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ACKNOWLEDGEMENT

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 TABLE OF CONTENTS

1. List of Illustrations……………………………………………….3

2. Summary…………………………………………………………4

3. Introduction ……………………………………………………...5

4. Global Scenario………………………………………………….6

5. Indian Scenario…………………………………………………...7

6. Major Indian Players……………………………………………...9

7. Conclusion………………………………………………………...12

8. Appendices……………………………………………………….13

9. References………………………………………………………...14

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List of illustration
1. Exhibit 1 – APAC is a fast-Growing Market for OTT – Page no. 7

2. Exhibit 2 – Digital Video Consumption in India – Page no. 9

3. Exhibit 3 – Advertising growth in 2018 – Page no. 10

4. Exhibit 4 – Viewership in regional languages – Page no. 10

5. Exhibit 5 - Market share of OTT players by smartphone installs in India –

Page no. 11

6. Exhibit 6 – India’s online video market – Page no. 11

7. Exhibit 7 – India’s top online video service providers – Page no. 12

8. Exhibit 8 – Share of Indian smartphones with the OTT app – Page no. 12

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SUMMARY

The past decade has seen a tremendous transformation in how consumers all over the world
watch videos and listen to music. From the days of terrestrial broadcast, social viewing of
television to highly customized, small screen consumption - the media industry is witnessing a
transformation like no other industry. The rate of change in the industry only continues to
accelerate, with hyper-competitive dynamics coming into play in India. There are the
traditional players in Indian market but a strong push from global and quick in innovation
companies to get into the OTT space. At the same time, India’s appetite for entertainment
continues to increase as high-speed broadband connectivity, falling data rate, ease of payment
options and availability of multiple platforms creates the right environment for the consumers.
.
This report seeks to address the changing Indian consumer, learnings from other global
markets, niche areas such as internationalization, music and regional acting as the key strategic
imperatives.
There are various players in OTT market in India like Netflix, Amazon Prime, Hotstar,
YouTube etc. All are providing different preposition to its customer like Global players Netflix
are entering into Indian market with regional content as well to cater the needs of its consumers
and giving value preposition by cheaper rates for membership. By seeing this we can say that
India is going to have a big share in OTT market in near future.

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 INTRODUCTION
Digital technology has guided the third industrial revolution impacting the human
advancement. Industries such as media, telecom, retail and technology are witnessing
unparalleled disruptions and are rapidly changing their existing infrastructure to support the
demands of the new digital society. Thanks to the power of the Digital, the industry is being
globalized in true sense of the word. Half the world’s population is now online and nearly
two-thirds have a mobile phone or we can a smart mobile phone. Social media has penetrated
the everyday life of individual with nearly three billion people using one or some form of
social media. Toward this digitalization, a new channel OTT is launched.

OTT is a different channel through which video content (related display and video
advertisement) is delivered to end consumers. Video content can be viewed from computers,
mobile phones, OTT devices and more. OTT content comes from OTT content provider (like
sling TV) and can be viewed in multiple devices. OTT devices can be smart TV, Apple TV,
play station and other streaming devices.

Globally, Over the Top (OTT) has become the key Platform for video watching and media
consumption, with an increasing number of people consuming Over the Top (OTT) content
through varied platforms. The digital disruption has changed the way we consume content.
Newspaper, magazine, Radio, Television, Cinema halls, Games, Events and Music: all these
big industries are all going through a digital transformation.

A profusion of Services and Devices are Driving OTT Adoption, Globally

A key factor pushing this growth in consumption of OTT content is the fact that a
considerable part of OTT content is delivered over smart and mobile devices Key players are
giving a boast to this demand by investing in innovative technology and development of
original content exclusively for OTT consumption.

Furthermore, broadband connection has marked its presence globally. Due to this, the other
Internet-enabled devices including Smart TVs, STBs, and play stations can also be used for the
delivering the OTT services. The benefit of using OTT service is that it is cheaper in comparison to
other traditional channel and more efficient and customized in terms of consumption for end users.

The Global OTT Opportunity

The global OTT opportunity is huge. United States and Canada dominate the OTT market due to
better connectivity which allows for wider circulation of OTT apps in country.

Higher costs attached with traditional modes of media consumption (like Pay TV) which has made
OTT into a more cost-effective solution.

