The Indian Media and Entertainment report from EY-FICCI reported in 2019 that the digital streaming platform had become the third-largest Media and Entertainment (M&E) sector in India.
The news above may not seem like much. However, when you consider that the film entertainment sector became the fourth largest M&E sector in India, you will understand how big over-the-top media (OTT) has become in the country. That was a shocking revelation to Bollywood and those who controlled it. While most big names in the Indian film industry were contemplating adapting to the new trend of OTT services in India, the Covid-19 pandemic in 2020 sped the process at so many levels.
The Indian OTT market is the fastest-growing one in the world. It is likely to record a 28.6% CAGR over the next 4 years. The Covid-19 lockdown further sped up its growth in recent times. While the Indian film industry was hit hard by cinema theatres shutting down due to the pandemic, OTT platforms have provided film production houses and actors the perfect platform to drive their economy and creativity.
Find out how Bollywood has become the biggest frontier for OTT in its fastest-growing market.
Current Scenario of OTT in India
Even a couple of years ago, a Netflix or Amazon Prime subscription was a rare thing in the country. Now, it is the hot topic of discussion, not just amongst the otherwise younger population, but also amongst the older age group. It is worth mentioning that India has the largest youth population in terms of size. With OTT services in India offering more content targeted at this populace, this market is set to see a massive explosion in growth in the near future.
Currently, the Indian OTT ecosphere is valued at around $500 million. The country has over 700 million internet users, which is a staggering figure. This figure is expected to grow to 974 million by 2025. At the rate it is growing, it is expected to be worth over $5 billion by 2023.
The lockdown has played the role of an accelerator in the growth story of OTT services in India. And in doing so, it has provided a respite of new life to Bollywood that has been in limbo for several months. The masses are hooked to a wide range of platforms that typically includes:
- Amazon Prime Video
- MX Player
- Eros Now
- ALT Balaji
The Story of Bollywood’s Transition
The previous Bollywood business model involved big production houses acquiring or bankrolling big-star movies. The model is now changing after the realization of the growth of OTT services in India. Producers are now exploring options to raise funds from new market players to run projects.
OTT services have played the role of a disrupter for the star-gilded celebrities in this industry. New and quality talent is now able to find opportunities that were earlier limited to mostly the big names. Great stories are becoming the bigger sellers now.
The Second Awakening
The transition triggered by OTT services in India can be considered as the second big awakening in Bollywood in recent times. The first awakening is expected to have happened between 2007 and 2008 when it became more organized. That was when corporate culture entered the Indian movie industry. It was the time when the studio model gained popularity. The industry has undergone recalibration almost every 3 years since then.
It seems the big streaming services are now emerging as the big players. For example, Netflix, Amazon, Zee5, Disney, and Voot are offering big money now. Previously, a big corporate broadcast network would sign a multi-hundred million rupee deal with a star. This would transfer the satellite TV rights of all of that star’s films to that studio. That is now changing.
Now, the movies of big stars (and new and ones) appear on Netflix, Amazon Prime, and Disney Hotstar. The corporate networks are forced to let go of their star actors because they are unable to match the price.
These OTT services in India are not limited. They have options beyond that of star-based films. Studios are now less interested in dealing with big actors, as the IP rights are held by the latter in partial or full. Earlier, broadcasting networks used to purchase individual or group of films from studios and producers. Now they are increasingly finding it difficult to match the budgets of the big players in the OTT market. The latter are now demonstrating their abilities to price IP rights more lucratively.
The Impact of Covid-19 Lockdown on the Box Office & OTT Market
There were around 3000 multiplexes in the country in 2019. They generated around $1.89 billion in revenues. Around 2 billion viewers purchased movie tickets in 2018. By 2020, the figures were expected to grow, but the coronavirus lockdown affected the industry adversely. The Indian box office losses have been estimated to be well over $300 million.
Bollywood needed creative ways to deliver entertainment content to its audience. And this audience seems to have found the right alternative to theaters in the form of OTT services in India. A larger part of the audiences had access to the internet and found a great alternative in OTT digital streaming services. And with the smartphone revolution already brewing, the technology seemed to be perfectly positioned to answer the demands of the masses.
A survey conducted in May of 2020 showed that Netflix and Amazon Prime recorded a growth of 65% and 67% in their subscription, respectively, from March to April of the same year. This was a month after the lockdown was declared in the country.
OTT services were still a new thing in the market. When access to movie theaters ceased, the audience began embracing this new technology in droves. Audiences soon realized the convenience offered by the platform. It has created a new normal that couldn’t have been expected to form just a few years ago. At least, not at this scale and pace.
Bollywood has realized the impact of digital streaming services and is working to adapt to it. It may still come up with new strategies in the near future to meet the growing and more versatile demands of its audiences.
Bollywood is still reeling out of its never-seen-before hiatus after the Covid-19 pandemic. It has woken up to witness a new technology in a form it didn’t expect to see for many years into the future. OTT services have made their presence felt, not just for Bollywood, but also for Hollywood.
The charm and beauty of the 70mm are still expected to stay here and people are expected to return to the big screen as theatres begin to open gradually to their full capacity. However, OTT services in India have received unprecedented acceptance and are expected to stay here and grow bigger by the day.
While it has created new avenues for the audiences to access a wider range of content, it has also created new and unexpected opportunities for talent. From new actors to directors and producers, OTT streaming services seemed to be leveling the field in Bollywood for the near future.
[…] An October 2020 report released by PwC indicated clearly that the pandemic induced closure of movie theatres and multiplexes have inadvertently paved the way for a spike in OTT demand in India. […]