At a time when people are stuck at home due to the COVID-19 pandemic and looking for entertainment options, the overall online video market for India is projected to grow at a compound annual growth rate (CAGR) of 26 percent between 2020 and 2025 to reach $4.5 billion in revenue over the next five years, says Media Partners Asia (MPA) in its new report titled India Online Video & Broadband Distribution 2021.
According to the MPA's report, India's online video industry generated an estimated $1.4 billion in revenue in 2020, while advertising and subscription contributed 64 percent and 36 percent, respectively.
COVID-19 impact | Paid OTT subscriptions rise nearly 60% to 100-125 million in 2020: Report
Among the top five services which accounted for a combined 85 percent share of total revenues in 2020 include YouTube (43%), Disney+ Hotstar (16%), Netflix (14%), Amazon Prime Video (7%) and Facebook (5%), LiveMint quoted MPA executive director Vivek Couto as saying.
Couto added that the average number of subscription video-on-demand (SVOD) services subscribed by customers reach 2.8 in India and Southeast Asia.
In its report, MPA projected the SVoD market to grow by 30 percent CAGR from 2020 and reach $1.9 billion by 2025. However, online video advertising saw a marginal decline of 2 percent year-on-year and reached an estimated $909 million in 2020 due to decreased demand. Despite this, the advertising video-on-demand (AVoD) segment is expected to surge over the next five years at a CAGR of 24 percent to reach $2.6 billion by 2025.
"Subscription-based online video services benefited significantly in 2020 as the country went into the lockdown. Key players are investing in premium local content while leveraging sports, movie rights, and aggressive consumer pricing to drive subscriber adoption. The SVoD market will remain competitive as Disney+ Hotstar scales its direct subscription business while Netflix and Amazon Prime Video deepen partnerships with mobile and fixed broadband operators," the business daily quoted MPA India vice-president Mihir Shah's statement.
MPA predicts Disney+ Hotstar may secure over 80 million subscribers in India if they continue to invest in local originals and retain key sports rights. In 2020, the online channel invested in acquiring big-ticket Bollywood films, following which its subscribers rose to 26.8 million as of December 2020, and India making up 30 percent of its global subscription base.
Adding more, Shah said that YouTube remains the market leader in AVoD and accounted for 67 percent of total online video advertising in 2020. However, MPA India VP looked sceptical and said that YouTube's market share may decline to 55 percent in 2025 with domestic broadcaster-backed platforms and short-form user generated content video players expanding their base.
"Local premium content and sports rights will help broadcaster-backed platforms gain share. Increased reach and engagement with rural millennials will improve monetisation for short-form video platforms," Shah said.
Among other things, MPA report said that OTT content investment in India touched $700 million in 2020 as domestic and global platforms continue to invest in India's burgeoning SVoD opportunity. Estimate claims OTT content cost may grow at a CAGR of 18 percent to reach $1.6 billion between 2020-2025.
"While the direct-to-digital premiere of films is unlikely to sustain, reopening of cinemas will not necessarily impact consumption on OTTs. Streaming services are not just pushing for more originals, the whole experience is also getting modelled for urban-ready homes with technologies like Airtel XStream and Jio Giga Fiber," Shah said.
The latest MPA report claims India's mobile broadband penetration is forecast to grow steadily to 66 percent by 2025 as commercial roll-out of 5G expected to begin in 2021. The new investment by private telcos has boosted India's fixed broadband market which till now has remained under-penetrated at merely 6 percent of households.
The report further claims of India's fixed broadband market to grow at a CAGR of 18 percent to reach 45 million subscribers with over 82 percent of subscribers through fiber by 2025.
Infrastructure growth has helped Indian customers look for expanded broadband capacity which includes video conferencing, work from home, digital classes, and video streaming.
The MPA provides independent research, advisory and consulting services across media, telecoms, sports, and entertainment industries in Asia Pacific and the Middle East.