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Indian OTT opportunity

The Indian media industry seems to be an outlier relative to more developed markets in terms of ad
growth and penetration. India is now the second largest smartphone market in the world, increasing
affordability of broadband services and cheaper data rates will grow digital content consumption
significantly and this provides M&E companies, both foreign and domestic, an exciting opportunity to
develop businesses and serve the new generation of Indian

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 GLOBAL SCENARIO

OTT has seen a substantial growth in consumption OPPORTUNITIES

for videos and media content. From the last several
years, OTT has given a strong competition to
traditional media. Revenues of OTT has seen
40+% of CAGR for 2005-2007 and is expected to
witness growth of 20% for 2017-2023 (BGR,
2017). OTT services carries a major advantage of
being less costly compared to traditional media.
Moreover, it provides a convenient and customized
experience to users in contrast to the traditional
media. Internet has spread its roots to various
regions, accessibility of faster and cheaper internet
data made major consumption on contents over
mobile and smart devices. OTT service providers
made significant investment in technology and
content. OTT with above attributes is the new
muscle in media consumption market.
GROWTH
The OTT market is growing at a brisk pace globally.
The fasted growing market for the period of 2017-
2022 is expected to be Asia-Pacific (exhibit 1). Rise
in local content creators and providers together with
consumers getting used to OTT consumption has
primarily contributed to this growth.
There is a huge opportunity for global OTT growth
which is pegged at $72.8 billion for 2019-2023
(Munson, 2019). Such a large canvas allows both
SVOD (Subscription Video-On-Demand) and
AVOD (Ad supported-video-on-demand) models to
not only co-exist but also thrive. Nation with better
internet connectivity like U.S.A. and Canada have
better circulation of OTT contents and thus they
dominate the market. Traditional media are more
costly compared to OTT, which makes OTT a cost-
effective alternative. Other factors attributing to the
opportunities are increase in internet speed and
presence of content creators and providers for
different regions.
Exhibit:1| APAC is a fast-Growing Market for
OTT
EXHIBIT 1 | APAC is a fast-Growing Market for OTT
NORTH
AMERIC

$61
There is a significant gap in Indian market B
compared to developed markets for the OTT $41
B
consumption. This gap hands opportunity to grow
from current level. As per the estimates, India
reaching the levels of China and Brazil could give
growth of 5-7% for CAGR + GDP i.e., 10-13%
CAGR for the next 10 years for the overall media
industry.

The advertising is going digital as more and more

time on digital realm is spend by the consumers. The
media of choice for consumers is still traditional
media, digital media consumption share is steadily
Sources: Ampere analysis, Magna Global,
increasing. This will surely impact the growth of eMarketer, January 2018, BCG analysis.

digital marketing as well.

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 INDIAN SCENARIO
The Indian OTT platform is large, so far additive
not cannibalizing. Digital media consumption in
India is estimated to be 16% of total media
consumption. However, for the youth the figure
rises to 25% (exhibit-2) but relative to developed
countries India lags by big margin. The growth
suggests that India is catching-up fast.
A very sharp rise in OTT media consumption but
not substantial decline in traditional media suggests
that there is headroom for growth for media overall,
though digital media growing more sharply. In
contrast to developed countries where OTT has
taken good share from traditional media, India is
still struggling to close the gap.
The Indian OTT space is hyper competitive, with
players vying for consumers attention. Each player
is offering different value proposition to the
consumers and have different models and strategies
to capture the market. Large TV broadcasters have
their own OTT platforms, which enjoys a great
brand awareness driven by their strong TV brands.
Global OTTs like Netflix and Amazon Prime have
entered into Indian market. Each player has
invested significantly into local Indian contents.
Telecom aggregators also have leveraged their
brand image and model to enter in the market.
GROWTH AND OPPORTUNITIES
In recent years, the market saw a burst of
investment in developing Indian content. In last six
years the number players in Indian market has
grown more than three folds, an increase of 9 to 32.
In a race to grab eyeball, players have invested
heavily to develop original content which costs
more than traditional media. Other investments
include bagging live sports rights and creating
music library platforms.
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 India is at inflexion point for OTT growth.
There are several reasons for that:
 Falling data rates and improved
connectivity.
 Increase in smartphone penetration.
 Favourable demographics (age, affluence)
 Creation of local contents. (like for
different languages).
The JIO effect created an unprecedented growth.
Digital media consumption is now affordable, on-
the-go consumption of content is efficient.
Increased penetration of smartphones and smart tv
means consumers are no more at the mercy of DTH
or cable for content. Consumers now have different
choice of the mediums to watch the content they
want to watch.
Entry of global players like Netflix means move
over the catch-up content and welcome the original
content. A wide variety of content availability
attracted large number of consumers across the
country. Share of online video advertising is also
increasing with a growth in viewership.
India is seeing a shift in demographics with
increase in urbanization. Increased connectivity
and availability of smartphones has led to spurt in
online content consumption. More than urban areas
it is the rural areas which are more interesting for
OTT growth in India. Lack of electricity
availability, cable and satellite households, tv
screen and availability of multiple smartphones
could mean a great potential for growth of OTT
media. The estimates suggest that by 2020, 50% of
internet users will be from rural India.
Exhibit:2 | Digital Video Consumption in India

