Transformation of Media and Entertainment Industry: Identification of Most Important Factors in OTT Consumption

Purpose: The main goal of this study is to gain insights into the OTT (over the top) landscape within the Media and Entertainment (M&E) industry, with a focus on uncovering the factors that influence consumer engagement. Additionally, the aim is to compile interconnected elements that affect the mindset of OTT consumers. There is fierce competition in the dynamic Indian market of OTT platforms, and dearth of studies focussed on understanding the factors that drive the membership subscriptions, customer’s long-term association and creation of life-time value and involvement in word of mouth. This can help in formulation of right kind of strategies for seeking and retention of customers. Design/Methodology/Approach: A questionnaire-based survey was undertaken to comprehend patterns of consumer engagement. Exploratory factor analysis was employed to investigate the connections between variables, deliberately avoiding a predetermined fixed number of factors. Findings: The study gave us three complex factors which can guide us to design the right marketing strategies. Practical Implications: The primary objective of this study is to pinpoint the combined factors that influence media consumption via OTT platforms. This identification aims to assist stakeholders in tailoring content and marketing strategies in alignment with customer engagement trends.


Introduction:
The global media and entertainment sector is experiencing significant evolution.Technological advancements, such as the progression from 3G to 5G internet networks and the widespread use of smart devices like phones and tablets alongside various applications, are reshaping how Indian audiences engage with television and cinema, as highlighted by Singh (2019).Moreover, the digitization of video content, coupled with the accessibility of diverse content sans restrictions, as discussed by Shin et al. (2016), has fuelled substantial growth in media consumption patterns.The penetration of mobile and internet is adding billions of new screens, hence providing opportunity to the existing as well as new entrants.The increasing demand from consumers for more tailored content experiences has spurred the emergence of innovative platforms like over-the-top (OTT), as noted by Bajaj (2020).OTT, characterized by video transmission using internet protocol across an open system (Gonçalves, 2014), has been defined Internet has changed the way media is consumed in India and world over (BCG-CII, 2017), but traditional television still remains the top most mean for entertainment consumption.Youngsters are the biggest proportion of the early adopters of OTT; it is the segment that consumes the least number of traditional media.They consume internet-based entertainment, news and do not follow the senior generation's publication loyalty (Malik, 2020).OTT video streaming is best described as 'Luxury turned necessity', perfectly global concept with highly local delivery strategies.The factors that contributed towards the exponential rise of OTT membership/viewership are smartphones and internet penetration.(Dasgupta, 2019).
According to MD & CEO of Zee5, Mr. Punit Goenke (Equity, 2019), the media and entertainment landscape in India has evolved in the last few years, empowering the consumer like never before.The media creation ecosystem and consumption pattern has completely transformed, challenging television from its top position.It is interesting to note here that most of the OTT apps are outcomes of the growth strategies adopted by the existing media houses.This concentric diversification is an attempt to stay afloat in VUCA business environment.Hence, this era is treated as an era of co-opetition, marked by the convergence of 'cooperation and competition between media and technology companies.OTT as new dimension in M&E industry is evolving every day; but there is dearth of studies in the area.The Covid'19 pandemic with global lockdown further highlighted the rise in consumption of OTT.This knowledge gap is further highlighted through review of existing literature.This paper is an attempt to answer the following research questions, with the help of a data collected through a survey with the young people.RQ1: To understand how Media and Entertainment Industry is transformed due to OTT RQ2: To study the consumption patterns of OTT among Indian youth RQ3: To study the various factors contributing towards customer engagement of OTT and identifying the most important factors responsible for it.