2020: The tipping point for the Indian OTT ecosystem

It was a stupendous year for streaming services in more ways than one


KOLKATA: The Covid2019 pandemic has walloped many industry verticals this year but digital-first categories including over-the-top (OTT) or streaming video services have actually been given a leg up. A host of new users, paid subscribers have tuned in to consume online platforms, due to stay-at-home directives, limited social activities, enforced theatre shutdowns, fewer entertainment options. With multifold growth across metrics, the sector has witnessed growth that would have normally taken four to five years.

The Indian OTT industry has been steadily growing in the past couple of years, especially since Jio democratised internet for the country’s masses. As the country entered into lockdown, fresh content on TV dried up and OTT platforms emerged as the most sought after medium for entertainment. India’s data consumption went through the roof with demand on OTT and VoD platforms rising by a whopping 947 per cent within July compared to the pre-pandemic period, according to data from internet exchange DE-CIX.

As the curtains to 2020 are being pulled down, we look at not only statistics but at the emerging trends as well.

Indian consumers are willing to pay more than ever for OTTs:

Along with the growth in consumption and users, the number of paid subscribers has also gone up during the year. Back in 2017-18, there was a myth in the market that Indian subscribers would not pay for premium content. While 2019 was already indicating otherwise, 2020 has strongly broken all notions. According to a Boston Consulting group report, pandemic has increased growth of over-the-top (OTT) subscriptions by 60 per cent. It is not only a fad but more than half of these new users are likely to continue using the service. A PwC report has also forecast that subscription based video-on-demand (SVoD) will be the prime driver of revenue, growing at a 30.7 per cent CAGR.

 Although global streaming giant Netflix has not released any country-focused data as yet, it is likely to end the year with 4.6 million paid subscribers in India, as per estimates from researcher Media Partners Asia (MPA). Previously held estimates for 2019 were two million subscribers. Media giant The Walt Disney Co. (Disney)’s digital arm Disney+ entered in India combined with the existing Hotstar service as Disney+Hotstar. Now, Indian streamer accounts for 30 per cent of Disney’s overall subscriber base that is 26 million subscribers. Among indigenous players, ZEE5 also contributed significantly to its parent company’s overall revenue, thanks to its subscription revenue growth. Other platforms like ALTBalaji saw daily additions of 17,000 subscribers at the beginning of lockdown. Newly launched subscription services like Voot Select, Discovery Plus also claimed that the platforms exceeded expectations around customer acquisition.

Launches, relaunches, the rush continues, even as some exit

India is seen as the new streaming Mecca and the OTTs are rushing in like lemmings.  Both international and local players launched their services this year. Apple+ which launched towards late 2019, pushed forward with its customer acquisition plans through the year. And one of the most awaited services, Disney+ entered the country through its Indian cousin Hotstar, part of the Star India network, which it acquired the previous year from Twenty First Century Fox. The service was branded Disney+Hotstar and it was introduced just as India was entering the Covid2019 lockdown. Discovery began its video streaming journey with the launch of Discovery+. Hollywood Studio Lionsgate strengthened its direct-to-consumer presence with Lionsgate Play, while it was playing earlier in a distribution partnership model. SonyLiv went in for a relaunch, serving out a very different looking new version Voot from Viacom18 introduced its Voot Select offering.  ErosNow – a part of Eros Media – went for a refresh announcing the launch of new extensions and services  after its merger with US entertainment mid-sized player STX Entertainment.  

 A host of new hyperlocal platforms have also been launched like Aha as they strive to capture a piece of the regional language preferring audiences. Telugu diaspora targeted YuppTV took another shot at domestic audiences by launching an educational service as well as launching new shows.

Like in satellite television, pan Asian or global  streaming services backed with relatively less capital and by local entrepreneurs, went belly up or restricted their focus on specific countries. Five year old Hooq – a streaming service which promised a lot – shut shop by May 2020, including its Indian operations. The just as the year 2019 was ended, another streamer Viu promoted by HongKong based PCCW, wound up in India.  The biggest disaster was the downward spiral of the Jeffrey Katzenberg-Meg Ryan run short from professional produced video streamer Quibi after guzzling down nearly a billion dollars in investment worldwide. In the US, AVod service Tubi, which had its eye on India, was acquired the Murdoch-run Fox Corp for $440 million. Expect some India play from this player going forward.

