Is VOD without YouTube a profitable venture for content owners?

While YouTube continues to gain markets and increase its share in the overall online video content distribution in India, there are voices in the content industry that resonate every single day and talk about a no-YouTube strategy.

Creators are talking today about content which is ‘exclusively for web’ or digital but then does it support their business? Well this is quite debatable and every creator has his own point of view.

First of all let’s divide the creators into two groups; one a Production House and the other an Independent Creator.

For Independent creators YouTube makes complete sense because you get free storage, free CDN, hassle free ad serving and the creed that wants your type of content. The tradeoff of revenue shares with YouTube and dependability on actual revenues might still be fine because potentially the production costs are lesser and you get your ROI. (Until and unless you are not an AIB or TVF and have to depend on funding’s to cover your high production costs. Same holds true for most of the MCN’s also)

Now talking about larger production houses in India the content is generally TV or Film programming which they are syndicating as VOD on YouTube. This is just another revenue stream for a production house (or broadcaster) and this revenue is like free Beer with a seven course meal!

Still they suffer the pain of the revenue share and most of them go with a VOD portal of their own while just giving away glimpses of content on YouTube. Even if an owned VOD platform is not making any profit, the big guys might possibly say something like this between the lines:

• It is a part of the bigger story; even if we are not making any profit; we have to do it for the brand
• We will break even in the next 5 years. Right now we are just spoiling the audience

An owned VOD platform has a lot of cost heads; storage, CDN, encoding to name a few. And if you are an aggregator the revenue shares and MG’s to content owners will surely give you nightmares

The reality with TV and Film content in India:

• TV is dirt cheap in India and doesn’t seem like online will overtake it in a decade.
• You need to focus on NRI audience and strategize around it because masses in India is not going to watch movies and TV shows online… 4G 4G where are you???
• Long form content online is not the flavor of India and people would always go back to Television for this.

With a lot of players now in the market like HotStar, Ditto, Spuul, Eros Now; the competition seems to be perfect but are they making money is a question that needs to be answered.