India Is The Fastest Growing OTT Market In The World
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.
Revenue generated by the subscription VOD sector has crossed box office revenues for the first time. While COVID has hit live events and movie theatres badly, it has proved to be a boon for the OTT sector. The proliferation of internet-connected devices has further aided this growth in OTT services in India.
Subscription VOD is seen as the main driver for this growth. As per reports, this market will see a growth rate of 28.6% CAGR from 2019 to 2024. It is expected to generate a whopping revenue of 2.9billion USD by the year 2024.
With OTT services like Disney+ Hotstar, Amazon, Netflix capitalising on this trend and increasing investments in acquiring content, the total CAGR revenue is expected to see a better growth rate. Statistics indicate that from just 708 million USD in the year 2019, the OTT market is predicted to achieve a 30.7% CAGR to go up to 2.7billion USD by the year 2024.
India’s total media and entertainment revenues are also expected to grow at an awesome 10.1% and expected to reach 55billion USD by the year 2024. This is against a predicted contraction in the global M&E revenues for the current year.
Contributors To This Growth
What the statistics say is further bolstered by certain facts evident in day-to-day life. The shift in moviemaker’s focus from the movie theatres to OTT platforms for quick movie releases is just one example of the same.
India is expected to have more than 500 million subscribers by the year 2023. This number is estimated to rise as more people opt for internet-connected devices like smartphones and smart TVs. Internet penetration is also on the rise. Hence, to capitalise on it and retain this growth even after the pandemic is over, OTT players need to come up with:
- A diversified content portfolio
- Varied pricing packages
This will help them get more paid subscribers, thereby ensuring consistent growth of OTT services in India. Current factors that are contributing to the spike in OTT growth are:
- Pricing: The current business model followed has the OTT segment divided into three segments:
- Advertising VOD or AVOD: Herein advertisements drive revenues. The OTT market is highly focussed on this segment
- Subscription VOD or SVOD: This is consistently showing significant growth
- Transactional and freemium or TVOD
The pricing strategies and direct to digital releases have helped increase the customer base for OTT players. Netflix currently has a 199INR per month plan while Amazon has signed up with telecom players to offer free subscriptions. The war to increase subscribers is on and OTT platforms are actively trying to woo subscribers with offers, discounts, pricing schemes and content.
The Indian consumer is price-sensitive. To capture the market, OTT players are thus offering extremely low subscription rates while at the same time striving to give them diversified high-quality content. The introduction of sachet pricing and pack durations has ensured that the Indian audience accesses preference shows at relatively low costs. This has further contributed to the growth of OTT services in India.
- Content: While some English content in the form of popular movies and international TV series is still being streamed, the majority of the OTT players are concentrating on sharing Hindi and other regional language-based content. The focus is currently on the niche regional audience. Thus the creation of a repository of movies, web series etc., all in regional languages is being seen as a strategic move and most OTT players are concentrating on creating original regional content to keep the audience engaged.
While for some OTT players like AT&T and Disney, providing exclusive services through content delivery is the main focus, others like AltBalaji, Zee etc., are fast shifting focus from conventional media like television to OTT services in India.
As online streaming audience goes beyond the metros and millennials, more homemakers and senior citizens are becoming OTT viewers. This has led to an increase in the mushrooming of regional pure-play streaming platforms. Coupled with the fact that even the big players are looking at capturing the regional viewer, the audience is benefitting in terms of subscription rates and content.
- Contests and games: These can be played parallel while watching live streams. The recent introduction of the ‘Watch N Play’ contest by Disney+ Hotstar during the IPL season is one such example. In this contest, the audience could predict scores during a live match and even win prizes.
- Entertainment industry shift in focus: The entertainment industry was staring at a period of loss with release dates of new films delayed indefinitely and shooting for on-going and new movies stopped. OTT platforms seemed a godsend for the producers and makers of films. They moved to swiftly capitalise on it to release their movies and recover the money invested. It would be prudent to mention here that while the print advertising media suffered a loss in the year 2020, internet advertising emerged unscathed. This further prompted key players to shift loyalties, thereby enabling the growth of the OTT segment further.
Future of OTT Growth
OTT was already gaining popularity in India before the lockdown. However, COVID made the year 2020 the breakthrough year for the OTT industry. Till the theatres or cineplexes open up again, the popularity of OTT services in India is expected to rise. However, the recent decision considering the opening of cinema halls and multiplexes could well slow down the rising industry to some extent. Hence, OTT players need to think ahead and plan accordingly so that they do not lose the grounds that they have gained in the current year.