(Nayar, 2018).Consumption of media is a complex phenomenon, result of many intertwined factors (Dill, 2013), (Valkenburg, 2016), this it is difficult to determine the role and importance of different psychological factors involved in actual behavior.Also, the line between excessive media consumption and non-problematic is highly blurred and undefined.The above-mentioned literature shows the transformation of M&E industry as a result of OTT ecosystem (RQ1) in India.As was witnessed in US, studies showed that multiple channels cable and satellite subscriptions started to decline at the same time when the sale of internet enabled Smart television started picking up (IPGLab, 2014).Today, in majority of the countries, Smart TV is challenging the cable/DTH television.The transformations within the Media and Entertainment industry span the entirety of the value chain, impacting the creation, distribution, delivery, and consumption of content by end-users, as highlighted by Netgem (2018).These changes create significant threats to the many incumbents in the industry who need to transform in order to support these new Digital and OTT models.Television still continues to rule in terms of stickiness and continuity, this is due to the age-old form of ad-supported linear programming, and is still treated as most important customer reach platform for OTTs and online business.Although a drastic decline of 37% is witnessed in the preference of media consumption on television especially among youngsters in last five years (Accenture, 2015).The media sphere finds itself in a crowded landscape, inundated with a plethora of content and applications lacking distinctiveness.However, this scenario is swiftly evolving as significant shifts occur in both hardware and software realms.The surge in smartphone usage has ushered in a new era of video consumption in India, primarily on personal screens such as tablets and mobile devices.Projections indicate that smartphone penetration will soar to 530 million by 2025, while broadband access is expected to skyrocket from the current 14% to an estimated 45% by the same year (Ernst & Young, 2016).This transformation is further fueled by the exponential growth in mobile technology encompassing devices, storage capacity, battery life, and internet connectivity.Consequently, there has been a substantial transition in media consumption patterns, moving away from traditional mediums toward digital platforms.As outlined in the India Watch Report (2018), major metropolitan areas experienced a surge in video consumption up to 3.5 times, while smaller cities with populations under one million witnessed an even more remarkable increase of 4.3 times.Tier-2 cities like Moradabad, Allahabad, Hubli, and Sonipat observed video consumption rising between 12 to 22 times higher than the national index growth.The concept of consumer involvement and its relationship with customer engagement is best explained using the temperature metaphor (McLuhan, 2014) (Bhavsar, 2018).The traditional media with no scope for active participation by consumers is considered as hot media, and the modern cluttered M&E landscape with OTT apps, live streaming and interactive experiential media is considered as cold media.This distinction offers an opportunity for advertising industry to explore the creativity supported by technical support.This will transfer the power in the hands of the customers to be part of the content, or avoid it by paying minimal amount.This is also the biggest challenge faced by marketers in the transformed landscape of this dynamic industry.At the same time, it is also the biggest opportunity to reach the customers and understand them.Marketers are cashing on this new trend, and hence are allocating a large portion of their advertising budget to digital platforms.In next five years, the digital media spending is expected to reach up to 40% of the total money spend on advertising (Karim, 2020).Today, viewers are demanding video content their way what, when, where and how they want it, and the media houses are successfully tapping this 'escapism demand'.With no law or regulatory body to check the contents offered, more and more dark content is being put in the OTT apps.(Nayar, 2018) mentioned how consumer behaviour changes in terms of diffusion of innovation theory, the study showed how the increase in number of smartphones and internet users brought drastic changes in media consumption habits of consumers around the globe.

Review of
Various media reports (Brand Equity ET, 2017) (Brand Equity ET, 2020) (KPMG, 2020), revealed however increasing digital media consumption is resulting in new patterns in consumer preference, attitude, engagement and overall behaviour.The multitude of options in web series, movies, documentaries, news, sports and many more genres, available on OTT, is fuelling this exponential growth.The covid'19 pandemic further triggered media consumption through OTT, as other outdoor options for entertain like theatres etc. were closed.OTT platforms are exactly at this chasm, which would result in filtering out of industry leaders and followers.This stage would also weed out the weaker players.Certainly, the arrival of 2020 marks the beginning of a fresh chapter in the OTT industry (The Hindu Business Line, 2018).Companies will have to refine their business models and strategies, placing greater emphasis on enhancing efficiencies by fostering collaborations and partnerships throughout their value chains.
