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Are OTT players finding a sweet spot for pricing?

Major players have launched new packs and are revised the pricing of existing ones

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KOLKATA: A recent report from Kantar spoke about the massive surge in SVoD growth in urban India. Hence, it is clear that Indians have started loosening the purse strings for premium online content. As there is no single right pricing for a diverse audience, OTT players are adopting innovative pricing strategies. Experimentation in subscription packages seems to be the latest trend among both international and homegrown streaming services. However, they might have found a sweet spot below Rs 500 to woo the users, at least for now.

Streaming giant Netflix has become more aggressive about international markets since its growth in the home market started saturating. Realising the nature of the local market, it ignited the experimentation with pricing last year while announcing the Rs 199 per month mobile-only package. The platform recently started testing a low-cost HD plan at Rs 349 per month which allows accessing the service on a mobile, tablet, laptop and desktop but not on TV. If Netflix rolls out the subscription plan, the platform will have plans ranging from Rs 199 to Rs 799. Nevertheless, it remains most expensive among all players. 

On the other hand, ZEE5 has also taken a creative stance to lure in and hold on to subscribers. It has launched ZEE5 Club at Rs 365/year. It offers exclusive access to most popular shows before telecast on TV, ZEE5 originals apart from select ZEE5 and ALTBalaji shows, blockbuster movies, ZEE Zindagi shows and several live TV channels. Significantly, it comes at almost one-third price of its premium pack.

“This is a fabulous time for consumer acquisition both from getting people on OTT platforms as well as to convert from free to subscription. Typically, water is being tested around different pricing. If you ask Hollywood or western content, you are being priced at a certain level. The OTT platforms are offering premium Indian content at Rs 300-400 range. Most players are staying in that range because that range seems suitable for acquisition,” Deloitte India media and entertainment partner and leader Jehil Thakkar said. He also added that it creates a psychological barrier beyond Rs 500 while below the range of Rs 300-400 it would be possibly considered too low.

The leader in the pack had slightly altered its pricing during the rebranding of the service. While Disney+ started its journey in India, it also launched Disney+ Hotstar VIP plan at Rs 399 per month which does not give the user access to the platform’s entire library but to movies like The Lion King, Frozen II, Aladdin, Toy Story 4, and several others along with Bollywood movies and Indian content. Initially, Hotstar VIP was priced at Rs 365 annually.

However, SonyLIV has significantly increased its pricing. The platform which refined its service recently with a new logo and premium originals took up its monthly plan to Rs 299 from Rs 99. It also increased the value of its other packs. 

PwC India Entertainment partner media and sports advisory leader Raman Kalra says that some OTT players had packages below the bracket of Rs 300-400 and some with a much higher package, but now the middle range is becoming the sweet spot. He also mentions that it is the beginning of a series of price experimentation. Thakkar also says that as the major players are now in customer acquisition spree, competitive pricing will continue.

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