A Comprehensive Analysis on JioCinema

Introduction

JioCinema is an online video streaming platform owned by Reliance Jio, a leading telecom operator in India. It offers a wide range of content, including movies, TV shows, web series, music videos, live sports, and Voot shows, in various languages and genres. JioCinema also features exclusive content from Warner Bros Discovery, a global media company that owns popular brands such as HBO, CNN, and DC Comics.
JioCinema has disrupted the OTT market in India by leveraging its massive subscriber base and offering affordable and attractive plans. According to a report by KPMG and FICCI, JioCinema had over 10 million subscribers in the first quarter of 2023, adding more than 4 million subscribers in three months1. In contrast, Disney Hotstar, the market leader, lost over 8 million subscribers in the same period. JioCinema also has a competitive edge over other OTT platforms in terms of content diversity, quality, and accessibility. It has partnered with various content providers, such as Eros Now, Shemaroo, Sun Nxt, and HOOQ, to offer a rich and varied catalogue of movies and shows. It also has exclusive rights to stream some of the most anticipated movies of 2023, such as Dunki, Section 84, and Zara Hatke Zara Bachke.

Jio Cinema’s Marketing Blitz

1. Loss Leader Strategy

JioCinema employs a strategic loss leader approach, offering free streaming of popular sports events like the Indian Premier League (IPL) to entice users. This tactic aims to draw in a diverse audience in the price-sensitive Indian market. By providing free access, JioCinema attracts users from various socioeconomic backgrounds, gaining a competitive edge over subscription-based OTT platforms.

Once users engage with the platform, JioCinema anticipates their conversion to paid services like Jio TV+ or JioFiber. This strategy has proven highly successful, amassing over 100 million active users, positioning JioCinema as India’s largest OTT platform. The platform’s triumph has prompted competitors to adjust pricing models or introduce free trials to remain competitive.

2. Cross-Selling to a huge customer base

Leveraging its massive subscriber base of Jio Sim, which is the largest telecom operator in India with over 400 million users. JioCinema can cross-sell its products and services to these users, who are already familiar with and loyal to the Jio brand. JioCinema can also offer incentives and discounts to Jio Sim users, such as free data, vouchers, and coupons, to encourage them to use JioCinema more frequently and for longer durations. JioCinema can also use the data and insights from Jio Sim users to personalize and tailor its content and recommendations to suit their preferences and needs

The IPL Effect

JioCinema experienced a remarkable upswing in its market share, surging from 10.73% to an impressive 40.26% during the IPL 2023 season, marking a nearly fourfold increase. This substantial growth can be primarily ascribed to the acquisition of streaming rights for the Indian Premier League (IPL) and the implementation of a free subscription model.

The IPL period proved to be a game-changer for JioCinema, witnessing a fourfold increase in its penetration, whereas Disney+Hotstar observed only marginal growth in comparison. The pivotal factor driving JioCinema’s meteoric rise during this period was its innovative free subscription model. This model played a pivotal role, contributing to approximately 72% of new app installations throughout IPL 2023.

The acquisition of IPL streaming rights and the adoption of a free subscription approach not only propelled JioCinema to a position of dominance in the market but also garnered significant user engagement, reflecting the effectiveness of its strategic initiatives. This surge in market share and user adoption during the IPL season underscores the impact of content exclusivity and innovative subscription models in the highly competitive landscape of OTT platforms.

How Big is the OTT Market in India?

In the 1980s, the swift proliferation of video cassette recorders and players (VCRs/VCPs) posed a challenge to the conventional methods of experiencing cinema. However, the ascent of multiplexes in major urban centers during the early 2000s led to a significant decline in the DVD industry and single-screen theaters. Presently, the dominance of OTT platforms is disrupting the landscape for multiplexes.

As per Statista report, The OTT Video market in India is anticipated to reach a revenue of US$4,144.00 million in 2024, with a projected annual growth rate (CAGR 2024-2028) of 7.74%, leading to an expected market volume of US$5,584.00 million by 2028. The predominant segment in this market is Video Streaming (SVoD), accounting for a market volume of US$2,018.00 million in 2024.

In comparison to other nations, the United States is forecasted to generate the highest revenue, reaching US$140,700.00 million in 2024. The number of users in India’s OTT Video market is projected to reach US$5,584.00 million by 2028, with user penetration expected to be 31.6% in 2024, increasing to 37.0% by 2028.

