Flat subscriptions, fierce ad market: streamers have task cut out for them, says Ormax's Kapoor

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Indians are bingeing on shows like Criminal Justice and Aashram—the most-watched OTT (over the top) originals in the first half of 2025—but the big question remains: are viewers willing to pay to watch their favourites? Shailesh Kapoor, founder and CEO of media consultancy Ormax Media, says streaming subscriptions are stuck in pause mode.

In the last two years, the number of people who subscribe to these services has plateaued, so there is a very high chance that it will continue to be at the same level even for the next one or two years, he said.

"A lot of Indians take monthly subscriptions and not annual subscriptions. There's a lot of churn, up to 30-40 percent every month, of subscribers who move out and don't renew their subscriptions. Initially, subscriptions were coming from the metro cities and the mini metros. But now, as these markets have saturated, streaming platforms have to look at small towns where people are not used to paying for content."

The total number of direct paid subscriptions stood at 9.96 crore last year, according to the firm's analysis. The subscription video on-demand (SVOD) audience share declined to 28 percent in 2024 from 32 percent in the previous year.

The Ormax analysis also noted that an average SVOD audience in India watched around 12 originals across the year in 2023 (at least one episode for series; at least 30 minutes for films). In the first half of 2024, there was a 17 percent drop  in the number of originals being watched by a typical SVOD audience member in India versus 2023.

"There's unlikely to be any significant growth (this year). There are around 9 crore direct paid subscriptions across all platforms put together. This doesn't include some of the bundle deals where users get subscriptions at fairly low cost. Our internet or smartphone penetration is around 70 crore. So you're talking of like less than 10 percent of digital India taking direct paid subscriptions," Kapoor said.

According to the Ormax CEO, the only real way growth can happen is via advertising.

India’s OTT audience grew 13.8 percent from 48.1 crore in 2023 to 54.7 crore in 2024. But the entire growth came from the AVOD (advertising video on-demand) segment or those viewers who only watch videos that are free to stream and are ad-supported. The share of the AVOD audience in India’s digital universe increased to 72 percent in 2024 from 68 percent a year earlier.

Amazon Prime Video this year started its ad-supported content service while Netflix has launched AVOD globally and is expected to launch it in India as well.

To cater to the advertisers, Kapoor said that platforms are also tweaking their content strategy.

"One major theme is that platforms want to make shows which have more episodes. Instead of eight episodes they want to do a show with 30-40 episodes because that gives more inventory for advertising," he pointed out.

The other focus area is micro dramas, which are series with episodes running for one or two minutes. "The Indian streaming platforms are also looking at micro dramas and taking them seriously. It's again an advertising initiative and is not something that you would expect somebody to pay for. It's kind of low-cost and you don't really spend the kind of money you spend on a proper web series, where the budget would be like up to Rs 5 crore-10 crore per episode. For micro dramas, in Rs 5 crore, one can probably make 100 episodes of two minutes or like three shows of 100 episodes," Kapoor said.

Aligned with micro dramas, where the consumption is mainly on mobile phones, vertical versus horizontal content is also a debate, he said, adding that the future is going to be more and more vertical content versus the traditional content that audiences have been used to for years. Vertical versus horizontal is how the industry classifies screens, mobiles versus television sets.

"While there is an increase in connected TV penetration and there is a lot of premium audiences watching content on TV, 70-75 percent of content consumption on even the OTT apps happen on mobile phones, which is why a couple of years ago Netflix introduced its Rs 199 plan. That's when they really took off in India. Until then, they were very niche and premium. Mobile phones are where the consumption is primarily going to happen, no matter how much connected TV grows. It is never going to be more than 20-30 percent of total consumption."

Little wonder, then, that a lot of streamers are eyeing the vertical format.

"IPL (Indian Premier League) also launched a feature called max view which allows viewers to watch matches in a vertical format. The whole thinking is moving towards consumption on mobile. You may see not just micro dramas but other types of content including web series which are made with the vertical format in mind," Kapoor said.

But getting advertiser money will also be a tough task, he said. This is primarily because the bulk of the digital ad spends—roughly 70 percent—goes to Google parent Alphabet and Facebook owner Meta with advertisers spending on search and social. Out of the remaining 30 percent, much of the ad spends goes to sporting events. The platforms streaming entertainment or other non-sports events are then left scrambling for not more than 10 percent of the digital ad spend, Kapoor explained.

The silver lining for the platforms is that advertising on TV is decelerating by 5-10 percent and digital advertising is growing by around 10-12 percent.

"Over time, more money will come from TV into digital and everybody wants to look at that as an opportunity because subscriptions are not something that are going to sustain or grow beyond a point," Kapoor said.

When it comes to what clicks with viewers, Kapoor said that Indian viewers want more than crime thrillers.

"Within Hindi content, there is now an increasingly growing sense which comes from our data also that you have to go beyond the action, crime, thriller genre. Over the last five-six years, almost 50-60 percent of web series that have come are essentially in the crime, thriller, action genre. This whole broad genre is oversaturated," he said.

Now the focus is more on family and gender-inclusive, slightly broad-based shows like Panchayat.

The other trend picking up is foreign language content, especially South Korean and  anime.

"Shows like My Girlfriend is an Alien have done quite well in India. There are these properties from Korea, China, anime from Japan, which have a sizeable audience but they never really get spoken about that much because those audiences were either younger or from small towns and were not the conventional urban audience," he said.