Hotstar – the Next Netflix of India?

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3.Company

Hotstar, the new yet popular baby in the Video-on-Demand (VoD) block does indeed have a behemoth as its parent - Star India, which resulted from the corporate restructuring of Star Asia (in 2009). Star India boasts of a portfolio of 58 channels in 8 local languages. If that alone was not enough, Star India itself is owned by 21st century Fox, the American mass media giant. While a being a part of such a vast family has its monetary, technical and business benefits, it also has to be careful of the mistakes Star India made previously- In 2007, when Netflix started its streaming operations in the USA, the then Star TV India launched two Video portals “Indya on Demand” and “Video on the Rocks(VOTR)” hoping to garner its own set of loyal customers. While VOTR was supposed to build up on Premium Content, “Indya on Demand(IoD)” focussed on full-length TV Shows. “Indya on Demand” was essentially free, supported by the revenues from VOTR, which was supposed to be monetized with advertisements. VOTR would not only feature bits-and-bytes of “IoD”, users could also upload their own content, subject to copyright restrictions. With these platforms, Star India hoped to build a ‘Youtube’ of its own. But the initiatives failed to gather enough sustainable traction. Unfortunately, both these ventures had to bite the dust.

But as it often happens in the business world, whatever becomes defunct does not necessarily stay dead. Indya Interactive Services Private Limited, the company which spearheaded Indya on Demand, shed its scales and was reborn as the Novi Digital Entertainment Private Limited, a wholly owned subsidiary of Star India, which presently owns Hotstar. Meanwhile, Star India launched two more video streaming sites: StarPlayer.com (for TV shows) and StarSports.com (for live- streaming of sports events on payment). Though Star Sports continues its operations, Star Player has been subsumed into the Hotstar platform to avoid cannibalization.

In an attempt to leverage the growth of smartphones and mobile broadband, Hotstar was launched in January 2015, just one month before the start of the ICC World cup, 2015. Their initial plans to stream the cricket match live with sparse entertainment content was soon buttressed by many more hours of entertainment and sports content spread across 8 languages and borrowed from Star India’s rich library.

Hotstar’s offerings has three basic parts:

1 . The Hotstar App : to be downloaded from the Google Playstore or the Apple iTunes for free.

2. The Content (free offerings) :(a) Shows and movies in Hindi and Regional languages drawn from Star Network & Affiliates,(b) Sports from Star Sports,(c) Infotainment channels like Foxlife, NatGeo,(d) English Movies and TV Series,(e) Original Shows like AIB.

3. The premium membership: For a select few English movies and TV shows and series, it asks the user to pay INR 199 after a free trial period of one month.

The obvious Question arises: How do they make money? Hotstar started with the Advertisement Video On Demand (AVOD) model. It offered the advertisers slots of 10 secs, 30 secs to 60 secs for a charge. The users of the free content (offering 2) would have no choice but to watch the advertisements. The adverts cannot be skipped or removed in the free version. In tandem with the most awaited TV series “Game of Thrones”, it launched the premium membership where the entire sessions of videos are essentially ad-free.

Thus began Hotstar’s shift from an AVOD model to a freemium model.

4.Collaborators

“We are only as strong as the allies we make” – the old adage holds true even in today’s business environment. Hotstar is truly blessed on that front. With the new trend of advertisers taking a digital route than the TV commercial route, Hotstar has garnered the support of some of the biggies of the industry who entrusted Hotstar with the digital rights for their events.

For the development and maintenance of the Hotstar app, Novi sought the support of Accenture. Accenture Video Solution (AVS), a cloud-based system, is well-reputed for its modular, scalable and agile platform that can adapt to any contingency that might hamper the delivery of its services. Besides, its analytics and configurable user- interface helps Hotstar to find the right advertisement and seamlessly convert back and forth between the video and advertisement interfaces. This is of prime importance as Hotstar allows the user complete navigability over the videos they watch in the free version but no control during the ad interval where they cannot even skip the ads. This relationship between Star India and Accenture reached a peak with Hotstar being awarded the prestigious Accenture Customer Innovation Award.

However, Star India did not opt for the PowerTest module of Accenture. Instead, it chose the Tata’s Testing Services to add to the reliability and value they want to commit to in the long run.

Star India, being the official sponsor of Indian Cricket Team, has helped Hotstar to build strong ties with the International Cricket Council (ICC). Hotstar has been chosen as the digital partner for any ICC related event in the Indian sub-continent. This means it can channelize the needs of the on-the-go customers and capture their thirst for uninterrupted Sports content.

Hotstar leverages the services of smaller intermediaries like Mediaant.com to invite banner ads from smaller players into its platform. However, corporates like PepsiLays, Tissot ,Hero, Accenture , Lufthansa and monster.com take a direct advertisement route. This helped Hotstar to get enough advertisement repository during the ICC World Cup 2015.

One of the benefits of being a part of the Star Network is that the content from Star Plus, Star Utsav, Asianet, Star Vijay , Star World,Life OK, Star Jalsa, Maa, Star Prabha, Channel V, NatGeo, FoxLife and Star Sports are easily available.

But the target segment of Hotstar has a huge appetite for American and British shows as well. To ensure it does not lose out on this segment it made a strategic partnership with HBO for the HBO originals. Hotstar is the only digital platform that has legal and valid digital user rights certified by the HBO authorities.

5. Competition

Netflix, which is a globally recognized video on demand streaming platform, is one of the main competitors of HotStar. It has carved a niche in the segment by expanding its presence over 130 countries. Netflix allows users to stream