Jio Cinema’s Business Model

A. JioCinema’s AVOD Triumph: Revolutionizing the OTT Landscape by Outpacing Competitors with SVOD Models

OTT platforms operate on two primary models:

Subscription Video On Demand (SVOD) Model:

Users pay a recurring subscription fee, typically on a monthly basis, to access the content library of the OTT platform.
Examples of platforms using SVOD include Netflix, Amazon Prime Video, and Hotstar Premium.

Advertising Video On Demand (AVOD) Model:

Users can access content for free on OTT platforms under the AVOD model.
Revenue is generated through advertisements that users are required to view during the content streaming.
YouTube and Hulu are examples of platforms that incorporate the AVOD model.

AVoD vs SVoD in India:

	AVoD Model	SVoD Model
Revenue Projection (2024)	US$1.76 billion	US$2.02 billion
Revenue Growth Rate (2024)	25.6%	19.0%
Annual Growth Rate (CAGR 2024-2027)	12.86%	11.10%
Projected Market Volume (2027)	US$2.53 billion	US$2.77 billion
Number of Users (2027)	465.5 million	108.4 million
User Penetration Rate (2024)	27.7%	6.2%
User Penetration Rate (2027)	31.7%	7.4%
Average Revenue Per User (ARPU) (2024)	US$4.45	US$22.68

JioCinema’s annual pricing model positions itself competitively at the lower spectrum compared to other premium OTT services like Disney+ Hotstar, Netflix, and Amazon Prime Video, whose subscription fees range from Rs 1,000 to Rs 2,000. Despite this affordability, JioCinema has yet to witness a substantial surge in its subscriber base. This could be attributed to the fact that the Indian audience, known for being value-conscious, may find the annual subscription fee of Rs 999 too steep for exclusive access to HBO and Warner Bros content.

In response to this challenge, JioCinema is anticipated to broaden its content portfolio, with a strategic focus on incorporating new films, direct-to-OTT releases, and potentially exploring partnerships for global content acquisition. By diversifying its offerings, JioCinema aims to attract a more diverse and expansive subscriber demographic.

Moreover, the decision to offer the Indian Premier League (IPL) for free is poised to significantly boost Viacom 18’s streaming platform by engaging a wider audience. This move acknowledges the popularity of cricket in India and positions the streaming service as an attractive option for the masses.

To cater to the premium segment of the market, JioCinema is contemplating an ad-free subscription video on demand (SVOD) model. This premium offering, coupled with exclusive HBO and Warner Bros content, is designed to appeal to households seeking a high-quality, uninterrupted streaming experience. By tailoring its services to diverse consumer preferences, JioCinema endeavors to strengthen its market presence and enhance its appeal across various audience segments.

JioCinema, while primarily using the AVOD model, has strategically incorporated elements of the SVOD model. It streams major sports events such as the FIFA World Cup, IPL, La Liga, and various league games through AVOD. Simultaneously, it offers a yearly subscription model, allowing users to access exclusive content. This hybrid approach has positioned JioCinema as a disruptive force in the Indian OTT market, effectively catering to a diverse audience.

B. Jio Cinema’s Partnership with Telecom Operators

Moving on to the second aspect, let’s delve into the strategic move of forging partnerships with telecom operators, a masterstroke by Reliance in expanding the reach of JioCinema. Presently boasting over 400 million telecom users, Jio stands as a dominant force in the OTT industry. Jio users are already privileged with bundled services like JioSaavn and JioMart, facilitating the organic growth of JioCinema. However, Reliance didn’t stop there; they formed partnerships with competitors like Airtel and Vodafone Idea, offering JioCinema as a value-added service to their subscribers.

This collaborative approach might raise eyebrows, prompting questions about competitors providing access to Jio services. Yet, this move is a strategic win-win for both Reliance and the partnering telecom operators. By making JioCinema available to Airtel and Vodafone Idea users, Reliance not only expands its user base but also taps into the vast market of data consumption. Imagine being an Airtel or Vodafone Idea user eager to catch live sporting events like the FIFA World Cup or IPL on JioCinema. The potential loss in user engagement and revenue for these telecom operators is substantial.

This clever tactic forces users to consider acquiring a Jio SIM to ensure uninterrupted access to their favorite content, especially during high-demand events. It’s a calculated risk for Reliance, as criticism may arise for limiting access based on telecom providers. Nevertheless, the strategic advantage lies in attracting users who prioritize content consumption during critical events. This approach not only secures Jio’s position but also drives data consumption for the partnering telecom operators, ensuring a symbiotic relationship.

