India had 70-80 Mn paid OTT subscribers in 2021; sector in ‘scaling stage’: CII-BCG

Few industries have gained from the COVID-19 pandemic as much as digital entertainment has. OTT or video-streaming continued its sharp growth trajectory for the second year in a row, and was worth a $1.8-2.2 Bn industry at the end of 2021, according to a CII-BCG joint report. 

It is expected to reach $13-15 Bn by 2030 at a CAGR of 22-25%, with digital poised to be the fastest-growing segment of Indian entertainment.

The CII-BCG report titled ‘Blockbuster Script for a New Decade’ reveals that India had 70-80 Mn paid subscribers of OTT platforms at the end of 2021, up from 14 million in 2018 and just 0.5 million in 2014-15. The sector has matured from ‘early stage’ to ‘scaling stage’ in the last 3-4 years. 

Much of the growth has been driven by the pandemic, which made video-streaming a lockdown favourite for hundreds of millions of Indians, and the only avenue for fresh releases with theatre shutdowns. There has been a 4X jump in the number of OTT services in India since 2015, with hordes of global, local, and regional players now jostling for eyeballs. 

Mandeep Kohli, Managing Director and Partner, BCG India, said, “The OTT sector is one of the most competitive amongst emerging markets with 40+ players representing all types of content providers. The share of traditional media is slowly declining with increased digital adoption.”

Even though India’s OTT revenues are largely driven by advertising today, subscription revenues are growing at a faster pace. Subscription video-on-demand (SVOD) is projected to account for 60% of OTT revenues by 2030. 

“SVOD revenue has seen a remarkable surge over the last few years and is expected to overtake AVOD in the coming years. This strong growth in subscription is due to various initiatives taken to expand the user base through bundling and pricing innovations, amply supported by significant investment in content,” CII-BCG states in the report.

Top Trends & Growth Drivers

1. Premium and original content 

This has been directly proportional to the rise in OTT consumption in India. Not only has it boosted subscription growth, but it has also made Indian content global. For shows like Sacred Games, for instance, 2 out of 3 viewers (67%) came from outside India, states the report. 

OTT investment in original content has also gone up by 30-40% from $180-200 Mn in 2017 to $600-700 Mn in 2021. Additionally, original programming hours on OTT platforms has increased by 60-70% from 500-600 in 2018 to 2,400-2,600 in 2021. 

“Originals continue to be the biggest subscription driver on OTT platforms and help build audience stickiness. They have a longer shelf life and help in attracting new subscribers even years after the launch date,” the Business Head of an Indian OTT service was quoted as saying.  

2. Regional content

Regional is a huge draw for OTT viewers in India. Deeper content in regional languages and culture-specific micro-genres are expected to be major drivers of OTT subscriber growth in future too. On platforms like Disney+ Hotstar, more than 40% of the content consumed is in Indian languages, which also mirrors Star’s strong presence in regional TV.

On Amazon Prime Video, for instance, almost 50% of the viewership for regional language films came from outside home states (the language of the film). CII-BCG calls its Amazon’s “regional is the new national” bet. Amazon’s India-focused Hindi originals like Mirzapur, Bandish Bandits, Family Man, Panchayat, among others also met with great success.  

Since the first lockdown in 2020, nearly 50-55% of all direct-to-OTT film releases have been regional titles. “Streaming has provided new avenues for screening and broad-based the options available for producers, artistes and technicians,” says Siddharth Roy Kapur, Co-Chairman, CII National Committee on Media & Entertainment and Founder, Roy Kapur Films.

While homegrown OTT services like ZEE5 and ALTBalaji have always had a strong focus on Hindi and regional content, the likes of MX Player (owned by Times Internet) bring international content dubbed in 10+ Indian languages through its “MX VDesi” offering. 

3. Pricing & Other Innovation

The pricing of global streaming services has played a critical role in their rapid adoption in India and the overall growth of the sector. 

CII-BCG indicates that Netflix, Amazon Prime Video, and Disney+ are offering their plans in India at 70-90% cheaper rates than in the US to penetrate beyond the metro cities.

Besides affordability, the global streaming biggies are also bundling services with telecom plans and rolling out mobile-friendly packs along with extended free trials and benefits. Offline payment mechanisms like top-up cards (Hoichoi) and doorstep delivery of Prime subscriptions (Amazon) are other innovations that have aided OTT growth.

Besides value-for-money plans, Indian OTT users also look for features like content downloads and offline viewing, multi-device support, concurrent video streams, extended trial offers, and so on. 

However, despite the increasing affordability of video-streaming services, cord-cutting is still at a nascent stage in India because pay-TV continues to be cheaper than OTT, unlike in mature markets of the West. 

But the trend is likely to reverse by 2030.

Also read: Indian streaming industry likely to grow $13-15 bn over the next decade

Also read: OTT platforms like Netflix, Prime Video and others to have 650 million users by 2025: Bain & Co.