How much is too much? Asks the Indian consumer on paying for daily dose of entertainment

It was once believed that India had the cheapest prices for entertainment be it theatres or pay TV subscriptions. However, with time, that seems to no longer be the case. In fact, the Indian consumer is now spoilt for choice and money. Choice as there is too much content available at her disposal, but the price may not be of her liking. Truthfully, today the question is how much is more when it comes to paying for a daily dose of entertainment. “There has been an increase in overall spending on entertainment post the emergence of OTT primarily in urban households in the higher economic strata, however a lot of OTT platforms are bundled with the mobile subscription that doesn’t pinch much to consumers. But as compared to the OTT era the cost has gone up for consumers. Before OTT the average spend on TV was around Rs 300 per month, approximately Rs 3600 per year, which has gone up whilst adding the data cost for consuming OTT,” Ashish Golwalkar, a senior media consultant, told BrandWagon Online.

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Sample this: Typically monthly cost of pay TV ranges between Rs 500-600, add to that another Rs 1,000 for over-the-top subscriptions and anywhere between Rs 500-1000 per movie at theatres. So in a month an Indian customer needs to pay anywhere between Rs 2,500-3,000 to stay entertained.

OTT-sized hole in consumer pockets

The market of OTT has continued to grow as the appetite for entertainment of consumers has grown with differentiated content. The Indian OTT market is estimated to reach $5 billion by 2023, as per a report by Boston Consulting Group (BCG). 45 million households paid for 99 million OTT video subscriptions in 2022. Moreover, the top six metros accounted for 33% of the total paid subscriptions in India, as per the EY-FICCI report.

Not only has OTT cemented its niche, but the market is moving towards mainstream media. According to a survey conducted by Bango, 93% of Indian consumers have more than two subscriptions and 23% have more than six. Furthermore, bundling of OTT platforms with telco services has now become the new normal with telcos and OTT platforms partnering for a better reach and offering lucrative deals. In 2021, Indians spent $35 per person for media and entertainment, compared to just $19 in 2016.

OTT platforms have an abundance of content as original content. Almost 3,000 hours of original content were produced in 2022, recording an 18% growth from 2021 compared to this a general entertainment channel – in this case, Hindi has 7-8 hours of original content including the prime-time band that is between 7 pm-11 pm. “Linear TV continues to go strong with approximately 3.5 hours of TV viewing. In the peninsular region of India, the viewership can sometimes go up to four hours so the consumption of linear TV is still solid and intact,” Paritosh Joshi, a senior media consultant, said.

The cost incurred on the originals increased to approximately Rs 2,550 crore, with an average price per hour of Rs 830 crore, as per the EY-FICCI report. “While TV subscriptions might be shrinking, however, the time spent on watching TV continues to plateau. Moreover, OTT is witnessing a rise due to binge-watching, which averages to an exponential increase every year on year,” Vinita Shah, a senior media consultant, said.

Interestingly, data from a survey by Statista show that on average Indian viewers spent the most amount per month, Rs 709 on e-learning subscription services per household. In comparison, the least amount was spent on music streaming subscriptions with approximately Rs 416 per month per household.

While people would believe the emergence of these platforms would have some impact on television viewership, that is not the case. According to industry experts, television viewership of linear TV remains intact on the back of a strong viewer base. According to the EY-FICCI report, television remained the largest contributor to content production, at 96%, whereas OTT content increased 18% over 2021. “While the overall purchasing power and content appetite continue to increase for Indian consumers, they were seen migrating to OTT platforms before the implementation of New Tariff Order (NTO) 3.0. The arrival and implementation of NTO 3.0 has accelerated the migration process. Many households have already migrated to OTT from television,” Shah added.

In contrast, some experts believe that while TV is going strong, entertainment might phase out TV as OTTs become the go-to source of entertainment. However, the phasing-out process will be slow. Television broadcasters including Disney Star, Zee Entertainment Enterprises and Sony Pictures Networks India have turned off signals to cable operators going off air for nearly 45 million subscribers in India, as per various media reports. The move came on the back of television broadcasters increasing prices of bouquets and popular channels between 10-15%, under the New Tariff Order 3.0. The price increase has led consumers to search for better avenues while only opting for free-to-air channels (FTA) coupled with OTT entertainment.

Movies: an alternate route?

The increasing appetite for content consumption has resulted in movies returning to pre-pandemic levels. Box office surpassed the Rs 10,000 crore mark in 2019, closing at Rs 10,948 crore. 2022 came close to surpassing the record. However, it fell short of accounting for Rs 10,637 crore, according to an Ormax report. The box office collection in January stood at approximately Rs 1,388 crore, courtesy of Shah Rukh Khan-starrer Pathaan. In June, the gross box office income was upwards of Rs 1,000 crore with multiple regional movie launches. The cumulative box office earnings from January-August 2023 stand at Rs 7,444 crore which is four percent higher than the same period in 2022. “Bollywood Movies have picked up only in the last quarter (July to September) which has mainly to do with the quality offerings in that quarter -Rocky Aur Rani Ki Prem Kahani, Gaddar 2, Oh My God 2, Dream Girl 2, Jawan and Fukrey 3. Four out of these six films are franchise films, also two films – Gaddar 2 and Jawan are high octane action films which have generated huge shares from the massy centres,” Sanjay Chhabria, founder, Everest Entertainment, said.

The report predicts that on a current pro-rata basis, 2023 might surpass 2019 numbers and cross the Rs 11,000 crore threshold. “People have realised that if you want to allow the suspension of disbelief, it would only happen by being in the movie theatre. The success of Jawan is continuing evidence that people have not lost the big screen appetite. It has only grown further. It is not a duplicable experience,” Joshi, added.

The average ticket size of PVR has gone to Rs 246 in 2023 from Rs 178 in 2015. Jawan, recently, became the most-watched Indian movie in theatres with approximately 3.5 crore footfall.