VOD to drive Indian OTT sector and hit US$5BN mark by 2023
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Rebecca Hawkes
| 21 November 2018

India’s over-the-top (OTT) video market will reach US$5 billion (INR35,700 crore) by 2023, up from $0.5 billion in 2018, according to a report from the Boston Consulting Group (BCG).

Rising affluence, increase in data penetration to rural markets, and adoption of online video by women and older people have all helped drive revenue growth. "[The] majority of India has a single TV per household. Affordable data has created an alternate medium where consumers, for the first time, can tap into content based on individual preference at a time and space convenient for them,” said Kanchan Samtani, partner and director, Boston Consulting Group.

“Whilst the current market operates with a largely advertising paid content paradigm, consumers are not averse to paying for convenient content access that OTT unlocks,” he added.

The results of a consumer survey showed that a range of OTT models could succeed in India, including subscription video-on-demand (SVOD), advertising video-on-demand (AVOD), and transactional video-on-demand (TVOD).

Of the estimated 650 million Internet users in India by 2023, nearly half are expected to be from rural areas. With increased focus on developing regional content the rural market is poised to become a significantly large opportunity for OTT players, said the Entertainment Goes Online study.

Indian content, including music, Bollywood content and cricket, also have a large following in the Indian diaspora, the study found.

“While the NRI content market is huge and demonstrates willingness to pay, it is not only dominated by cricket – Bollywood music and films are very significant. With their large content libraries, Indian OTT players are sitting on a metaphorical gold mine to serve this increasingly important customer base”, said Boston Consulting Group’s Gaurav Jindal.

Although it holds promise, the Indian OTT market currently lacks the penetration and maturity of video-on-demand sector in the west. Greater marketing and user engagement tools should be explored, thought researchers.

“One of the key insights of our consumer work was that, while OTTs rely on top-notch hero content to attract consumers to the platform, the stickiness of these consumers is not very high unless accompanied by ways in which they engage more deeply with the platform and is associated with strong marketing efforts,” added Samtani.