Will OTT Platforms form the new marketplace?
Updated: Sep 4, 2021
The Covid-19 pandemic worldwide induced a surge in demand for OTT platforms in India. While the practice of watching TV shows and movies via these platforms has been building since 2015-16, the pandemic ushered in a whole new audience, with OTT platforms seeing a 30% increase in paid subscribers over the last year.
Another industry that has seen an exponential increase in popularity has been the e-retail market in India. With e-retail giants such as Myntra registering a 58% jump in revenue in 2020, e-retail became the primary channel for shopping instead across most of the Indian population. Monumental growth across both these platforms can bring forth a new concept to online shopping: Shopping on marketplaces created by OTT platforms.
This concept, where OTT platforms like Netflix, Amazon Prime, Hotstar, Voot, SonyLiv, etc offer outfits worn by characters across their flagship shows (or shows where fashion is a major aspect to storytelling) on their platform, either as a marketplace or as a storefront. As a marketplace, OTT platforms develop an IP of these outfits worn by each character which is sold to the audience on the platform. As a part of this business model, OTT platforms can partner up with designers to style characters on a few of its flagship shows/movies, giving them an IP to outfits worn by characters.
As a storefront model, OTT platforms can segregate outfits worn by characters on shows/movies and develop a Shopify-like structure and provide links to buy the outfits worn and earn a commission from the manufacturers.
"OTT Platforms can partner up with designers to style characters on a few of flagship shows/movies, giving them an IP to outfits worn by characters"
During our podcast (to be released in August 2021), we deep dive into this emerging concept and detail out the advantages and pitfalls of this platform in India. One of the main discussion points is that how India, with its telecom disruption in 2015 of affordable data plans, has a unique position to develop a wide customer base for OTT platforms.
Affordable data plans across have increased the internet penetration rate to 90% across all urban and rural areas in the last 5-6 years and have increased the smartphone penetration rate to 51%, and an est. of 820 mn smartphone users are expected by 2022. In response to this, OTT platforms started catering their business model to Indian audiences across Tier 2/3/4 towns and rural areas by offering affordable rates for their plans and developing a variety of regional shows across multiple languages.
We discuss how this penetration in the market has enables these platforms to capture a wide audience and how this can be leveraged by trying to sell outfits worn by characters across their content to the customers since there has been a demand from audiences for a platform that features the exact outfit worn by multiple characters across multiple tv shows/movies.
This model as a concept is in its very nascent stage but has gained some traction in the last few days, with Netflix tying up with Shopify globally to sell merchandise for its original content. Amazon Prime is also set to jump on this bandwagon to become a one-stop shop for all OTT content and e-commerce in India, trying to leverage its deep penetration into Indian households (~64%). Additionally Amazon Prime can leverage its vast pool of internal data consisting of consumer's shopping and watching habits, curating and creating content specifically for a faction of consumers and dictating their buying habits.
While the recent development seems to be focused on solely selling merchandise of a popular tv/show movie, this concept could revolutionise the way we shop, by basing our tastes and styles through the content we consume. However, this model could also come off as another infomercial, gimmicky concept if not marketed well and how it will fare in the next 5-10 years, that's yet to be seen.
The Ken: Amazon Prime Video’s attempt to become the everything store for Indian streaming
New York Times: Netflix: The Store!