OTT platforms increases direct-to-digital releases:

The streaming services started premiering movies directly on the platforms earlier but this year saw movies with big names also debuting on those platforms as theatres were closed for six months across the country. Deep-pocketed  players including Amazon Prime Video, Disney+Hotstar went aggressive to acquire big-budget movies. A PwC report has stated that global SVoD revenue will overtake box office spend in 2020.

At the initial phase of the lockdown, Disney+Hotstar launched  its ‘Multiplex’ feature and went on an acquisition binge acquiring titles such as Laxmmi Bomb, Dil Bechara, Lootcase, Sadak 2. Amazon Prime Video, the Jeff Bezos owned platform, also released Gulabo Sitabo , Shakuntala Devi and several others. Netflix jumped on the bandwagon with the likes of Ludo, and  Gunjan Saxena. Platforms like SonyLIV, Zee5 also turned to old, unreleased films. This trend is not only limited to India but is reflected globally. For instance, WarnerMedia has announced to release its entire 2021 movie slate on HBO Max and simultaneously in theatres. At the same time, ShemarooMe also launched Box Office to release small budget Bollywood movies. 

Higher investment in original content:

As the user base, consumption rate grows; appetite for quality premium content amongst India’s massive populace has also ballooned. For consumer stickiness, broadcaster led OTT platforms are heavily investing in original content. One of the early movers in the OTT segment SonyLIV has reinvented itself this year with a higher focus on churning out original content like its runaway hit Scam 1992. The idea was to increase its subscriber base significantly. Viacom18’s Voot also launched a subscription service called Voot Select with a promise of releasing more than 30 originals. Other international OTT players like Amazon Prime Video, Netflix, Disney+Hotstar are also upping their content significantly. London-based technology research and consulting firm Omdia has projected that the three OTT players are expected to collectively spend approximately Rs 2824.9 crore ($383 million) on original content in India in 2021.The OTT players are collectively expected to spend Rs 4,905 crore ($665 million) in 2021. However, Covid2019 restrictions have postponed around 30 per cent of the projects programmed to start in 2020.

Enriching content library with diverse content, new features:

Many of the OTT players are aiming to build themselves as super apps. ZEE5 has forayed into short-video category HiPi, gaming. Times Internet’s MX Player has also built a short video platform Mx TakaTak which has been considered as one of the most successful user generated apps post the  TikTok ban. To provide more value to users, ZEE5 partnered with an edu-tech platform at the beginning of the year. During the lockdown, Disney+Hotstar, Voot expanded their health and wellness portfolio on the back of new partnerships. Another niche area,  the kids segment , has also emerged as a big area of attention. While Voot already launched Voot Kids in 2019, ZEE5 added a dedicated section for kids this year with content focused on a blend of fun and learning. Amazon Prime Video which has already established a stronghold with its rich original content, has forayed into live sports acquiring rights for broadcasting New Zealand cricket matches in India. 

Rising regional market:

A recent BCG-CII report has shown that 35-40 per cent of the consumption on OTT services happens in local languages. And the hours of original programming in local languages have tripled in the past two years standing at 1,400-1,800. Throughout the year, a number of hyperlocal platforms have sprung up. Many among them, like the Telugu language Aha have committed huge investments to release more than 50 originals in a year. Bengali OTT platform Hoichoi has also announced a huge line up of content on its third anniversary. SunNXT is also looking at investing Rs 200 core for original content in FY 22. National players like ZEE5, Voot, and MX Player have strengthened their local offerings producing many hits across languages. Even international players have also gone deeper into regional markets as digital infrastructure across tier-II and III cities and  rural areas has increased, gradually leading to more traffic.

Business models expand

The year 2020 also saw attempts being made at unearthing a new business model transactional video on demand, with ZEE5, Shemaroo and bookmyshow announcing initiatives in this direction. The latter two at least have been planning their services seriously in building such a model. They are taking heart from the tremendous success that Universal’s Trolls World Tour had from digital rentals logging in almost $100 million in collections.

Of course, the most prevalent model in the OTT ecosystem is the AVoD one or one that depends on advertising and offers free content to subscribers. Amongst the biggest players in this space is MX Player which claims around 200 million subscribers. Of course all the Indian majors – Disney + Hotstar, ZEE5, SonyLiv, Voot - have skin in this game, but their premium shows, sports events, and films are behind pay walls. The free content is used to upsell subscribers to premium services. Advertising is expected to contribute 43 per cent of all OTT revenues.

