As news broke out that online streaming service Netflix crossed the $6 billion spending mark on new content,a message or rather a statement of intent, was delivered clearly: Netflix is not to be taken lightly by the big Hollywood studios and TV channels.Not only is their ambition to be erred with, the content rolled out has been of the highest quality.But the news reflects a larger picture than just the dogfight between Netflix and Hollywood; Over-the-top (OTT) content has infiltrated in many forms of communication and is growing at a rapid rate.With respect to India, the issue has been taken up before, with telecom companies arguing with the Telecom Regulatory Authority of India (TRAI) by floating a discussion paper regarding eating up of revenue by these OTT apps.
But first things first,what exactly are OTT applications or services? An over the top application is any app or service that provides a product over the internet and bypasses traditional distribution i.e it is not provided directly by your Internet Service Provider (ISP) or telecommunication provider.Popular examples of OTT apps or services are Netflix or Hulu for streaming video, Skype or Facetime for voice or video calls and Whatsapp or iMessage for messaging on a mobile device.
The call for regularisation of OTT content is because telecom operators feel these services are venturing into their revenue streams without being levied the proportional amount which they are obliged to pay. For example, a consumer may prefer to use the messaging,voice and video calling service provided by Whatsapp via payment of just internet data, and hence bypassing expenditure on network calls and messages also provided by the Telecom operator.
However, there is also the possibility of the issue becoming largely irrelevant if the telecom operators start offering these same services through apps in the near future. For example, Reliance Jio’s approach to infiltrate the market with an array of apps has given hope that Telcos can compete and tackle with the growing consumption and usage of OTT content.
From the consumer point of view, OTT content is a boon to reduce day-to-day expenditure in our lives.Regularisation of these services will result in outrage and backlash from the public.However, there is a view that sentiment needs to be brushed aside to increase revenue in an industry that is reeling in debt and disrupted by Reliance Jio’s aggressive pricing strategy.Whatever the course the authorities take, i am going to sit back and enjoy the latest season of ‘Narcos’.Netflix and chill, as they say.