Customer engagement, (Greenberg, 2015) is defined as, "the ongoing interactions between company and customer, offered by the company, chosen by the customer."Customer engagement plays the most important role in success of any OTT, as it is direct estimate of the degrees and depth of customer interactions against clearly set goals.It involves focussed attention, both qualitative and quantitative interaction by customers.The change in demography is also visible in the OTT engagement and consumption with India becoming the biggest consumer and producer of OTT content (Deloitte, 2017).Many studies which classified the media consumers in terms of their choices regarding screen (Dasgupta, 2019), (Park, 2019), (Lee, 2018).There are four categories of consumers: Cord Loyalist, Cord Stackers, Cord Cutters and Cord Nevers.Cord Nevers, the group of young tech-savvy adults, with fickle loyalty towards platforms for media consumption, who never bought cable connections.This is the fastest growing group in urban India, with young population joining global workforce.It is interesting to note that this rise in DTH is not actually challenge for cable/DTH providers, rather a shift of their profits from one media to other.

Research Methodology and Data Analysis:
For the purpose of answering the research questions, a questionnaire was used for a survey conducted in April to July'2020, After pilot testing with 25 respondents and also discussion with industry experts, the questionnaire with two sections was finalised, and circulated both offline and online for data collection.After cleaning of the data 374 useable responses were used out of 398 giving 93.9%rate of response.The sample size for this research and statistical analysis is 374 (160 Females and 214 Males) respondents, with highest number of respondents in the age group of 18 to 25 years.Interestingly 75% of the respondents are below thirty years of age, showing the reasons for fickleness in the consumption patterns.Figure three, below shows the gender and age-wise profile of the respondents.The Cronbach's Alpha for the questionnaire is deemed acceptable with its reliability above 0.7, and the coefficient for the questionnaire at 0.904 level is good indicator of internal reliability.The value of Kaiser-Meyer-Olkin measure of sampling adequacy was 0.853, while the value of Bartlett's test of sphericity is 0.000 (Table 1).

Table 1: Cronbach's Alpha, KMO and Bartlett's Test
The Bartlett's test of sphericity was large and the associated significance level was zero, therefore the correlation matrix is an identity matrix.The KMO measure of sampling adequacy was very high, suggesting that factor analysis was appropriate for the dataset.The following section gives description of various demographic factors, consumer behaviour followed by factor analysis.The next set of questions tried to understand the pattern of consumption.The highest consumption of OTT is during night, which also supports the use of personal phone to consume the media.Also, as mentioned in studies by Zee5, Hungama Digital Media and many others, youngsters use OTT as personal escape platform, the consumption is not done with the families or in groups.This is also visible in the increase in the number of companies offering variety of content including erotica and soft porn.Also, as a result of lockdown the consumption during commuting is very low. Figure 1 showed that various categories of content consumed by users of OTT.Movies and thrillers top the preference list, followed by original webseries and comedy shows.Adventure or reality shows, documentaries are fast being challenged by the sensuous / erotica shows.Personal choice and friends are considered as the top factors influencing choice of content.As is visible in figure 2, other factors like app membership, family and advertisings both on traditional and social media are equally important.Figure 3 and 4 shows the devices preferred and the time of consumption of OTT.The behaviour of people with respect to OTT consumption and customer engagement also involves membership sharing.Research also showed that 60% respondents share their app membership details with their friends or relatives and vice versa.This ease of sharing membership is significant in increasing the customer engagements.This helps the organisation to design the customer engagement strategies focussed on acquiring the customers and increasing their engagement.Most of the companies offer free streaming of a teaser episode for their shows to gain popularity, thus increasing customer engagements.The primary aim is to increase the life span of the customer involvement, which earns profits.
