Mukesh Ambani is Changing the TV Market with JioTV.

Mukesh Ambani is Changing the TV Market with JioTV.

With data prices declining, is it time to cut the cord?

In a number of recent surveys, it was discovered that Billionaire Mukesh Ambani is single-handedly transforming the way India consumes media and at the same time is also transforming the TV market.

India’s richest man is threatening to disrupt two established markets with both cheap data plans and services offered by Jio.

Nearly half of the customers of Mukesh Ambani’s telecom upstart Reliance Jio Infocomm Ltd. said they use their mobile internet connection “primarily” to watch live television, according to a report by Bank of America Merrill Lynch. “The telecom aggregation apps like JioTV and JioCinema are turning into one-stop places for consumers to view all content as they do not have to download the individual over-the-top streaming apps”.

Online Video Streaming for the Win

Of the services that are offered by Jio, the BofAML’s survey also revealed that JioTV, which is used to stream live TV, is the most popular. India’s largest telecom operator Bharti Airtel Ltd. also saw this trend as The Airtel TV app has over 10 million downloads “despite Bharti being relatively late to the game,” the report said.

The transformation is coming thanks to the average price per Gigabyte rapidly dropping. An average Indian telecom user now consumes 2GB of data every month compared to 0.23GB before Jio’s launch, according to quarterly data from the Telecom Regulatory Authority of India. That number is only expected to go up and could reach a staggering 18GB a month in the next five years. Making it cheaper for users to stream content means that users are not being as careful with that they use their data on. Hence, users are choosing to stream live TV as a result. Enter the services offered by Jio and you have a perfect combination to change the way people consume media.

Jio’s free services can be used for six months followed by cheaper data tariffs if you use them to consume the services. What that means is that customers who were paying roughly Rs 300 per GB now are paying around Rs 15, which is a staggering saving. Two-thirds of the 1,000 Jio users surveyed by BofAML said that they use their data allowance to stream videos online. Around 68 percent of them download videos on their mobile handsets, while only 23 percent claim that their data usage habits have not changed. Given the savings to be had by leveraging Jio’s services, it probably won’t be long before that 23-percent also jump on board.

Time to cut the cord?

While the survey showed the number of people using their devices to consume media, it also showed what those people tend to use for that media. The clear winner was YouTube that saw 58% of the surveyed audience choosing the destination for its content needs. The second most popular was Hotstar with other services like Zee5 and Eros following behind.

“We consider this as a new emerging theme in India and expect content companies to be beneficiaries of the telecom price wars,” the report said. “However, given the nascent stage of the market, we don’t see a clear winner in the OTT space.”

This inevitably raises the question that most millennials are considering – is it time to cut the cord? BofAML said that the thread was immediate as the average monthly cable bill in India of Rs 200-400 is very low when compared to the tariff charged for data of Rs 500+. For that reason, it doesn’t consider cord-cutting a risk but with those data prices inevitably due to decline in the coming years, it would be naive not to consider it a threat.

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