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Local OTT platforms battle rising costs of production

Bills are mounting as actors, writers and directors charge more as bigger platforms pay more.Social distancing and other covid-led safety norms are adding to costs of production
Local OTT platforms battle rising costs of production
Small homegrown platforms invest 3 crore- 4 crore per season compared to 40 crore- 50 crore of top foreign OTTs
  • Lata Jha

  • LiveMint

Last Updated: 09.57 AM, Aug 02, 2022

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The streaming business is getting expensive for homegrown over-the-top (OTT) video platforms competing for eyeballs with well-funded global companies such as Netflix, Amazon Prime Video and Disney+Hotstar.

While American firms with deep pockets have kept pace with the rising costs of producing web originals, smaller OTT platforms said it is a challenge considering the mounting bills as actors, writers and directors charge more and more as bigger platforms loosen their purse strings. Viewers, too, expect superior quality, requiring higher investments.

“With production costs on the rise, one challenge we are faced with is justifying every piece of content that is on the platform. So, we are extremely picky with what we greenlight. Until and unless we feel there is an X-factor to the project or the required strength to provide audiences with quality entertainment, we abstain from it,” said Soumya Mukherjee, chief operating officer of Hoichoi, a Bengali platform.

Smaller homegrown platforms invest 3 crore- 4 crore per season compared to 40 crore- 50 crore of marquee shows of foreign players. The key is to remain hyperlocal and woo audiences speaking a native language with strong, nuanced stories, said industry experts. Furthermore, they are tapping talented newcomers who are prepared to settle for lower remuneration.

“A lot of inflation within the OTT industry is demand-led,” said Ajit Thakur, chief executive officer of Telugu service Aha Video. “Catering to a wider audience base requires making content consistently.”

“We may not be looking at many high-budget shows but we bring out small and medium-budget shows frequently and have found partners in the industry thanks to our local positioning and reach,” Thakur said. “The budgets of some shows commissioned by foreign OTT firms are unsustainable.”

“Costs are based on demand for stories,” said Sandeep Bansal, the managing director of Chaupal OTT, which streams Punjabi and Haryanvi content and is launching a Bhojpuri web show. The company is working on large-scale productions, Bansal added.

With social distancing and other covid-led safety norms, smaller platforms are battling rising production costs, with productivity still at 70% of pre-pandemic levels, said Sanjiv Jaiswal, founder of Baba Play, a service centered on Ambedkar’s Dalit ideology. “Many artistes are not willing to compromise (on fees) so we try and work with those who we have a better understanding or we have worked with in the past.”

There is no dearth of acting talent for OTTs and there will be multiple takers for any opportunity, said Akshay Bardapurkar, founder of OTT platform Planet Marathi, who has upped his own budgets from 50 lakh per season to now 2 crore- 5 crore. Other than rooted, hyperlocal content, Bardapurkar said it is important for regional platforms to invest in marketing and promotion, besides distribution tie-ups with telcos and aggregators which bring them good revenue.

Bigger OTT players get strong support from their parent group that gives them access to a larger pool of funds and dedicated in-house content development teams, said Indrajeet Mookerjee, managing partner at media agency dentsuMB India and regional players primarily prefer outsourcing production while maintaining a strong hold on the final output.

Sidharth Singh, co-founder of marketing agency CupShup said there is sizeable Indian diaspora that yearns local content and these OTT platforms stand out on that front.

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