EXHIBIT 2 | Digital Video Consumption in India has Become Sizeable and Very Relevant

DIGITAL MEDIA CONSUMPTION BY COUNTRIES INDIAN YOUTH IS AT 25%

Share of digital in media consumption (2018E)

(Hours/week) 11% 15% 18 % 22% 25%

89%
85% 82%
78 %
75%

USA UK JPN RUS CHN BRA <23

Age group

Sources: PQ Media, BCG analysis, Digital advertising includes search, video, display, social media.

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 MAJOR PLAYERS IN THE INDIAN MARKET
Focus on regional languages is fuelling YouTube’s
growth in India as more vernacular content is being
put up on the platform. (Exhibit 2).

Exhibit:4| Viewership in regional languages.

Growth of YouTube in India has been exponential,

one of the major reasons being the availability of
internet at cheaper prices. India is YouTube’s
fastest growing market in terms of users with 265
million monthly active users. YouTube’s
consumption on mobile has increased to 85%.
Digital media is the most preferred medium of
advertising because of the vast reach that it
provides (Exhibit 1).

Exhibit:3| Advertising growth in 2018.

Music content has the most views in the Indian

market followed by entertainment and kids’
content. India has 1200+ youtubers with more than
a million followers. Features of this platform like:
YouTube Red, YouTube creators, YouTube live,
Virtual reality, YouTube spotlight has made it easy
and convenient for the viewers to access content.
T-Series, an Indian music label, went from having
33 million subscribers in January 2018 to 109
million subscribers in August 2019 indicating the
rapid growth and the future growth opportunities
for YouTube in India.
Telugu had the highest viewership and uploads
between the years 2016 and 2019. Telugu
subscribers rose from 16 million in 2016 to 166
million in 2018.
YouTube expects the monthly active users from
India to increase to 500 million in 2021 and sees
India as the largest and the fastest growing market.

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Netflix launched in India in 2016. Netflix targeted
the English-speaking users in India since it majorly
comprised of English shows. Netflix was launched
in India with the aim of providing international
content to Indian audience. Netflix altered this
strategy after closely monitoring the increase in
subscribers of its competitors by local productions
and started including more selective regional
content.
Netflix India has now introduced a mobile plan for
the Indian market which would enable the users to
access advertisement free viewing in Standard
definition in one mobile or tablet at a time for
which they will charge Rs. 199. Netflix plans to
increase its user base of 11 million users in India.
India’s online video market is expected to reach 5
billion USD by 2023 and Netflix are trying to tap
into this new user base.
Exhibit:6| India’s online video market.

The total viewership boomed when shows like

Stranger things, Crown, Narcos were released. Due
to affordable internet and the surge in mobile phone
users in India, Netflix viewership via mobile
phones saw a tremendous increase in mobile phone
consumption between 2017 and 2018. Desktop
viewers has grown but at a slower rate than mobile
phones.

Despite providing quality content, because of

higher tariffs, Netflix has a lower market share
compared to its rivals (Exhibit 3).

Exhibit:5| Market share of OTT players by

smartphone installs in India.

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 Hotstar also has the highest number of app
downloads on smartphones in the Indian consumer
base (Exhibit 6).

Exhibit:8| Share of Indian smartphones with the

OTT app.