Personalization through recommendations also plays a pivotal role in JioCinema’s success. Leveraging the vast network of Reliance’s customer base, JioCinema employs AI and machine learning to analyze user preferences. Tracking search history and viewing habits, the platform tailors content recommendations to individual tastes.

For instance, if you are a Jio user residing in Uttar Pradesh, JioCinema can leverage this information from Jio’s telecom data bank. Recognizing your affinity for local content, the platform can send notifications about the latest web series, such as UP65, directly to you on various social media platforms. This personalized content strategy is a dual advantage for Reliance. Firstly, it enhances the user experience, keeping viewers engaged and on the platform for longer periods.

Secondly, this wealth of user data allows Reliance to understand consumer behavior and preferences, influencing content production under Jio Studios. By creating content aligned with audience preferences, JioCinema not only boosts ad revenue but also retains a loyal user base. The strategic synergy between personalized recommendations and user data consumption creates a lucrative cycle for Reliance, solidifying its position in the OTT industry.

C. Strategic Partnereships and Content Library

In its pursuit of securing premium content, Viacom18 entered into a multi-year agreement with Warner Bros. Discovery in April, marking JioCinema as the exclusive streaming home for HBO and Max Original content in India. This extensive deal encompasses both past and future seasons of globally acclaimed HBO shows, such as Succession, House of The Dragon, and Game of Thrones. JioCinema responded to this acquisition by introducing its inaugural paid plan at Rs 999 per year.

Further enhancing its content portfolio, Viacom18 struck an exclusive deal with NBCUniversal in May. This strategic collaboration brings Peacock Original shows and movies to JioCinema starting June. The newly introduced ‘JioCinema Premium’ subscription offers access not only to premium global content but also includes Voot Originals and over 100 exclusive shows and films produced by Jio Studios over the next 18-24 months.

In a move towards platform integration, JioCinema is set to gradually incorporate Voot’s entire library, resulting in the creation of a unified entity known as ‘JioVoot.’ This integration, expected to unfold over the next 6-8 months, will include backend and content integration, with the promise of 4-5 new content drops each month. The eventual merger of Voot Kids with JioCinema is also on the horizon, as revealed by insiders familiar with the development.

D. JioCinema Ventures into the World of Children’s Entertainment

JioCinema has announced its entry into Kids entertainment with its ‘Kids and Family’ offering, catering to young audiences across various age groups and offering popular content in 5+ Indian languages.
The platform has formed strategic partnerships with leading local and global studios, including Viacom18, Cartoon Network Studios, Dreamworks, The Pokémon Company & more, to provide diverse and engaging content. Further, it will add fresh content every week and include a ‘Kids and Family’ profile with parental controls for age-appropriate access.
The ‘Kids and Family’ category will include content such as Motu Patlu, Shiva, Rudra, Harry Potter, Transformers, and more, offering a mix of Indian and global series to enrich family consumption.

JioCinema’s Disruptive Impact on Other OTT Platforms

Predatory Pricing and User Migration: JioCinema’s free pricing model, particularly with major events like IPL (20-25 million Hotstar users reportedly migrated), is significantly impacting other SVOD platforms’ user base and growth. This could result in a decline in SVOD user growth from 25-30% to 10-15%.
Shifting Market Focus: With OTT penetration near saturation in metro cities (79%), subscriber growth has stagnated. New users must come from rural and tier 2/3 cities, where affordability favors free models. This necessitates a shift towards high-quality regional content, something JioCinema is actively pursuing.
Erosion of SVOD Revenue Share: JioCinema’s free offerings could further shrink the already limited 37% share of SVOD users in the total OTT user base. This directly impacts the revenue and profitability of existing SVOD platforms.
Adaptation or Extinction: Other OTT platforms must adapt their strategies to survive. Airtel’s successful response to Jio’s initial entry serves as a reminder that innovation and strategic adjustments are crucial. Focusing on niche content, tiered subscription models, and bundling with other services are potential avenues for differentiation.

Overall, JioCinema’s aggressive growth and disruptive pricing threaten to reshape the OTT landscape. Other platforms must adapt to cater to diverse market segments, prioritize regional content, and explore alternative revenue models to retain users and stay relevant.

Sources

Harsh Raj KeshavMember