Faced with subscriber loss at the top and bottom end of the funnel, the direct-to-home (DTH) operators have pivoted to over-the-top (OTT) aggregation in a bid to futureproof their business model. DTH operators have been consistently losing subscribers to DD Free Dish and OTT platforms. While the top end of the DTH subscriber base is migrating to OTT, the bottom end is shifting to Prasar Bharati's free DTH service DD Free Dish.

Tata Play recently opened up its OTT aggregation service Tata Play Binge to customers outside its DTH platform. On the other hand, Dish TV's Watcho recently metamorphosed into an aggregation service. Watcho started out as Dish TV's in-house OTT platform offering original content in addition to live TV channels across languages.

As a standalone service, Tata Play Binge aims to offer 25 OTT apps plus gaming. Some of the apps on the platform include Disney+ Hotstar, ZEE5, SonyLIV, Voot Select, MX Player, hoichoi, Chaupal, Namma Flix, Planet Marathi, Sun NXT, Hungama Play, Eros Now, ShemarooMe, Voot Kids, Curiosity Stream, EPIC ON, and DocuBay. It is in the process of onboarding Apple TV+, Lionsgate Play, Travelxp, ShortsTV, Reeldrama, Manorama Max, Tarang Plus, and Koode to the platform.

Dish TV's Watcho will offer OTT content from Disney+ Hotstar, ZEE5, SonyLIV, Lionsgate Play, Hungama Play, hoichoi, Klikk, EpicOn, Chaupal, and Oho Gujarati via a single login and subscription model. Over and above that, Watcho will also provide more than 35 original series, 300 exclusive plays, and 100+ live channels.

While Tata Play's OTT packs are priced between Rs 59/month to Rs 299/month, Watcho's OTT packs start at Rs 49/month going up to Rs 299/month. Customers can access both the apps on mobile and the web.

According to Ashish Pherwani, Ernst & Young Partner, Media & Entertainment Advisory Services, the launch of OTT aggregation service by DTH companies is a win-win situation for both sides. "OTT aggregation provides a mechanism to increase stickiness in the subscriber base. Given the last mile relationship that TV distribution companies enjoy with subscribers, it is a win-win situation where OTT platforms gain reach and collection mechanism, TV distribution companies increase ARPU and relevance and consumers get increased content and platform choices."

Tata Play Chief Communication Officer Anurag Kumar said Tata Play Binge will help in expanding the pay customer base for OTT. By becoming a standalone service, Tata Play Binge will get access to 450 million consumers of online video content compared to Tata Play's DTH base of 70 to 80 million viewers.

"It allows us to access a large market which is sitting beyond the Tata Play Binge base. Out of 450 million viewers, only 50 to 60 million viewers are actually paying for OTT. It is an opportunity to convert free consumers to paying customers. We will help in expanding the market as an aggregator. The pay OTT market has reached a certain point but it is very small. There will be people who will subscribe directly to an app, but there are enough people who will come through an aggregator," he added.

Kumar stated that Tata Play Binge will solve the problems of availability, affordability, and accessibility for consumers. "The reason why customers will come to us is due to single log-in, single billing and unified interface. Currently, Tata Play Binge is accessible on mobile and the web, but it will be available very soon on smart TVs," he said.

"We have already seen how cricket viewership on digital has gone up dramatically. DTH and cable may need to pivot to sustain growth in the future. Clearly, there is space in the market for aggregators. Consumers who are willing to pay for content find it very cumbersome to go from app to app. A lot of players are trying to solve this problem through aggregation. But the question remains as to how these aggregation services will combat telecom operators like Airtel or Jio. It is going to boil down to UX. Platforms that provide a better viewing experience and manage to gain scale quickly will be able to offer better pricing and create a larger platform for advertising. It's still too early as models and offerings are evolving," he stated.

Dish TV India Corporate Head – Marketing, DishTV & Watcho Sukhpreet Singh says the company has always seen itself as a content aggregation and distribution platform. "OTT aggregation is a natural extension for us to provide content that consumers want to consume. We want to provide content that consumers want and on the device of their choice. We have to pivot ourselves according to the latest technology and consumer behaviour."

He also said that the subscription market for OTT platforms will expand due to the entry of well-entrenched DTH players like Dish TV. "Our traditional business has a huge reach on both digital channels as well as retail stores. We will help OTT platforms to access new markets and expand the reach for pay OTT," Singh explained.

A veteran TV distribution professional said OTT aggregation will be the next big focus area for every pay-TV distribution platform in the country. "The linear business continues to decline due to competition and regulation. Therefore, every distribution platform will look at aggregating OTT apps just like they aggregate TV channels from multiple broadcasters," he noted.

OTT aggregation to cannibalise pay-TV base?

While there is apprehension that the OTT aggregation service might lead to the shift of customers from DTH to OTT, both Kumar and Singh believe it will help DTH operators to retain customers under their fold. They also pointed out that the audiences for TV and digital are different. While linear TV is viewed by family audiences, OTT is more of an individual viewing experience.

"There is a possibility of OTT aggregation service eating into our DTH base but the overall pay-TV market is expanding. There are a lot of consumers who are buying a TV set for the first time. They will want to watch content on their TV screens. Then, in the middle, there are hardcore pay-TV subscribers. In the upper middle and top levels, there is always a hybrid consumption. At the very top end, there are pure OTT consumers who are cord-cutters. In India, there are different consumer psychographics in each household," Singh explained.

On the possibility of the OTT service cannibalising the pay-TV base, Kumar said, "We don't look at it as a zero-sum game. A bulk of OTT consumption still happens on mobile. On TV, a bulk of consumption happens on pay channels whereas a large chunk of content on OTT is free. Both these categories are complementary rather than competitive. The only difference is that one service is growing faster than the other."

As per the Telecom Regulatory Authority of India's recent Performance Indicator Report (PIR), private DTH players had lost 1.6 million paid active subscribers in Q1 CY2022 compared to Q4 CY2021. The total active subscriber base of the pay DTH sector had dropped to 66.92 million in the JFM quarter compared to 68.52 million in the OND quarter.