Factor Analysis: Factor analysis, as described by Krishnaswami (2007), serves as a statistical method utilized to unveil underlying forces or factors amidst a myriad of interrelated variables or measures.It encompasses a range of techniques aimed at elucidating the correlations among variables by attributing them to more fundamental entities termed as factors.This methodology emerged from the recognition that variables within a meticulously defined domain, such as assessments of human capability or evaluations of interpersonal functioning, often exhibit correlations.According to Costello (2005), from a factor analytic perspective, these variables are correlated due to being influenced in part by latent factors that remain unobserved.These latent influences must hold a higher hierarchical position compared to the measured variables, as they account for the individual discrepancies observed within the tests (Cudeck, 2000).The second part of the statistical analysis is to find which factors are important in understanding the customer engagements.Through factor analaysis, an attempt is being made to suggest the most important factors the marketers must work on in order to devise a successful strategy for customer engagement.The extant literature review has given us a list of 10 factors identified as significant and one factor as Miscellaneous is taken as a combinations of rest of the factors.Content and personal choice are the most significant factors with highest mean values respectively.Peer pressure and multiplicity are the least important factors suggested by the respondents.Since all the factors are equally important the top five significant correlation coefficients are between ease of use and multiple options (0.721), Content and personal choice (0.706), multiplicity and multiple options (0.692), mobility and convenience (0.625), and mobility and multiple options (0.602).There are different definitions given by various authors regarding these factors.Factor analysis was performed in order to remove duplication and see the weighted importance of each factor in decision-making.Principal component analysis showed 69% of the variance in consumer engagement decision-making is explained by the three factors extracted after rotation.Figure 5, represents the scree plot of all the 11 components, clearly showing the Eigen values.Omnipresence: The first factor can be described as omni-presence as it is made up of the factor Multiplicity with eigen vale 0.741, Multiple options with a loadings of 0.843 and the third factor Ease of Use with a heavy loading of 0.820.Whether it is mobility i.e., freedom to watch when-where ever you are or multiplicity i.e., freedom to watch on any screen (mobile, tablet, laptop Smart TV), multi-content, multigenre, multi-members sharing membership etc. Smooth transition on all dimensions is the key to success of OTT.This factor is responsible for 25.7% of the variance loading.Individuals are dedicating a greater amount of time to digital media compared to any other platform.Specifically, an average Indian allocates 2 hours and 25 minutes to internet usage, surpassing the time spent on other mediums such as TV, print, and radio.(Aravindh, 2020).Many studies support this.The freedom to watch when moving around, flexibility of movement gave the freedom from bondage to fitted screen.Me time, personal space, my choice, my type and no interference, are some other expressions of these multiplicity combinations (Aggarwal, 2020).
Personage: Word 'Personage' literally means grandee, celebrity or superstar, for very obvious reasons that every customer of OTT feels he is being served as 'The Most Important' person.The factors that contribute towards this are Personal choice (0.693), Cost of Membership of OTT (0 .787) and Content with a loading of 0.796.Together these factors explain 23.884% of the variance.Marketing professionals must understand that personalisation is very important Figure 5: Scree plot of the factors for all the dimensions a) Personal viewing experience, b) Cost and validity of membership, along with ease of sharing and c) Content development in terms of genre, number and size of episodes along with seasons.One size fit all-approach will not work in the dynamic OTT ecosystem.Cost of OTT has to be pocket friendly, with multiple options and plans in terms of screens, duration and even content.With dubbing technology, the regionalisation and globalisation is adding to personalisation.Mobile phone is preferred by 88% respondents to watch OTT media, notifications, updates feedback creates a sense of reciprocity to keep the customers emotionally connected to the platforms (Blog Smile, 2019), (ET-Brand Equity, 2019).
