India is the world's fastest growing OTT market: PwC report

CIOReviewIndia Team | Thursday, 22 October 2020, 10:40 IST

Blessed as the world’s fastest growing OTT (over-the-top-streaming) market, India is all set to emerge as the world’s sixth-largest by 2024. This market is expecting growth at a CAGR of 28.6 percent in the next four years which will touch revenues of $2.9 billion as predicted.

As per research findings by the Media and Entertainment Outlook 2020, a report by the multinational professional services network of firms, PricewaterhouseCoopers or PwC, OTT vide, and internet advertising, video games and e-sports and music, radio and podcasts are the top four segments expected to witness revenue growth in the country in the next four years.

Based on publicly available historical data collected from trade associations and government agencies, and interviews with players and regulators, PwC has crafted this report.

The global PwC report covers 53 countries and 

 segments which include traditional television, OTT, cinema, print, books, music and radio.

With the changing consumer behavior, it may impact traditional sectors such as cinema, and print adversely, digital E&M (entertainment and media) spending, which include OTT subscription and mobile data allowance, and it is being increasingly regarded as a utility. Hence, a non-discretionary expense, as the report suggests. The total M&E revenue by India is expected to grow at a robust rate of 10.1 percent and reach $55 billion by 2024.

The total of global M&E revenues will contract by 5.6 percent in 2020 over 2019.

Rajib Basu, partner and leader, entertainment and media, PwC India said, “The covid-19 pandemic has brought the growth of the M&E industry to a screeching halt and amplified shifts and digital disruptions that would have only happened in the years to come. The impact of the pandemic has not been felt equally across sectors, while movie theatres and live events, for instance, have taken a hit, covid has proven a boon for OTT.”

A huge investment made by OTT services like Netflix, Amazon, Disney+Hotsar, and others in originals and acquired content will help subscription video-on-demand make up 93 percent of the total OTT revenue (compared to 87 percent globally), increasing at a CAGR of 30.7 percent between 2019-2024, from $708 million in 2019 to $2.7 billion.

The latest at-home environment has created a rise of new direct-to-consumer apps, local ‘bite-sized’ entertainment platforms and user-generated content formats. 

In between, the covid-19 pandemic has resulted in a seven-month shutdown of movie theatres and several producers have taken their films directly to the digital platforms, OTT has seen tremendous gains at the expense of cinemas.

In 2018, SVoD revenues were a third of India’s total box office revenue which with the shift of eyeballs to digital platforms in the medium to long term will ensure India’s movie box office falls by 2.6 percent in the next four years as SVoD grows by 30.7 percent.

As a matter of fact, the report states that 2020 presents a key tipping point as SVoD revenue overtakes theatrical earnings, which Basu admitted may have been a function of theatres remaining shut for most of the year.

He said, “However, we expect SVoD revenues to be higher than box office even for the next three to four years."

Gaurav Gandhi, Director & Country General Manager, Amazon Prime Video India, earlier admitted in an interview to Live Mint news that covid-19 pandemic has led to a steady increase in subscription and engagement.

Gandhi had said, “There was a need for fresh content and we were able to provide that wholesome experience within the comfort of people’s homes." 

The quick premier of films strategy and consistent availability of new shows is important as stated by OTT executives, also the quality of content.

The presumption of people will take time to return to theatres even as they begin to reopen. But it is important for web content to also be clutter breaking.

Neeraj Roy, founder and CEO, Hungama Digital Media said, “All entities that only believe in quantity will have to introspect. There will be a problem of plenty if platforms are simply churning out content without making sure they have a unique bouquet to offer."

Moreover, the report states that while COVID has impacted the overall advertiser confidence with segments like print losing advertising by 1.5 percent, internet has emerged relatively unscathed, where an estimated growth is predicted with a CAGR of 21.7 percent between 2019 and 2024.

India is now the sixth-largest internet ad market in the Asia Pacific and mobile will continue to stay the primary driver of revenue because of the increased data affordability, new mobile-first formats and strategic targeting of consumers. Music and podcasts are envisioned as the other big gainers, where advertising for them is estimated to rise by 20 percent.

The television advertising model, in between is continuing to get impacted by the ongoing shift in the consumer habits though it is estimated to grow by 2.1 percent by 2024.

Gaming and esports that take over the live experience at home in personalized and engaging ways, are also set to benefit from the pandemic.

The gaming market in India is expected to reach $3.1 billion in 2024, growing at a CAGR of 18.8 percent with e-sports alone growing at 33 percent.

The growth is fuelled by the uptake of music streaming brands and people turning to motivational, spiritual, fun and fitness content during the lockdown, where India’s market has emerged as the third largest podcast listening market in the world after China and the United States, with 57.6 million monthly listeners. Moreover, the segment is expected to touch revenues of $1.7 billion in 2024, with a CAGR of 13.5 percent. India will be witnessing strong increase at 30.4 percent CAGR in its monthly podcast listener base over the next five years, which will be supported by the entry of foreign players and the original content on topics from news, society, and culture.

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