Entertainment Goes Online - A $5 Billion Opportunity In India

Over-the-top (OTT) content market in India is at an inflexion point in India, as per the latest report by The Boston Consulting Group titled Entertainment Goes Online. The report pegs the Indian OTT market to reach $5bn in size by 2023. This growth is being driven by rising affluence, an increase in the penetration of data into rural markets and adoption across demographic segments including women and older generations.

The ‘Entertainment Goes Online’ report is based on a first-of-its-kind consumer survey that seeks to understand consumers’ motivations in adopting OTT content over other conventional modes of content delivery. Survey results showed that there is a room for many types of OTT models such as SVOD (subscription-based platforms), AVOD (advertising-based platforms) and TVOD (transaction-based platforms) to succeed in the market.

“Majority of India has a single TV per household. Affordable data has created an alternate medium where consumers, for the first time, can tap into content basis individual preference at a time and space convenient for them. Whilst the current market operates with a large advertising paid content paradigm, consumers are not averse to paying for convenient content access that OTT unlocks,” said Kanchan Samtani, Partner & Director, The Boston Consulting Group.

Affluence and the wide variety of content being developed for OTT market including diversity in genres and language gives OTT market a favourable edge over its traditional counterparts. The study identified three archetypes of customers in the Indian market:-

1) Traditionalists – who primarily consume on other than OTT platforms

2) OTT Experimenter – who has significant consumption on both conventional and OTT platforms

3) Early Adopter – whose primary consumption occurs on OTT platforms. While early adopters are still a more urban phenomenon, going forward it will be more equally distributed. 48% of India’s internet users (~650 million by 2023) are expected to be from rural areas. With the development of regional content by various players, the rural market is poised to become a significantly large opportunity for players. OTT is riding the wave of increased data consumption and internet access in rural India, has opened a new distribution channel that is viable for regional and niche content. Indian content including music, Bollywood and cricket have a large following in the Indian diaspora.

OTT Players with Indian Entertainment content have the potential to tap into this market too. “While the NRI content market is huge and demonstrates the willingness to pay, it is not only dominated by cricket – Bollywood music and films are very significant. With their large content libraries, Indian OTT players are sitting on a metaphorical gold mine to serve this increasingly important customer base”, says Gaurav Jindal, Principal, The Boston Consulting Group.

“One of the key insights of our consumer work was that, while OTTs rely on top-notch hero content to attract consumers to the platform, the stickiness of these consumers is not very high unless accompanied by ways in which they engage more deeply with the platform and is associated with strong marketing efforts,” said Kanchan Samtani when discussing the subscriber acquisition and retention strategy of various OTT platforms.

While Indian OTT players have taken many steps to capture the market, there is a lot that needs to be done before, Indian OTT market achieves the same penetration and maturity as its western counterparts.

Excerpted from BCG Report, Entertainment Goes Online (OTT Platform)