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OTT platforms and India’s Economy: Potential in 2024 and beyond

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Table of Contents

How big is the OTT Market in India in 2023?

How are OTT platforms competing with Multiplexes?

What is the Potential of the Over-The-Top Sector in India: 2024 and Beyond?

What are the Challenges for the Indian OTT Sector: Now and Beyond?

Conclusion

OTT meaning Over-The-Top platforms are a new ally of the Indian Economy. Indians are increasingly embracing OTT platforms due to their convenience, variety, and accessibility. With an average viewer spending approximately 70 minutes per day on these platforms, OTT offers a diverse range of content that caters to different tastes and preferences. The ability to stream ad-free content at a reasonable cost, coupled with the option to download videos for offline viewing, resonates with the evolving content consumption behaviors of Indians.

The flexibility and convenience afforded by OTT platforms have made them an integral part of modern entertainment in India. Presently, India’s Over-The-Top (OTT) market is undergoing a remarkable transformation, reshaping the entertainment landscape. Know about the current state of India’s OTT market, the potential of OTT platforms in 2024 and beyond, existing challenges, and the dynamic future trends shaping the industry.

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How big is the OTT Market in India in 2023?

As of 2023, India’s OTT market is valued at $1.8 billion, dominated by key players like Amazon Prime Video, Netflix, and Disney+ Hotstar. The PwC report emphasizes that the Indian market is growing significantly faster than the global average, providing a lucrative landscape for both domestic and international players. The introduction of ‘pay-lite’ options and new launches from global entities has contributed to this explosive growth. The market has witnessed a 25.1% increase from $1.4 billion in 2021, with a robust CAGR of 14.32% anticipated till 2027.

In 2023, the Over-The-Top (OTT) market in India stands as a burgeoning powerhouse within the global entertainment landscape, marked by exponential growth and a shifting consumer paradigm. According to a comprehensive study by PwC, the Indian OTT media market is currently valued at an impressive $1.8 billion, showcasing a robust expansion from $1.4 billion in the preceding year. This surge represents a staggering 25.1% increase in revenue in just one year, underscoring the insatiable appetite for digital content among Indian consumers.

In India’s digital evolution, the OTT market in 2023 is not merely an economic figure; it symbolizes a cultural shift, a digital revolution that is reshaping how Indians consume and engage with content in the digital age.

Read on: National Economy of India: How India’s Luxury Market Can Contribute?

What is the Potential of the Over-The-Top Sector in India: 2024 and Beyond?

As the Indian OTT over the top market continues to outpace global growth rates, it stands as a beacon of opportunity for content creators, distributors, and investors alike. The landscape is ripe with potential, driven by factors such as regional content prominence, increasing internet penetration, and the promise of enhanced 5G and broadband infrastructure.

According to a recent PwC study, the revenue of Indian OTT platforms is set to double, reaching $3.5 billion by 2027. This surge is fueled by a staggering Compound Annual Growth Rate (CAGR) of 14.32% from 2023 to 2027, outpacing the global OTT segment growth rate of 8.4%.

The PwC report identifies OTTs as a growth hotspot in India’s media and entertainment space, attributing this to the vast size and diversity of the population. Regional content is expected to be a significant driver, and improvements in 5G and broadband infrastructure could unlock even greater market potential.

Projections indicate that the revenue will continue its impressive growth. The report underscores the potential of ad-supported streaming becoming the new normal, with ad-supported video on demand (AVOD) forecasted to account for 22.3% of OTT revenue by 2027.

How are OTT platforms competing with Multiplexes?

OTT platforms are transforming the way audiences consume content, presenting a formidable competition to multiplexes on several fronts.

One key advantage is the extensive variety of content offered by OTT platforms, catering to diverse preferences and allowing viewers to access an extensive library of movies and shows at their convenience.

The convenience factor is a major draw, as OTT platforms enable users to watch content anytime, anywhere, without the need to visit a physical location. This is particularly appealing during the pandemic when individuals seek to avoid crowded spaces.

Further, the cost-effectiveness of OTT subscriptions compared to multiplex tickets contributes to their popularity, especially among cost-conscious consumers.

To counter the growing threat, multiplexes are adapting by introducing subscription-based services, luxurious amenities like reclining seats, and partnerships with OTT platforms to showcase their content. However, the battle between OTT platforms and multiplexes remains dynamic, with each side striving to innovate and cater to changing consumer preferences. The immediate relief provided by subscription-based models and enhanced experiences may offer a lifeline to multiplexes, but their ability to navigate the evolving landscape will determine their long-term viability in the face of the OTT revolution.

Read on: How Much Can the Indian Film Industry Contribute to the Indian Economy: 2023 and Beyond?

What are the Challenges for the Indian OTT Sector: Now and Beyond?

Despite the promising growth, the Indian Over-The-Top (OTT) sector grapples with multifaceted challenges, both current and anticipated for the future.

 The foremost hurdle is the pricing paradigm, where the affordability of traditional cable or Direct-to-Home (DTH) subscriptions clashes with the higher costs associated with premium OTT play packages. With a top-end telecom-bundled pack of 10-12 OTT apps priced at Rs 1,000-1,200 per month, and individual subscriptions to leading platforms exceeding Rs 3,000 annually, the sector faces the uphill task of aligning with the price sensitivity ingrained in the Indian consumer mindset.

Piracy emerges as another significant impediment, draining up to 30% of annual revenue for OTT platforms in India. As the industry invests heavily in original content, combating unauthorized distribution becomes imperative for sustained profitability. Moreover, the potential introduction of advertisements by premium services adds complexity, forcing platforms to delicately balance revenue generation with user experience.

Looking forward, addressing these challenges is pivotal for the Indian OTT sector’s sustained growth and market expansion. It will determine the industry’s ability to shape a resilient and dynamic future.

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Conclusion

As India’s OTT market continues its upward trajectory, it is crucial for platforms to navigate challenges effectively. The focus on regional content, improvements in infrastructure, and addressing pricing concerns will be pivotal for sustained growth. The shift towards ad-supported streaming models and collaborations with regional players can further boost revenue streams. With the market set to reach new heights, the Indian OTT sector’s evolution in 2024 and beyond promises to be both dynamic and transformative for India’s economy.


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