Piracy continues to hit OTT revenues, subscriber growth

Recently, it was discovered that programs like scam 1992, rocket boys Y ashrama, were circulating on torrent sites, fake websites imitating OTT platforms, and on Telegram within hours of launch. Piracy challenges have worsened with the growth of the digital medium, even as services take steps to encrypt and watermark content, they added.

A report by data analysis and research firm Ampere said film and TV piracy in India resulted in a loss of $2.3 billion in revenue in the past year. “There is no denying that hacking has always been a challenge and all OTT platforms bleed a lot. We can test as much as we want, but there is always someone who cracks a code and it has an impact on a big part of the business, especially for original shows," said Saugata Mukherjee, SonyLIV's head of content. Web originals may be hack within an hour of release, and many shows are seen more on illegal platforms than their own service, he added.

The COO of Bengali streaming service Hoichoi, Soumya Mukherjee, said that all video-on-demand services are surviving on subscriptions as the source of revenue, but with an increase in piracy, revenue is directly affected. Platform titles like Mohnagar, The throne Y srikanto They are circulating on hacked sites.

“Another layer of pushback occurs when audiences opt for pirated sources, because my team can't understand content consumption patterns. A title may have performed better or a genre may be really popular, but if non-subscribers or existing users opt for pirated options, the data is corrupted, helping us understand what kind of content works. It affects decision-making in terms of production and procurement."

Hacking has been on the rise since the OTT boom in 2020 and 2021, but there was a substantial increase in 2022 as people became more aware about hacking websites, Hoichoi's Mukherjee said.

Piracy takes away the revenue opportunity for AVoD, SVoD and TVoD, said Gautam Talwar, MX Player's chief content officer. “If you don't watch content on the original platform, all revenue is lost. Once a show is watched, it has little residual value or monetization opportunity because consumers are after shows, not platforms," ​​Talwar added.

He added that the original platform ashrama has been hacked despite being available to watch for free on MX Player. “Now that we have a subscription model, MX Gold, we can see how it affects revenue and potential growth opportunities for the platform,” Talwar added.

While the larger urban population may not be consuming pirated content, the phenomenon is quite rampant in tier two and three cities. "The lower end of the audience can find pirated content easy to access and view and this is why many OTT platforms have been unable to scale in India and ARPUs have grown beyond a point," Karan Taurani, SVP. said the president of Elara Capital Ltd.

Chandrashekhar Mantha, Partner, Deloitte India, who agrees that OTT platforms lose almost 25-30% of their revenue due to piracy, said content can be leaked any time after the final master copy is complete. edited until OTT uploads the content to their servers. “This seriously hurts the platforms, as pirated content may be available before its release date. OTT platforms can use technology for watermarking, digital rights management, secure hosting, encryption, and better controls over the journey of content before final upload for release," Mantha added.

Vivek Couto, managing partner and co-founder of independent research and consulting firm Media Partners Asia (MPA), said online piracy and content theft remain alarming in India despite improved windows for content distribution: it is detrimental to sports and entertainment owners with a negative impact. for the local creative economy.

Zubin Dubash, director of digital business operations at Shemaroo Entertainment, said that the platforms are well prepared to combat the impact of piracy on OTT revenue and subscriptions. "We have teams and processes in place, and the best part is that consumers are realizing that paying for legitimate content means getting better entertainment on a platform they patronize. Piracy has also turned the tables on platforms reconsidering their prices with different packages to make it more affordable and prevent consumers from falling victim to piracy," added Dubash.