Video OTT revenue in India expected to reach Rs 13800 crore by FY 2023

OTT is the new buzzing word and currently market is estimated to be about INR Rs 2,150 crore with the presence of more than 30 front-line players.

The category has more than 30 front-line players, including Netflix, Amazon Prime Video India, Hotstar, Sony LIV, Voot, Eros Now and Hooq, vying for viewers’ attention. And the list continues to grow with some major players trying to shake the market. Soon to join Times Internet’s MX Player, Paytm and another news of Flipkart jumping into the fray would only heat up the segment with lot of consolidation and partnership in near future.

With huge expected growths and revenue opportunities, the OTT revenue in India is expected to grow at a CAGR of 45 per cent to reach Rs 13,800 crore by the end of FY23, according to KPMG Media and Entertainment Report 2018. Currently, the OTT market stands at Rs 2,150 crore (FY 18).

Advertisement contributes about 80 per cent of this market (Rs 1,720 crore), while the rest is subscription revenue. With some significant increase smartphone penetration, improved infrastructure and availability of digital exclusive content, the number of online video viewing audience in India is estimated to be around 225 million in FY18 and is expected to double in next 4-5 years with whopping reach of about 550 million viewers by 2023.

What is the number of OTT subscribers in India?

OTT is slated to be big. Big would be understatement if we compare the Average Time Spent on OTT platforms vs the
most popular online platform YOUTUBE. The average time spent by subscribers on various OTT platforms varies from 30 to 50 minutes which is significantly higher than the YouTube which has an average of about 8-12 minutes.

Netflix had the highest engagement of more than 120 minutes, but their viewer count was around 20 million MUVs. Sony LIV had 30 million MUVs with 60 minutes as engagement (for the same month).

Some of the interesting finding of report suggest that the content remain king with not much loyalty among the users.
Much of the install and viewing is pivoted towards the fresh content and offering from respective players.

  • The numbers of players in the Indian OTT market have witnessed a 3.5x increase in the last six years growing from just nine players in 2012 to 32 in 2018.
  • Most consumers (81 percent) have up to 3 video/ OTT apps on their smartphone.
  • Further, all platforms struggle with retention of consumers- on an average 50 percent of OTT apps installed are uninstalled in the first 7 days of installation.
  • The competition for user share is intense-every OTT platform is vying to be among the top 3 of the consumer’s attention.

Hotstar, which was one of the early entrants in OTT market, enjoys the biggest share of pie however with international players like Netflix and Amazon Prime Video they have been feeling the pinch. The new entrants are investing heavily into local and original content in India and have seen surge in user base of the few months.

Hotstar, the video-on-demand service from Star India, has decided to take the war to rival’s courtyard and is reported to commit an investment of over Rs 120 crore on developing new content. Hotstar, which has the highest number of downloads (over 350 million) and claims of 150 million monthly active users, has so far relied on films, sports and catch-up content from Star India’s channels.  Sanjay Gupta, managing director, Star India told ET that 80% of the viewership on Hotstar comes from drama and movies,

While sports, which include Indian Premier League (IPL), BCCI matches, Pro Kabaddi, and Indian Super League, though give a spike in viewership, amounts only to about 20%.  With the changing behaviour and how content is being consumed the service providers are also relooking at their strategies.

With screens getting more personal and one-screen-per-person kind of scenario it is but imperative to look the newer avenues and ways of engaging the consumers.

And with consumers’ expectation of content changing, Hotstar has decided to “take the leap” on content.  For its first set of ‘Hotstar Specials’, Star India has partnered with storytellers including Shekhar Kapur, Neeraj Pandey, Kabir Khan, Nikkhil Advani, Ram Madhvani, Venkat Prabhu, Sudhir Mishra, Tigmanshu Dhulia, Nagesh Kukunoor, Mahesh Manjrekar, Vishal Furia, Rohan Sippy, Debbie Rao, Sharad Devarajan and Salman Khan.

The mega stars and big names making a way to small screen would surely make it worth a wait and watch. Besides Netflix and Amazon that has allocated $300 million for content in India,

Hotstar will have to fight with home-grown OTTs such as AltBalaji, SOnyLIV and HoiChoi, AltBalaji and Hoi Choi have already made huge inroads with their own original content in local languages which received good traction.

Plus, there’s Subhash Chandra’s Zee that has recently upped the OTT game with Zee5 which is available in 190 countries, disseminates content in 12 languages, and already has digital rights for 3,000 movies. And, Chandra wants to make Zee5 an immersive OTT experience through fresh investments.

We can clearly say the Interesting Times and Interesting Contents are awaiting us !!!

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