Over-the-top (OTT) content market in India is at an inflection 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 $5 billion in size by 2023. This
growth is being driven by rising affluence, increase in 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 largely 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 wide variety of content being developed for OTT market including diversity in
genres and language gives OTT market a favorable edge over it 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 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 content and cricket have large
following in the Indian diaspora also. OTT Players with Indian content have
potential to tap into this market too. “While the NRI content market is huge and
demonstrates 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”, said 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.Over-the-top (OTT) content
market in India is at an inflection 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 $5 billion in size by 2023. This growth is being driven by
rising affluence, increase in penetration of data into rural markets and adoption across demographic
segments including women and older generations.

Indian OTT market to reach $5 billion in size by 2023: Report

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 largely 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 wide variety of
content being developed for OTT market including diversity in genres and language gives OTT market a
favorable edge over it 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.

Indian OTT market to reach $5 billion in size by 2023: Report

48% of India’s internet users (~650 million by 2023) are expected to be from rural areas. 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.

Indian OTT market to reach $5 billion in size by 2023: Report

Indian content including music, Bollywood content and cricket have large following in the Indian
diaspora also. OTT Players with Indian content have potential to tap into this market too. “While the NRI
content market is huge and demonstrates 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”, said 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.