industry

Indian OTT market has a potential to reach $5bn by 2023: BCG


MUMBAI: Access to affordable data, mobile penetration into rural markets, rising affluence and adoption across demographic segments including women and older generations are some of the key drivers that will help the Indian over-the-top (OTT) industry to unlock its potential and reach a size of $5 billion by 2023. These are the finding of the latest report by The Boston Consulting Group titled ‘Entertainment Goes Online’.

As per the report, OTT content market in India is at an inflection point in India. And while there are various business models, including SVOD (subscription-based platforms), AVOD (advertising-based platforms) and TVOD (transaction-based platforms), the market is still at a nascent stage with lots of promise.

“There are over 30 OTT apps and the study shows that over 80% of users don’t use more than 3 apps, so breaking from the clutter becomes the biggest challenge. But what we are seeing is that consumers are lapping up to the medium, and while India is a price sensitive market, many of the consumers are willing to pay, if they see value,” said Kanchan Samtani, Partner & Director, The Boston Consulting Group.

The report points out that even as the market is largely advertising-led, consumers are willing to pay also. “We see 40-60 million paying subscribers by 2023,” Samtani said.

Incidentally, rural will play a big role in OTT consumption. The report said that 48% of India’s internet users (~650 million by 2023) are expected to be from rural areas. “With increasing mobile penetration in tier 3, tier 4 and rural areas, there will be many consumers who will be OTT first, who have never consumed content on TV,” said Samtani.

Additionally, with 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.

The report also notes that OTT Players with Indian content have potential to tap into the international markets too, where there is a large diaspora paying higher ARPUs for content.

However, a big challenge will always be the stickiness on the platform, for which OTT players will not only have to invest on content, but also on marketing as well as subscriber acquisition and retention strategy.





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