JioCinema’s ultra-cheap subscription plan likely to expand India’s OTT universe

JioCinema’s latest move to host some local-language content under an ultra-cheap ₹29 monthly plan has the potential to widen India’s OTT market and prompt the fence-sitters, especially in small towns, to embrace the streaming universe.

Without competing for the wallets of existing Netflix or Amazon Prime Video subscribers, JioCinema's offering could be an additional option for new and old viewers. However, the success of the strategy would hinge on the content slate of the platform, according to media industry experts.

Late last month, Jio Cinema said its premium plan will include ad-free content across languages, including original series, movies, children's shows and TV entertainment on any device, including connected TV sets, for  ₹29 a month. The company will also offer a family plan for  ₹89 a month that will allow users to stream content on up to four devices simultaneously. 

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While sports content, including the ongoing Indian Premier League (IPL), and some entertainment programming, will remain available for free as part of its ad-supported offering, the new ad-free plans will cover original series and movies streaming post theatrical release. Last year, JioCinema had rolled out a  ₹999 annual plan for ad-free Hollywood content and ad-supported local-language programming and sports.  

Tech an enabler

JioCinema did not respond to Mint’s queries on the likely repercussions of the new plan on the streaming ecosystem in India. However, speaking at AVIA’s Future of Video India Summit last month, Kiran Mani, chief executive officer, Viacom18 Media Pvt Ltd, said the company’s hope is that technology can be an enabler for as many Indians as possible to have access to premium curated content experiences. 

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“If digital media is simplified and (becomes) a daily habit area, there is adoption for all kinds of content waiting to happen. There is a very well established large screen viewing habit in India. Sports was our first foray, entertainment is the next,” Mani had said. He added that one of the firm’s core strengths is that its content slate caters to every sliver in India via sports, family, kids and Hollywood portfolios.

“When you want to build a daily viewing habit, quantity becomes important. There is a price to everything, too many ads cause friction. There are some forms of content where customers complain about ads being too intrusive. That is why we came to this differentiation,” he said, referring to the new pricing plan.

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To be sure, media industry experts point out that JioCinema has been a late starter as far as launching local language originals in India go. “At a time that all other rivals have already introduced premium content and most users have an average of two OTT apps on their mobile phones, it is an uphill task to get into the consideration set of viewers. However, with a ₹29 plan, nobody is likely to argue (on pricing) and it will expand the country’s OTT market and the overall number of paid subscribers could increase,” Uday Sodhi, senior partner, Kurate Digital Consulting, said.

Quality content 

The platform may have removed the friction on price that many consumers grapple with, but the challenge going forward, will be of producing top-quality content. Else, it will struggle with few subscribers and a low price point. “Being less than one-fifth the price of rivals also means that it needs five times the number of paid subscribers,” Sodhi explained.

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With a ₹29 monthly plan, the platform is hardly trying to poach the subscribers of rivals like Netflix and Amazon Prime Video, according to media industry experts. “The idea is to simply add another service to the monthly budget of consumers and get people accustomed to OTT. The platform is clearly playing a volume game and already has the advantage of distribution reach from a broadband standpoint (thanks to Jio’s telco plans),” Mehul Gupta, co-founder and CEO of digital agency SoCheers, said.

To be sure, while the platform is expected to eventually raise prices, media industry experts say the volume approach will gradually give way to profitability as advertising revenue is supplemented with paid subscriptions. 

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Video streaming platforms in India are increasingly looking to augment their SVoD (subscription video-on-demand) offerings with AVoD (advertising video-on-demand) programming, having realised that the hybrid model works best for price-sensitive consumers in India, according to a Deloitte report.

Revenue to grow

SVoD revenue in India is expected to grow at a CAGR of 19% to reach $2.9 billion in 2027, from $1.2 billion in 2022, while AVoD revenue could increase from $1.15 billion to $2.42 billion in the same period, at a slightly lower CAGR of 16%, the report said.

“JioCinema, with its competitive pricing, may target smaller towns to get to the next phase of their SVoD growth and at the same time keep viewership high among the metro audiences through premium content (such as international shows from Peacock, HBO and so on). So, the pricing strategy acts as a push to penetrate deeper into Bharat as well as among the more affluent metro users who subscribe to more than one OTT platform,” said Nikhil Kumar, chief growth officer at mediasmart, a programmatic advertising platform.