This year can bring huge mergers of entertainment businesses that can prove to be game-changers for the industry. Two giant unions—Zed with Sony and Reliance-owned Viacom18 with Disney India—are in the pipeline for 2024. These two can create a huge impact in the business world.
Mumbai is a major hub for the entertainment business. Now, the entertainment industry is facing a lot of trouble. Questions like: Will 2024 be a year of mergers for broadcasting companies? Or will over-the-top (OTT) video streaming services successfully run their businesses or end up suffering losses and paying revenue to technology giants? are arising these days.
In an exclusive conversation with Mumbai Live, Rohit Raj, Founder of BBKiVines Productions spoke about business mergers being a good option. “There are people who are running businesses all alone, but there are people who require mergers so that they can recover losses and make the business work. So if the merger nourishes the company and one invests wisely, then it's good for all,” he added.
The OTT market is not making huge profits as of now because content costs have escalated. But, with business mergers, there is some scope for stabilisation. Apart from business mergers, Rohit Raj opined that some changes should be made in the market as the situation has changed since COVID-19 ended. One should pay reasonably so that they do not waste funds and can make more shows or more content.
Explaining further, Rohit Raj said, “When OTT flourished pre-COVID and around COVID-19, there were a lot of people who bought subscriptions, and now there are many people who go to cinemas or watch content on TV, as well as on OTT platforms. So accordingly, some corrections should be made in the market. Earlier, the global giants were paying big checks for people to come to their platforms. Now they have all established firm ground. Now they should not overpay any technician, crew member, cast member, or anyone else to make a show. In a sensible business way, one should spend only as much as the business requires. If you keep overspending, then you will never be able to recover losses.”
According to the Ormax Media Report, India has 481 million OTT users and 102 million active paid subscriptions. Mumbai, Delhi, and Bengaluru are the top three cities where people have paid subscriptions to OTT platforms, with more than six million active paid subscriptions each. In 2021–22, the growth of OTT users was 34%, but in 2022–23, there was only a growth of 13.5% in OTT users and subscribers.
Sharing more about how audience growth can impact the entertainment industry's OTT business, Rohit Raj exclaimed, “I think we are still in the beginning stage. People are still learning and getting on the OTT platforms by subscribing. In the next five years, we'll get to know the true potential of subscriptions and the money that can be made through subscriptions. As of now, I suggest that entertainment business owners invest an amount that they can recover through subscriptions or via ad money.”
Experts further stated that most of the OTT platforms are trying to lure tier 1 and tier 2 audiences and are focusing a little less on tier 3 audiences. Once they go deep into the roots and generate an audience from every locality, businesses might witness change. Countries like India, which have huge populations, have a huge base of subscribers as well. Hence, OTT firm owners come to these countries to grow their user base and generate more revenue to run their businesses.
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