Hotstar was launched in 2015 and it targeted local

productions. Even though the Indian video market
is a crowded market space with multiple close
competitors, hotstar has managed to be the best
performing OTT video streaming platform in India.
It has a large movie collection and hosts several
popular shows.

Hotstar also streamed sports evens live. Streaming

the ICC Cricket World Cup 2015 kickstarted their
platform and gave them a tremendous boost. It also
live streamed the famous Pro-Kabaddi league and
selective badminton matches. It also cashed in on
the IPL hype by live streaming IPL matches. The
2019 final between Chennai super kings and
Mumbai Indians is the most watched match on
Hotstar with 18.6 million concurrent viewers.
Hotstar managed to pull a larger user base
compared to its competitors in the segments that
they targeted (Exhibit 5). Hotstar has also entered into a strategic partnership
with Bharti Airtel to bring Hotstar’s portfolio to
Exhibit:7| India’s top online video service
Airtel’s costumers.
providers.
With Amazon Prime upping its value proposition
to the customers and Netflix India fighting for
market leadership, Hotstar’s proactiveness will be
crucial in them retaining their market share and
growing further.

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 Conclusion
The media and entertainment industry went
through a brisk change over the last two years due
to a technological push. Faster and cheaper internet
services along with increased mobile penetration
over the globe were the major influencers. United
States and Canada are dominating the overall OTT
market as they have a superior connectivity and
strong content creators. The world OTT
opportunity is estimated to be at whooping 76
billion US$. Global revenues from OTT content are
expected to grow at a rate of 20% CAGR in the
period 2017-2023. It is growing at a fast pace in
Asia-Pacific, the Middle East and Africa, Europe
and Latin America.
In Indian market, the traditional media continues to
be vital media for consumers with an overall share
of 84%. The digital media is growing very fast yet
remains to be additive in nature rather than
ingesting the television media unlike other
developed countries. The OTT subscription
bundles cost at around 1.5 times the Cable or DTH
connections. Regional language content has very
less presence on digital platform with only Viu and
Hoichoi (Bengali) offering original content.
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The major chunk of revenue for OTT players in
India is coming from advertising. Subscription
collections are growing at a steady rate. Whereas
the neighbouring country China has shown an
exactly opposite pattern.
India can be said to be at a crucial stage of
modulation in OTT growth. With propelled
urbanisation we are witnessing a shift of
demographics as more and more people become
upwardly mobile. There is emancipation of internet
access taking place which will not only penetrate
metro and the millennials but also the rural India.
We believe Indian OTT platform is assured for
growth and both ad-supported and subscription
collection should co-exist as in present. The future
of the OTT will depend on various strands like
content quality, cost of production and revenue
models. The market potential is estimated to touch
5 bn$ by the end of 2023.
The Indian consumer going for online
entertainment will prioritize time over money. A
cut-throat competition to survive in top three
aggregators is expected to intensify as a consumer
will keep a minimal number of applications on her
home-screen.
 APPENDICES

A – Amazon Prime, 12

AVOD (Ad supported-video-on-demand),7

B – Broadband Connections, 5

C – Cable services,13

D – Digital Transformation, 5

I – Indian Market, 8

IPL,12

J – JIO effect, 8

N – Netflix strategy for India, 11

O – OTT, 5

P – Pro- kabaddi league, 12

R – Regional Languages, 10

S – SVOD (subscription video-on-demand), 7

Y – YouTube, 10

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 REFERENCES

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28, 2019 from:

https://www.fiercevideo.com/video/global-ott-video-market-to-be-worth-72-8b-by-2023-report-says

2: Ians. (2019, April 9). YouTube hits 265 million monthly active users in India. Retrieved from
https://www.livemint.com/industry/media/youtube-hits-265-million-monthly-active-users-in-india-1554815017118.html

3: Khan, D. (2019, July 24). Netflix launches Rs 199 mobile plan to aggressively expand user base in India.
Retrieved from
https://m.economictimes.com/industry/media/entertainment/netflix-unveils-mobile-plan-in-india-at-rs-199-per-
month/articleshow/70358922.cms

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india/articleshow/70412710.cms

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6: (2019, July 19). Hotstar, MX Player lead in OTT entertainment apps for smartphones users in India:
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