With regional OTT platforms gaining popularity in the last few years, brands see this arena as a good opportunity to grow their businesses, say experts.

Deloitte in a recent report said, “OTT accounts for 7-9% of the overall media and entertainment industry (in India), and this share will continue to accelerate in the foreseeable future. In addition, India’s OTT market revenue was about US$2.35 billion in 2022 and is expected to reach almost US$5.3 billion by 2027.”

Telugu OTT platform aha, launched in 2020 amidst the pandemic, now has 12 million monthly active users (MAU) as of February 2023. Bengali OTT player Hoichoi saw a rise in MAUs by 40%, and 30% growth in its international user base, as per recent reports.

Gujarati OTT platform Oho, launched in 2021, and Odia OTT platform AAO NXT have also gained popularity.

So, should brands look at regional OTT platforms for advertising and marketing opportunities?

OTT as Business Platforms 

Manika Juneja, Managing Partner, Dentsu Creative India, says regional OTT consumption is expected to cross by approx. 50% in the next 3 years. “The rising trend is a testament that regional OTT players will give stiff competition to national and international competition. It attracts regional and national brands who want to connect with the right set of TG that prefers vernacular content. An evolving symbiotic relationship will be witnessed between brands and OTT players, specifically the regional ones.”

Juneja also says that the biggest advantage that regional OTT platforms hold is the understanding of the local market and audience, which results in the effectiveness of the campaigns for the brands. “Simply put, it avoids spillage in ad spending. Content consumption is largely preferred in the local/native languages and the platforms are investing in the original content in the regional languages, which gives them an edge to target not only Indian residents but also the ones sitting across the globe who love to consume native content in their mother tongues.”

Aha’s Head of non-subscription revenue, Nitin Burman, says, “As far as aha is concerned, we give multiple avenues to brand to engage with the consumers. We have brand solutions creative team which integrates brands seamlessly in our shows. We create single/multi-brand AFPs, which are relevant for Telugu audiences.” 

aha creates brand films/ad films and has launched an impact property vertical, Burman further shared. “This will further allow us to give on-ground reach to brands apart from getting showcased on live streaming. We have strong social handles and a YouTube channel, which also gives extra reach to brands, and we are now developing a Meta version and short-form platform for aha that can be monetised as well.”

Divya Dixit, a business growth and strategy advisor with expertise in television and OTT, says the regional market has the most promising growth rate in the Indian OTT space right now. “As per a recent FICCI EY report, the share of regional language content on OTT will be 54 per cent by 2024. This figure in itself showcases that the regional market is perhaps the best space to experiment with AVOD and SVOD business models as well even for the dominant international and established national players. The simple reason is content relatability and stickiness due to storylines and language sensitivity to the local market.” 

What’s the competition 

Karan Taurani of Elara Capital believes regional OTT has to pick up in terms of scale as they can't move beyond a certain region or state. “That's primarily because of the language issue. So, platform business is a very high capital-intensive business, it's very easy to make an app basically, but the cost around it, around customer acquisition, content, tech, distribution, those are the key elements, which actually define the success of a platform. 

So, these regional OTT platforms, definitely, have seen better growth but it all comes at a very low pace. If you look at the overall market dynamics today, in terms of AVOD and SVOD it is heavily dominated by the global giants. The advantage these platforms have is that they have a backing of content where most of these owners have been making regional content in the form of TV and other content TV shows, for a long time.”

Juneja says the main issue that these platforms should be able to solve is investing in content to keep the audience engaged. “Due to the constantly changing patterns of content consumption in the OTT market, building platform loyalists is challenging. Considering the fact that national and international players are also investing heavily in vernacular content, regional OTT platforms must tackle the issues of data layering, targeting options and reach. The ones with the stronger tech and audience will win the race.”

Way Ahead 

Karan Taurani believes an aggregation model where you will probably have all the regional OTT platforms under one umbrella can help. “I don’t know how tough or easy that would be in terms of coordination, because there are issues like who would keep the dollars or who would keep the ad revenues and how the share will be divided. Moreover, they will have to piggyback on the success of global giants because that will allow them a big reach in terms of audience.” 

As for Divya Dixit, regional players need to use their niche audience to their benefit. “Since they have a dedicated set of viewers, they can easily look for local players or brands and have business relationships. This promises investors a higher conversion rate as compared to a mass audience consumption of an ad film.”

She also opines that they need to showcase their advantages and let the locals know of the business promises that their platforms carry. “Perhaps carrying out a detailed study comparing the conversion rates of regional vs some other platform can be one way to do so. They need to be vocal about the kind of revenue they can generate as their audiences hold them close to heart, which may not be the case with some of the biggest OTT players in the market today, both domestic and international.”