The size of the OTT market in FY20 stood in the range of US $1.7 billion (both video and audio)
As more people turn to Over the Top (OTT) platforms with access to better networks, digital connectivity and smartphones, the industry has the potential to grow to be a US $15 billion industry over the next nine to 10 years, according to a report by independent transaction advisory firm RBSA Advisors. The size of the OTT market in FY20 stood in the range of US $1.7 billion (both video and audio).
As per the report, the key factors driving the industry in India are that the country has the second-highest per capita consumption of online video in the world, cheapest mobile data at Rs 18.5 per GB, growing rural internet penetration, as well as an increase in the number of smartphone users. It also highlighted that the average monthly data usage per user in India increased 20% year-on-year to 13.5 GB in December 2020 as Indians spent about five hours daily on a smartphone, as per the Mobile Broadband India Traffic Index (Mbit) 2021.
Covid-19 has changed the way audiences consume media, Rajeev Shah, MD and CEO RBSA Advisors, said. “An undeniable trend surfaced in this period with the adoption of OTTs. The growing market and consumer appetite for content of choice available on OTT platforms fuelled this spurt. OTTs offer a never before consumer experience–choice of content, ease of access, choice of device/mediums (hand phone, laptop, tablet or TV screen), liberal censorship policy,” he added.
The report also stated that the next wave of growth in the OTT landscape will come from tier 2, tier 3, and tier 4 cities and the Indian language speaking population. “The viewing habits of Indian consumers have evolved a lot in the last few years. While on the one hand, short-form video content consumption on smartphones and social platforms has been on the rise, binge-watching shows on various OTT platforms have also become more common on the other hand,” it said.
For Vivek Menon, co-founder and managing partner, NV Capital, India is the next bastion after the US for boosting the subscriber base of international OTT players given the highly regulated environment of international OTT players in China. “Add to that there are many international entrants like Comcast-owned “Peacock” and HBO sitting on the fence waiting to make their mark in India. Looking at this trend as well as the rapid rise of home-grown OTT providers, this industry will continue its strong growth momentum in the years to come,” he stated.
The quality of content will always remain a significant driver of consumer growth. In recent years, there has been a massive rise in original content being aired on OTT platforms. Apart from creating original content and facilitating binge-watching, networks and production houses have also begun to see value in getting rights to live events and performances.