2019 May be the Tipping Point for OTT Adoption in India
Globally, the shift towards OTT has been a definitive one. In the US, for example, the number of households using only OTT services has tripled since 2013, to 14.1 million homes in 2018, as per the VAB report. This number is still small in absolute terms, though, given that a vast majority of US houses still use OTT only to supplement regular cable services. However, it gives a very good indication of which way the wind is blowing.
We’re seeing this happen in India as well, albeit, to a much smaller extent. Despite the buzz around OTT channels, adoption is still restricted to certain demographics, that too, mostly in the metros. This is changing, however. The OTT market in India is set to reach $5 billion in size by 2023, as per a report from BCG. Another PWC report expects that India will be among the top ten OTT video markets by 2022, with a 22.6 CAGR growth rate.
Growing affluence, an explosion in smart devices, and cheap internet connectivity will be important factors driving this growth. At the same time, initiatives by OTT players to offer exclusive, high-quality differentiated original content, coupled with programming for regional content will also drive growth. With the democratization of internet access, and the challenges of electricity, cable & satellite connections and TV screens, rural India is posed to lead to the way to the next wave of OTT adopters due to the ease of mobile phone access and pre-baked OTT app availability.
Here are some of the trends that point to this:
- Differentiated content: The biggest driver for adoption of OTT content will be the steady growth of diverse original content that caters to different audiences. This could be in the form of exclusive sports events, niche entertainment shows, and of course, regional content. Most OTT players are quickly jumping on the ‘original content’ bandwagon. Reports suggest that Netflix will spend Rs 600 crore per year for original content in India, while Amazon is expected to spend about Rs 2,230 crore over the next two or three years. Regional content is growing in a big way too, with players such as Zee5 and ALTBalaji exploring regional content across languages such as Tamil, Telugu, Marathi, Kannada, Bengali etc. Regional content plays an important role in a country like India with multiple regional languages.
- Multi-screen entertainment on the go: Viewers today are spoilt for choice. Just about three decades ago, television was the only screen that Indian audiences had access to. Slowly, desktops came on the scene, although desktop videos delivered online came much later. Today, viewers may choose to consume online content through their smart phones, smart TVs, tablets, gaming consoles, or through regular TVs using streaming devices. Mobile phones and tablets allow viewers to break free of geographical constraints too. They can now watch their favourite movie or cricket match or game show in the car or in the office or while waiting for their doctor’s appointment. Or they could start watching on their TV at home and move the same show to their smartphone screen while heading out. Think about when was the last time you saw a bunch of people outside a TV showroom watching a match. Everyone has their own personal screen today!
- Affordable Internet: One big factor in boosting OTT growth is the growing availability of high-speed data at extremely affordable rates. As per a report from the Department of Telecom (DoT) in March 2018, mobile Internet rates in India have plunged by a massive 93 percent over the three preceding years. During this same period, data usage per user surged by over 25 times. Given the severely competitive environment for internet service providers and advances in technology, we can expect this trend to continue. With the advent of fibre-to-home services such the recent launch of the Reliance Jio GigaFiber, it becomes even easier for viewers to watch OTT content on TV.
In general, OTT Services provide several inherent advantages for viewers and content providers alike. For instance, the technology makes it possible to accurately measure viewership and get a better understanding of audience preferences. It also allows for detailed data analytics that can help inform future content strategies.
If current trends are any indication, we’re not very far from a scenario where OTT content becomes the default vehicle for viewers to consume content for entertainment and information. While replacing broadcast maybe a while away- content being screen agnostic is here to stay.
2018 a turning point for original content on OTT
Evolution in OTT space in India: Where next wave of growth will come from
Indian OTT market to reach $5 billion in size by 2023, says BCG report
Streaming brands set to gain from Reliance Jio’s broadband plans/
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