extent. Some hopeful people still believed that there is no harm done to
cinema market by the competition being faced from OTT platforms. There also exists people
believing that the cinema market is now completely destroyed and there is nothing that can be done
to revive it.

Summary of Findings:
The results of this study imply that millennial consumers have developed a habit of binge viewing
movies, TV shows, sports, web series, etc. on OTT platforms. The conclusions were drawn using
information gathered from 76 respondents. The response to this study's inquiry into the elements
that influence the adoption of OTT was based on the questionnaire was used to gather information
on OTT services. The primary focus of the questions was on the importance of using OTT platforms
to watch movies, web series, etc.

FOLLOWING FACTORS INFLUENCE MILLENNIAL PARTICIPATION IN OTT:

• Content Availability: this is the main factor when it comes to consumer preference. The
provider who provides the most varied types of shows, i.e., by incorporating diversity into
their content wins the lottery, especially in the business of OTT streaming.
• Innovation in content: Because viewers grew bored with watching the same old material,
several OTT services like justin.TV, Xbox entertainment studios, SunNxt, etc. failed to
increase subscription income. Therefore, OTT platforms must make sure that the material
they broadcast is original and distinctive if they want millennials to continue binge watching.
When a piece of material interacts with the audience's emotions through suspense, drama,
excitement, terror, humour, romance, etc., it is successful. Thus, one of the most crucial
things is content innovation.
• Audio and Video Quality: When providers of OTT platforms talk about giving customers a
cinematic experience at home, the element of providing the finest audio and video quality
plays a significant part. However, this aspect partially depends on the type of device used to
stream movies, web series, etc. on OTT platforms, namely audio and video players. Smart
TVs will have better video quality than laptops, PCs, tablets, and smart phones.
• No advertisements in between: This is a very important consideration since any OTT
platform that inserts advertisements during video streaming may upset users. Customers
become dissatisfied when there are too many commercials and eventually lose interest in
viewing movies, web series, etc. on that specific website. However, because the marketing
strategy is created in accordance with the demographics and the content that people view,
these advertising might occasionally be advantageous to the company. Due to their ability to
foresee market trends, this tactic provides ad makers a competitive advantage over other
firms.
• Price setting: To make OTT services accessible and hence attract a large consumer base and
achieve market penetration, pricing is a crucial aspect. The cost is determined by the video
on demand monetization strategies based on subscription, transactional, and
advertisement. When it comes to transactional pricing, like iTunes, every piece of material is
inexpensive, and customers may use the service whenever they need it. By contrast,
subscription-based pricing, like Netflix, is expensive since it is a premium service with ad-free
 content. On the other hand, because these services are conventional and contain minor
adverts while streaming video online, such as Voot, Hotstar, and others, their cost is
reasonably affordable. Since every business wants their revenue maximized in the end, so
the ultimate key to survive in the long run is to use the right pricing strategy and launch
discount schemes at the right time.
• Overall Experience: By combining all of the afore mentioned components, it is possible to
comprehend the aspect of overall experience. Consumers, especially millennials, care most
about the affordability, quality, and innovation of the OTT platform to which they have
subscribed. Finally, the audio and video quality have little to no importance, if any.
Advertising while video streaming plays a moderately high role. The right combination of all
these characteristics should be offered to customers by OTT service providers in order to
develop the brand's reputation and secure its dominant position in this market segment.

Conclusion:
In addition to discussing the variables that influence millennial customers in India to use OTT
services, this research also discusses the next generation of networks, which will have more
capacity, meaning the systems will be able to handle heavy usage. Simultaneous HD video streaming
with demand applications like virtual reality. The market's continual expansion in internet usage
makes the future of OTT platforms look promising. India is a price-sensitive nation with a diverse
culture; therefore, because high-speed internet access is scarce in rural areas, more people are
turning to DTH cable operators to watch movies, TV shows, sports, and other programming .

However, as India's digital infrastructure works to establish connections in rural areas, this
restriction is being gradually eliminated. Thanks to Reliance Jio, who provides individuals without
access to a laptop with inexpensive smart phones and internet contracts, iPads, smart TVs, etc. The
majority of OTT content in India is consumed on mobile phones and other portable devices. The
generation Y group known as millennials doesn't have the patience to wait for movies, TV series, etc.
to appear on television. Their daily routine now includes binge-watching movies, TV shows, web
series, etc. on OTT platforms.

The urgent situation in the world brought on by the COVID-19 outbreak is also highlighted by this
study. In particular, the tourist industry has been negatively impacted by the Corona-virus, but OTT
platforms and other firms engaged in the online content market have also been affected. Delivering
it is an opportunity for growth and a blessing in disguise. Due to lockdown, binge watching has
significantly increased among millennials as they have no other choice but to watch movies, TV
shows, sports, web series, etc. on OTT platforms.

This study discusses six factors that influence millennials' adoption of OTT services: (1) Content
accessibility; (2) content innovation; (3) lack of advertisement insertion; (4) audio and video quality
(5)price (6)general impression. These elements form the basis for achieving the research's core goal.
Consumers, particularly millennials, care most about the affordability, quality, and lack of ads on the
OTT platform they have subscribed to, as well as its good and innovative content and top audio and
video quality.

But even as OTT enterprises have grown gradually, so have their difficulties. The creators must come
up with something original, inventive, and imaginative. The most crucial task for producers is to
provide mind-blowing material that encourages viewers to keep binge watching on different OTT
platforms. The market is highly competitive. providers must concentrate on using the proper
methods at the appropriate time and place since segmentation will grow in the future. It is
important to correctly determine the companies' USP (unique selling points). The best way to drive
traffic to your website and advertise your OTT platform is to develop strategies around the
consumer profile.

Recommendations:
By careful evaluation of all the factors that lead to profit for the service providing company from OTT
is:

Content + Audience + Distribution + Marketing + Monetization = Video Business Success.

• Content strategy: creating a mission and vision that aligns with the goals of the OTT platform
is the first important step. Second, identify the customer base and study them. Once you
understand what your audience needs, providing the right content becomes a lot easier.
Also, the platforms should create the content with authenticity and originality, protected
with multi-layer safety so that there is no violation privacy by any user.
• Distribution strategy: another reason to understand the audience is so that they can identify
and study the distribution channels so that it will lead to good establishment. This will also
help in predicting market trends and analyzing customer needs better.
• Marketing strategy: Creating awareness about your platform across wide population is very
important, especially through social media.
• Monetization strategy: diversification of their content for easy access by all the income
groups can be a game changer. lowering of the subscription cost slightly might attract a
different section of the population and revenue can be increased this way.