Hotstar did it with IPL, OTT is closing in on regular TV!

With over 200 mn watching IPL on Hotstar, OTT apps tasted their first big success.

Of every100 million new Internet users, 96 million are coming in via mobile phones.

While it might seem unthinkable today, there are those willing to bet the audience for video streaming platforms will close in on that for television channels in less than five years. For sure claims by Hotstar that 202 million watched the IPL are not authenticated by a third party. But then the number of 4G users is expected to hit 700 million or more by 2023, from 400 million currently. That would probably be some distance away from the estimated 900 million television viewers at the time. But getting to 750 million may not be such a stretch.

It’s true much of the hype around online video viewing—and the advertising revenues it could generate — is created by media agencies partly because they make better commissions. Ashish Bhasin, chairman & CEO, Dentsu Aegis Network, estimates advertising revenues for digital platforms will grow at three times the industry average around 10%.

Currently, digital accounts for just 15% of the pie — Rs 8,202 crore in 2017 — but could soon account for a fourth of the pie. GroupM estimates video advertising on digital will grow by 54% in 2018; the total digital advertising revenue is estimated at Rs 12, 340 crore.

But the players too seem to be optimistic. Uday Sodhi, EVP, SonyLiv, expects the OTT audience could double to around 500 million by 2020 from 250 million in 2017. SonyLiv today may have just 30 million monthly active users (MAUs) but Sodhi is confident the under-penetrated Tier II and Tier III markets will bring in big numbers.

Think about it this way. Of every100 million new Internet users, 96 million are coming in via mobile phones. Of this, at least a fourth or 24 million own smartphones. Given the hunger for content — even if it is old television content — and the falling prices of smartphones, this share could be even higher at 35-40% within next two years. But that’s just about 35-37 million viewers and to get closer to TV viewership, the share would need to be far higher.

But it’s also a fact that users are now consuming 6-10 GB/month on smartphones and primarily watching content. Market watchers also believe that at some point consumers will start paying for good content. Monthly cable or DTH bills in Indian households average Rs 200 per month — but today consumers aren’t coughing up this amount to access premium OTT content. Analysts at Bank of America Merrill Lynch (BofAML), however, point out Indians have been inclined to spend more on films for instance — Multiplex tickets cost Rs 400-600 in urban areas. “We, hence, believe that if properly marketed and priced, Indian consumers over time could spend more in the direction of content,” Sachin Salgaonkar and Sukriti Bansal wrote recently.

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