Recap 2020: Stupendous rise of OTT services in India

The OTT revolution has been gathering momentum for the past two years. The pandemic, however, acted as a catalyst and catapulted this revolution. OTT services in India are a whopping INR 5000 crore industry today.

The appearance of the COVID 19 induced pandemic resulted in a complete lockdown from March 2020. People had to stay and work from the confines of their homes. Most places like the cinema halls, malls, restaurants etc. underwent a complete shutdown. TV program production too came to a standstill and movie releases infinitely delayed. Producers began to lose money and the general public felt an acute lack of entertainment.

It was in this backdrop that OTT services in India made their presence felt. People gravitated towards it as it provided the sole means of audio-visual entertainment during the tension-filled months of the lockdown. The urban-centric OTT platforms became the most sought after means of entertainment throughout the country. They ceased to be limited by the confines of geography or demographics. The OTT platforms made their presence and power felt in 2020 and how!

Some Statistics of the Indian OTT Market

Today, the stupendous rise of the OTT platform is no longer a myth. Pertinent figures and statistics from Deloitte and other survey groups indicate that:

• There are around 432 million internet users currently in India. Low mobile data charges have further contributed to its rapid growth of around 4 to 8%. The availability of smart TVs at prices of around INR10,000 helped to reinforce this growth.
• India had around 355 million OTT video viewers by December 2020, showing an unprecedented y-o-y growth of 35%.
• Currently, there are 40+ mainstream OTT platforms in India. While the number of users did not increase much, the business of individual players grew manifold.
• Between the lockdown months of March 2020 and July 2020, OTT platforms witnessed a 30% increase in paid OTT subscriptions. Survey statistics showed the growth to be from 22.2 million paid subscribers to 29 million by July end. While metro cities contributed 46% OTT viewers, the Tier 1 cities added another 35% viewers in July.
• The OTT sector was also the only sector that showed a growth of 26% while subscriptions rose by 47%.

The Great Shift

The pandemic induced lockdown hampered the DTH and theatre halls from providing viewers with their daily dose of entertainment. While the DTH segment suffered due to lack of new content, theatre halls underwent a complete shutdown. Many movies were on the brink of release. An infinite postponement of release dates saw many producers losing money.

Hence, movies were released on OTT platforms. The Indian viewers could now experience the magic of the Friday new movie release right from the comfort of their homes. While exigencies provoked such a drastic step, the viewer benefitted. Irrfan’s “Angrezi Medium” was probably the first movie to release on an OTT platform. This was followed by movies like the SSR starrer “Dil Bechara,” “Gunjan Saxena,” the Amitabh-Ayushman starrer “Gulabo Sitabo” etc.  

Even though cinema halls opened up in the later phases of the un-lockdown, the new rules of social distancing greatly reduced their capacities. Consequently, they expect to lose about 40% of the pre-COVID revenues they were earning.

Their loss is proving to be a boon for OTT services in India. In the year 2019, digital streaming overtook film entertainment for the first time to rank as the 3rd largest M&E sector in India. While this dominance has unnerved and challenged many Bollywood biggies including some top studios, it has also opened up a new vista for content monetization.

Ad-flow Increase Further Boosts OTT Growth

Customer reach is a key contributor to market growth. The OTT platforms provided the ideal way to reach a wider audience during the lockdown. The popularity of smartphones and the rampant use of mobile data further made OTT popular among the general populace. Internet usage was not restricted only to the metros and other cities and towns. It had reached the grass-root level.

This presented a goldmine of opportunities for the advertisers. They capitalized on it and active OTT advertisers grew by 45% from being just 24 in Q1 of 2019 to 35 during the same period in 2020. Mobile advertising saw a boost. The general expectancy is for its share in the budget for digital advertising to go up from 45 to 55% to about 65 to 70% by 2022.

There was no dearth of advertisements in the OTT sector even during the lockdown. While February saw about 2881 ad-insertions in the OTT platforms, by March, it had almost reached 4500. There were several reasons for the same as:

• The convenience to watch favourite programs at leisure
• Advertisements are inserted within the content and the viewer sees the advertisement naturally thus resulting in its enhanced retention
• Regional brands could target customers belonging to a particular geography and demographics with precision resulting in reduced ad-wastage
• OTT ads are flexible as creative, languages, budget allocation etc., could be changed based on performance.

A trend was established. Incorporating brands and products within a web series as a narrative created a frictionless environment for the advertiser and viewer to meet.

Additionally, more advertisement meant easy procurement of fresh content that could be delivered free of cost. This resulted in increased demand for AVoD services that further augmented the rise in the SVoD services.  

The Hyperlocal OTT Platform Rise

While biggies like Disney+Hotstar, Netflix, Amazon Prime continue to control the subscription base, some Indian OTT players like Zee5, Alt Balaji, Voot Select, PhunFlix etc., are also making their presence felt. However, the growth of the pure-play language-specific OTT players has helped further the growth of the OTT subscription base considerably.

So lucrative is the subscriber niche that even the biggies have made a foray into the regional market today. Hotstar recently released statistics stating that a whopping 40% of its video consumption comes from regional language content with Bengali, Tamil and Telugu topping the list.

Some regional OTT streaming platforms that have positively influenced the OTT subscriber base in the regional space are Hoichoi in Bengali, Aha Video in Telugu, Planet Marathi, CityShor TV in Gujrati etc. The growth of these is a testimony to the fact that the Indian audience values content above everything else. Good subtitles have helped to erase the lines between national and local content.

The vernacular content also helps OTT services in India make a demographic connect. Statistics released by India Brand Equity Foundation show that 90% of OTT viewers prefer regional content.

Freshly Brewed Content

Different genres, diverse languages and new and unique content; these are the key deliverables that OTT has given to the Indian viewer. This significant shift from what the Indian viewer was used to watching has made the Indian viewer curious. The crisp content, the precise narrative and the unique and edgy storyline have left the Indian viewer wanting for more.

OTT streaming biggies like Disney+Hotstar, Amazon Prime and Netflix collectively expect to spend around INR 2825 crore on fresh and original content in 2021. Other Indian national and local OTT streaming like Zee5, Alt Balaji, SonyLiv etc., are collectively talking of investing about INR 4905 crore in acquiring fresh content in 2021.

This means that the viewers are in for a treat where content is concerned. With OTT services in India set to cater to the ever-changing taste of the Indian viewer and willing to go to lengths to capture a viewer base, the future of OTT services looks bright. Sports coverage, once a sole domain of the TV industry, has already started making its presence felt in the OTT space. Amazon Prime won the rights for broadcasting New Zealand cricket as one of the first in this direction. It is also eyeing IPL and other Indian cricket tournament rights to further make inroads.

India is a fast-digitizing nation now. It is only natural that OTT platforms would take advantage of this and come up with a bouquet of new superlative services that will help resolve old user experience challenges and usher in the golden era of digital entertainment.