Savoir-Faire: Tech-suaveness is directly reflected in the consumption of OTT, with more OTT apps being synonymous to modern, updated and smart by peers.The third factor is called 'Savoir-Faire', which literally means expertise, competency or proficiency in handling technology.This factor is extracted from a combination of Peer pressure (0.682), convenience (.615) and the miscellaneous factor with eigen value 0.767, together explaining 20% variance.Youngsters value consumption of OTT as an important factor for judging their peers and self as 'upto-date-modern' advanced youth.Youngsters are watching, sharing, discussing and recommending more online content than ever before.The number of screens, membership sharing and constant access is new points of peer bonding.Peer pressure is the main cause of OTT engagements, as the youngsters put it, the platform does not matter, it's all about me and my comfort (OTT Magazine, 2018).High-speed cost-effective internet, advancements in AI and ML, digital compression technology, smart devices and extreme globalisation, has made the youngsters look savoirfaire.At the same time, the abundance of content has resulted in problem of plenty, making it difficult to build brand loyalties (Aggarwal, 2020).

Conclusion Limitations and Scope for further Research:
Literature review gave us ten important factors, which mutually affect each other and contribute towards growth of OTT.Factor analysis gave us the three new variables as collective underlying effect of these factors.Consumers are no longer bounded with old screens, and are now enjoying personalised media consumption in their own space, pace and time.Omni-consumption, personal choice and choice of abundance, are gift of OTT (Heda, 2019).The marketing professionals need to use these three elements of Omnipresence, Personage and Savoir-Faire as the key to success.Rest of the marketing plans and strategies must be woven around these three at the centre.Unbundling of content is the new trend, that will decide the competitive advantage.The future is likely to result in unification of channels carrying content from multiple channels, according to your choice.'Binge' by Tata Sky is one such example already changing the market.According to Kanchan Samtani, Director, (BCG, 2020), India is going to be next M&E hub.The landscape of opportunities, content, and stakeholders is increasingly becoming globalized, and India, buoyed by a stable macroeconomic perspective, a youthful English-proficient workforce, and governmental initiatives like Make in India and Digital India, stands poised to leverage these emerging patterns.Central to this optimism is the favourable trajectory of consumer trends within India.However, this study is constrained primarily by a limited sample size and geographical coverage.The survey, confined to Delhi NCR and reliant on referrals, lacks randomness in its sampling approach.Moreover, the direct nature of the questionnaire has its limitations, as individuals might withhold disclosing their media consumption habits due to concerns about potential judgment.Although this research did throw some light on the customer engagement in consumption of OTT, but qualitative research using tools like focus group interview would be much better approach.Future research can focus on more geographic and demographic spread, and can also be qualitative in approach.
by various researchers as an online video provider that delivers content to consumers via the internet (Sujata et al., 2015; Erman et al., 2011; Kim et al., 2016).The Media and Entertainment (M&E) industry witnessed substantial growth in 2019, experiencing a nearly 9% rise to reach INR 1.82 trillion (FICCI-EY, 2020) and is projected to surpass the $100 billion mark by 2025.Experts like John Harrison (Ernst & Young, 2016) anticipate a new phase of growth for the M&E industry, noting its current annual growth rate of 13-16% and its role as a significant employment generator due to extensive involvement in content creation, delivery, and consumption.The industry's unprecedented quality, diverse content categories, and vast array of offerings are reshaping competition dynamics, positioning the M&E sector as a global powerhouse (Malik, 2020).
Literature: Digital media is an integral part of life today.Its popularity tops the list for favoured medium for interaction, information search, entertainment and overall well-being.The extant literature available on OTT platforms has focused primarily on exploring the various dimensions of OTT ecosystem, (Patel, 2020), (Grover, 2019), (Panda, 2017.)The second category of research is in the area of consumer adoption behaviour (Shin et al, 2016), talked about adoption through strategic management, others like (Chen, 2015), (Matrix, 2014) have compared the traditional media with OTT platforms on basis of performance.The third stream of research is on consumer behaviour and a sneak peep into patterns of consumption, quantity, quality, binge watching, membership and cost related factors (Singh, 2019), (Dasgupta, 2019), (Tarun Katiyal, 2020),

Figure 1 :Figure 2 :
Figure 1: Popular Genre of media watched hrough OTT platforms