Is it the end of the road for live news on OTT?

With the ambiguity surrounding intermediary guidelines and the FDI in digital news, several large OTT platforms are planning to remove live news channels from their platform. SonyLIV has already initiated the move by pulling down their news bouquet. 

The intermediary guidelines call for OTTs to classify content based on age. But the platforms contend that the regulation is silent on live news feeds, which cannot be classified. Further, the platforms have no control over the content that is transmitted through live news channels. 

The other reason why OTTs have done away with the news bouquet is the 26% FDI limit in digital news, which they believe is also a grey area. 

The move to remove live news has raised questions about whether the platforms have anything to lose. Since the category had a negligible impact on the viewership as well as revenue, experts say that OTTs can afford the decision. 

The streaming players have lakhs of hours of on-demand entertainment content, which drive consumption on the platform as well as ad and subscription revenue growth.

While the news is an important category, the OTT platforms are not too concerned since it is not a driver content for them when it comes to viewership. Its impact on OTT revenue is even less.

Interactive Avenues EVP Harish Iyer said: "None of the OTT guys were depending heavily on news that much and the kind of traffic that news generated for them was less than 10%. It's not going to impact anything. Will there be a revenue hit for OTT platforms? I don't think so.

"With the amount of content that resides on their platform, I don't think anyone is able to monetise more than 35-40% at best. News going out will not pinch but will allow them to save some licence fee."

According to Iyer, linear channels had a different understanding with different OTT platforms. "Everyone was operating at a different understanding with linear TV guys. Some OTT players would opt for a clean feed and on that clean feed, they would insert their advertising using technology by players like Amagi. Some of them were not giving clean feeds so they were deprioritised from being easily discovered on the platform," he noted.

A digital media expert said that the OTT players would not be paying more than a couple of lakhs a month in licencing fee to news channels. He further added that one of India's topmost news networks was not getting more than Rs 35 lakhs a year from individual OTT platforms and they were not available on more than two or three OTT platforms.

"I think that a single OTT platform is not spending more than Rs 5 crore per year on news. That amount would be spent on multiple channels across languages. Disney+ Hotstar and SonyLIV don't have a presence in the news so they would have to spend more than other platforms like say ZEE5, which has in-house news channels. Other smaller OTT platforms will not be spending much on news," the expert said.

Since most news channels are free to air (FTA) they don't have the pull to get subscription income. "TV news is an FTA business. News cannot be monetised on OTT beyond the licensing fee. Even from a viewership point of view, the news genre is not more than 10-12% of the overall viewership and the peak time is only for an hour. Monetisation is significantly smaller," the expert said.

The fragmentation of news viewership is another area that bogs down the category. "News is fragmented and doesn't have the ability to get significant revenue from digital. It doesn't impact OTT at all. Despite being a grey area, OTT platforms are removing news since it doesn't impact their business. For them, entertainment is much more significant business to be taken care of," the expert averred.

He feels that the focus area for all OTT platforms is to comply with the new IT rules rather than focus on live news. "Rather than getting sandwiched between news and OTT regulation they are saying 'let's focus on OTT regulation'," he noted.

The growth in the volume of entertainment content has diminished the value of news in the overall scheme of things. "Three or four years ago, news was important because there was only television content on OTT. But now, the volume of entertainment content has gone up significantly between original and acquired content. So news has become a very small segment for OTT platforms," the expert said.

According to the revenue head of a leading OTT platform, even if OTT players are investing in live news, there are a lot of challenges as far as advertising is concerned, which is why there is not much demand for it. Some of the deals between OTT and news channels are pure licence fee deals while some are on a revenue share basis.

"The intermediary issue will lead to the untimely demise of live news. No one is even talking about it. News is not the core of any OTT platform. It might be important for players like YuppTV. The consumption of news is very low at 9-10%. Over and above that, we cannot serve ads on live news because programmatic ads cannot run on live TV. On the video, programmatic ads have the highest demand," the source said.

Uday Reddy, CEO of YuppTV, which aggregates and distributes 58 news channels to subscribers in India and abroad, said, "News is an important category on OTT. We are mostly aggregating broadcast news channels and have seen good traction. We will continue to have live news on our platform as it drives traffic. Audiences that are shifting to digital also want to consume news on OTT."