Almost every player experimented with pricing during the year. Netflix was the prime example with the introduction of the mobile only plan of Rs 199 per sub in 2019, followed by a mobile+ package of Rs 349 in 2020 which offered streaming to handsets, tablets or laptops. Others too launched varying pricing points to cater to different audiences.  

Connected TV viewership growth:

The lockdown has not only increased consumption but has brought significant change in how online content is consumed. While India has been always described as mobile centric market, the growth in high-speed broadband connectivity, and affordable smart TVs has brought more users to connected devices. Moreover, the spike in family viewing has boosted connected TV viewership. A few leading players like ZEE5, Amazon Prime Video, Disney+Hotstar has seen it as a potential trend which can emerge soon. In addition to that, the steady rise in home broadband and increasing OTT partnerships with internet service providers will boost the viewership.

Challenges ahead:

2020 has definitely been the tipping point for Indian OTT market, albeit few challenges. The regulatory intervention into online content has ignited the fear of censorship with a negative sentiment looming over the players, and the creative fraternity. A number of petitions are pending before several Indian courts challenging a number of shows. While users flock to OTT platforms for more progressive content, it would be a challenge for the latter to balance between creative freedom and the regulatory noose.

Latest Reads

Netflix’s Monika Shergill talks about crafting stories for every mood on OTT

The OTT platforms have taken the world by storm. If there is one key trend that has completely revolutionised the way content is now being created across mediums, it is definitely these new-age platforms. And leading the way is OTT giant Netflix which currently boasts of over 209 million...

Specials Event Coverage Content Hub
“The idea whose time had come”: Hansal Mehta on making financial thriller 'Scam 1992'

When the ten-part series Scam 1992 hit SonyLIV platform last October, it captured the imaginations of millions of young Indians in no time. The financial thriller chronicling the life of Gujarat-based stock broker Harshad Mehta, and his involvement in the 1992 Indian Stock Market Scam soon became...

Specials Event Coverage Content Hub
Content Hub 2021: How OTTs met the burgeoning demand for content in 2020

Any talk of content in a post-pandemic world is incomplete without deliberating on the impact it has had on the OTT industry and vice versa. The fifth edition of the ‘Content Hub 2021 - TV, Film, Digital Video, and Beyond’ organised by Indiantelevision.com.

Specials Event Coverage Content Hub
Content Hub 2021: Growing relevance of language personalisation in OTT advertising

Mumbai: The last one and a half years have escalated the pervasiveness of the OTTs and streaming platforms in our lives like never before. Not wanting to lose out on their share of the OTT marketing pie, brands have begun exploring promotions and advertisements on these channels.

Specials Event Coverage Content Hub
Content Hub 2021: Content marketing - the most efficient tool for brand building

With five shows running across platforms, two delivered, and another five lined up for 2021, TVF president Vijay Koshy is looking forward to an exciting second half of the year!

Specials Event Coverage Content Hub
Content Hub 2021: Viacom18 Studios' Ajit Andhare talks about creating cinematic experience on OTT

As theatres remain shut all through the pandemic, audiences were left with no option, but to turn to the OTT platforms for entertainment. The transition compelled major studios, and production companies to take a relook at their strategies and gear up for the big digital revolution that began...

Specials Event Coverage Content Hub
Content Hub 2021: Television – A Twist in the Tale

At the fifth edition of the ‘Content Hub 2021 - TV, Film, Digital Video, and Beyond’ being organised by Indiantelevision.com, veteran producers from the media and entertainment industry delved into the state of television programming in the context of growing competition from OTT platforms.

Specials Event Coverage Content Hub
Content evolves, but the heart of storytelling remains the same: Boman Irani

Almost two decades after making his debut in the Hindi film industry, renowned actor Boman Irani is now all set to don the writer’s cap for his first movie as writer-director. “Writing is the way to go,” says Irani emphatically, as he begins to share his vision of filmmaking on the first day of the...

Specials Event Coverage Content Hub
Content Hub 2021 : Insatiable demand opens up vast opportunities for content creators

New Delhi: The pandemic may have stalled theatrical releases of big budget movies, but people will throng cinema halls once the pandemic situation eases out, opined leading film, TV and OTT producers as they gathered to discuss the entertainment industry’s evolution at the fifth edition of the...

Specials Event Coverage Content Hub

Sign up for our Newsletter

subscribe for latest stories

* indicates required