Online video consumption in India is at an interesting and surprising stage.
If we look at last year, subscription-based video on-demand (SVoD) content not only grew stronger than advertising-based video on-demand content but the growth was driven by smaller towns with less than five lakh population, according to a study by Kantar, a data, insights and consulting company.
And if we look at platforms, then MX Player is a prominent platform amid video users in smaller markets.
"When it comes to Netflix and Amazon Prime Video, they are still a larger city phenomenon. But Disney+Hotstar is very well distributed because of the fact that it is a go-to platform for sports," said Biswapriya Bhattacharjee, Executive Vice President, Insights Division, Kantar, in a chat with Moneycontrol.
According to the report, SVoD users witnessed a significant demographic change over the last one year as 37 percent of such users came from small towns last year as compared to 10 percent in 2018.
Plus, SVoD content witnessed a significant surge over the last one year with users growing to the tune of 82 percent over the last one year. AVOD saw a 29 percent growth in users.
Growth in SVoD content is a strong signal for the OTT market in India as experts say that the way forward for video streaming players is the subscription model.
And it is expected that by end of 2020, India will have third most SVoD subscribers in the world, after China and the US.
Along with users, video subscription revenues also grew last year at 111 percent thanks to premium content, originals and sports that went behind the paywall, said an EY 2020 report.
The report also added that the total amount of fresh original content created for OTT platforms in 2019 is estimated to be 1,600 hours.
Also, last year over 10 million subscribers paid for 21 million OTT video subscriptions.
However, the percentage of paying subscribers to total OTT consumers remained less than five percent for video.
Yet, experts believe that the Indian OTT market will record double-digit growth from subscription revenue in the next five years with new players continuing to enter the India OTT market.
Bhattacharjee believes that this year particularly there will be strong growth for SVoD. After all, OTT video consumption has gone up in times of COVID-19 due to people being stuck at home, shutting down of theatres and lack of outdoor activity.
“SVoD is seeing a substantial shift globally, which is being mirrored in India, aided by theatrical shutdowns globally. Recently, AMC agreed to reduce the theatre release exclusivity window in the US, essentially allowing producers to ship content to OTT platforms a lot sooner than was previously possible. This shift in the balance of power will help fresher content availability on OTT / SVOD, which will bolster subscriptions, said Utkarsh Sinha, MD, Bexley Advisors, a boutique, early-stage investment bank.