Over-the Top (OTT) video viewing is a digital wave transforming the way we consume videos in India. Television is viewed almost everywhere, on-demand, on-the-go, across devices and geographies, owing to burgeoning OTT platforms coupled with rapidly increasing Internet services. With increasing bandwidth capacity and falling prices, telecom operators are engaged in price wars to offer the best bundles for voluminous media consumption. The growth in smartphone penetration and improvement in Internet speeds are disrupting television screening, evolving into a multi-screen, time-shifted, mobile environment with viewers deeming their smart device as their primary source of media and entertainment. The OTT video market in India is bustling with competition, as leading operators Hotstar, dittoTV, Jio TV, Amazon Prime Video, Netflix, ErosNow, and YuppTV battle to penetrate this lucrative market. According to Frost & Sullivan, there were 70 million unique video viewers in India in 2016, with 1.3 million paid subscribers. Currently there are at least 80 Million unique connected video viewers, with at least 1.75 Million OTT paid video subscribers. With a high growth rate of almost 30%, this number is rising rapidly with the recent unveiling of Jio’s services.

OTT platforms offer linear and exclusive content at prices varying from INR 5/day to INR 20/month (dittoTV), and up to INR 650/month (Netflix). They bundle free and premium content together (freemium) in order to showcase their offering to customers and convince them to pay for more content. The short-term and base packages cater to the need of every viewer and ensure a comprehensive reach to the platform as they try to penetrate through rural and underserved audiences. Pay-per-view is another option to gain access to a particular title without opting for a bigger package. This makes economic sense to television viewers across the demography to choose their content and pay only for the preferred videos consumed, instead of being coerced into subscribing to bulk packages on DTH and satellite television in which majority of channels remain unwatched. This segmented, personalized, niche offering is what makes the OTT platform unique, posing a strong contention to linear television. However, subscriptions are fragmented and fluctuate dramatically every month, as subscribers tend to try a service for a month and either migrate to another service or discontinue for lack of preferred content. As the market is still emerging, it is a long way until subscription revenue becomes the major contributor to the platforms, as the sustenance of most OTT platforms is currently dependent on advertising revenue.

The demise of appointment viewing and lack of patience to view rationed shows have paved the way for binge watching and personal escapism. The need for multi-screen TV viewing is resonating in viewership patterns dispersed across devices and geographies. Content offered on an OTT platform can either make or break the business. As content dictates the kind of audiences that subscribe to it, a compelling, constantly updated library is what will keep the consumer hooked, while yearning for more. The offerings include live and catch up TV, recommended videos, multiple device viewing, offline viewing, download options, personalized playlists, ad-free viewing and so on. Some players shadow their linear content broadcast on television, with additional features so that we no longer have to adhere to television schedules and can view at our convenience and time preference. More platforms are moving away from conventional content and investing in exclusive production of edgy, youth-centric shows and other content for OTT portals to help amass newer audiences and pique the interests of target viewers. This is achieved by an amalgamation of ecosystem participants and strategic alliances for co-creation of content for specific age-groups, seasons and events. Sports events such as IPL are simulcast on OTT platforms, catering to a global fan following, raking in high viewership and providing alternative screening avenues. There is huge opportunity for regional content, English premium content from international studios, as well as Hindi staples which have avid followers across the multi-lingual and culturally diverse nation. The uptake of OTT subscriptions is augmented by the diverse international diaspora that has limited access to their regional and vernacular content. International operations of local platforms witness higher subscriptions as there is a clear gap in the regional content provided by their local providers. The availability and adoption of data analytics and measurement tools in this digital space have churned out viewership patterns, recommendations, and content requirements. This aids OTT providers to target audiences with the ideal content mix and alter their content repository based on history and analysis of traffic.

The OTT market is riding on the mobile revolution in the country, as 75% of videos are consumed on mobile devices. With newer platforms such as ALT Balaji and Jio TV foraying into this dynamic market and people exploring connected living, there will be a paradigm shift in the way India watches television. The price-conscious consumer is now willing to pay for high quality videos and fresh content. The onus is on the OTT providers to deliver and meet the requirements of an evolving audience. Although OTT services may not eliminate traditional TV in the near future, the growing patronage is testament to a revamping of the television industry.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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