Over-the-top (OTT) content provider Hotstar appears to be very popular going by the downloads of its app at 130 million, reports fe Bureau in New Delhi, citing research from BofA Merrill Lynch. The success has come at a price—Novi Digital Entertainment, which runs the platform, reported a net loss of R409 crore in the first full year of operations, according to a filing with the RoC. Revenues from the business were R186 crore of which R24.1 crore came from subscriptions and R138.5 crore from advertising. YouTube India’s revenues are estimated at R700 crore.
While Hotstar’s content comprises programming across television, films and live sports updates, it has an edge over rivals thanks to its access to Star TV’s content ahead of the broadcast. The exclusive partnerships with Star, IPL and HBO Originals also seem to be paying off. The OTT market in India is estimated to grow to $272 million in 2017 from $202 million in 2016 with a better telecom infrastructure and rise in data consumption.
The number of data users in India at the end of March, 2016 was 325 million—that’s the population of the USA—and is expected to touch 620 million by March, 2020. With both smartphones and data becoming cheaper, consumers are able to watch content on their personal devices and small screens and do not necessarily need to rely on television programmes. Given how consumers are willing to pay for cinema tickets which are priced anywhere between R200 and R500, in multiplexes, they would be willing to pay for quality content.
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As such, India is at the cusp of a change in the pattern of viewing content. While the switch to the smartphone and tablets is currently more of an urban phenomenon, this should change in the years ahead. However, unlike in the US, there is unlikely to be any ‘cord cutting’ as cable spends at $3-4 are low.