Video streaming market in India to reach $5 billion by 2023: BCG report
New Delhi: The over-the-top (OTT) video streaming market in India is set to touch $5 billion by 2023, according to a report by Boston Consulting Group (BCG). The expansion of the country’s online video base is likely to be driven by rising affluence, increase in data penetration in rural markets and adoption across demography like women and older generations, BCG said in its titled Entertainment Goes Online report.
At a size of $500 million, 82% of the users in the Indian market are currently engaged on advertising-led video-on-demand platforms (AVoD) versus 18% who pay for content on subscription-led (SVoD) services, the report said.
The report estimates that by 2023, there will be 40-50 million users paying for SVoD content while 600 million will be engaged on AVoD platforms. Development of strong content pieces and the evolution of a paying habit will be responsible for strong SVoD growth, the report said. Like developed markets, most users will use two to three OTT apps. While most OTT services started off with movies and a licensed library, the current focus, led by American streaming service Netflix, is on creating original content. Further, the launch of Reliance Jio in September 2016 has heralded a new era of media consumption on the mobile in the country. The report is based on a consumer survey and seeks to understand their motivations in adopting OTT content over other conventional modes of content delivery. Survey results showed that there is room for many types of OTT models including SVOD, AVOD and TVOD (transaction-based platforms) to succeed in the market.
“Majority of India consists of single TV households. Affordable data has created an alternative medium where consumers, for the first time, can tap into content on the basis of an individual’s preference at a time and space convenient to them. While the current market operates with a largely advertising paid content paradigm, consumers are not averse to paying for the convenient content access that OTT unlocks,” Kanchan Samtani, partner and director, BCG, said in a statement.
The study identified three types of consumers in the Indian market. First are the traditionalists who primarily consume content on media other than OTT platforms, these are heavy watchers of television and are distributed equally across metros and tier-one and tier-two cities. Then are the OTT experimenters who have significant consumption on both conventional and OTT platforms but are heavy watchers of AVoD content, 60% of these are present in the metros. Finally, there are the early adopters—whose primary consumption occurs on OTT platforms and mostly on SVoD services, 70% of these are found in metros. While early adopters are still a more urban phenomenon, going forward it will be more equally distributed.
By 2023, 650 million or 48% of India’s Internet users are expected to be from rural areas, the report said. With development of regional content by various players, the rural market is poised to become a significantly large opportunity for players.
There are an estimated 197 million households in rural India with a TV, of which 160 million are cable and satellite (C&S) households, while smartphone penetration is multiples of that and growing. Given the challenges of electricity availability, TV screen, C&S connections, it is possible that rural India adopts OTT even ahead of C&S viewing in some pockets. The report estimates that nearly 50% of Internet users in India, by 2020, will be from rural India and rural internet penetration could grow to as much as 35%.
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