With the increasing demand for variety, original content is expected to be the key growth driver for the 30-player over-the-top (OTT) industry in the coming years, who have earmarked around Rs 3,300 crore for the same, says a report. OTT players are heavily investing in creating and distributing original programming in Hindi and regional languages. Currently, Rs 2,500-3,300 crore have been set aside for OTT services in the country especially for original content production, says a technology, media and telecommunications report by Deloitte.
The report sees regional content increasing on the digital platform, while production houses may use the OTT route to release content such as movies before their television premieres. “Advertising revenue share from the digital platforms will increase due to the fast pace of growth,” it said. The report estimates that digital advertisement market more than doubling to Rs 35,400 crore by 2020 from Rs 13,300 crore in 2017.
OTT video viewers are expected to grow to 355 million by 2020, but considering the rate at which broadband connectivity is growing now, the number may grow at a faster pace, the report said without mentioning the present viewership numbers. Additionally, it said the industry would focus on expanding regional content library to increase the market share. It is expected that the vernacular users will be more than 2.5 times of the English Internet user base by 2021. “This increase can be credited to the improvement in mobile devices technology and internet connectivity, which has provided the viewers with the option of accessing digital media content on the go,” the report said. Currently, as much as 40 per cent of OTT viewership are in regional content.
Currently rural India is lagging behind its urban counterpart, with only 17 per cent Internet penetration, owing to challenges in deployment of fixed broadband networks. In future, demand for fixed broadband would be limited to consumers with higher bandwidth/quality of service requirements. Wireless networks will drive Internet adoption for nearly 750 million users in India who still do not use Internet.
Trends in online content consumption
Over the past year, the internet has been and continues to be the biggest disruptive force, influencing the distribution and consumption of content across various media channels. With improved networks, better access to the internet, and ever-increasing smartphone ownership, digital media consumption in India, and across the globe, has risen exponentially. Since mobile phones are now personal entertainment devices for a large number of consumers, it only makes sense for content providers to partner with telecom operators to strengthen the delivery capabilities of their streaming services. Hence, in order to tap into the upsurge in mobile-based OTT video consumption, telecom operators and OTT video streaming platforms have entered into strategic partnerships, offering bundled services and discounted subscriptions to users.
As more content is created in languages like Punjabi, Bengali, Tamil, Telugu, Malayalam, Gujarati, and Marathi, the number of unique visitors on leading OTT platforms has been growing steadily. As a result, the regional language OTT market continues to grow at about 60-65 percent every month, while regional content comprises nearly 45 percent of India’s overall online video content consumption. Original web series and short films in these languages are among the most popular categories of content among regional audiences. The preference for short, snackable content is also becoming more common, not only among urban viewers of Hindi and English-language content, but also regional audiences consuming entertainment in vernacular languages.
Although the traction for OTT video streaming and downloading is only just building, a thriving ecosystem of content suppliers is being created as a result of multiple new players launching their digital streaming platforms. Furthermore, the entry of OTT players, both domestic and international, has expanded the choices available to consumers for consuming content and brought a significant shift in the user’s attitude, leading to an increasing demand for easy access to a vast library at any time and place. Thus, to provide a seamless and secure delivery of online videos, streaming platforms are strengthening their content delivery networks (CDNs) to entirely bypass the need for continuous internet connectivity by enabling offline streaming.
New OTT players are investing in creating original content
If you haven’t purchased a power bank yet, it is time to get one now. With the streaming in of video-on-demand (VoD) over the Internet, you cannot afford to let your handheld device run out of battery. As if Bolly-wood and Hollywood video content was not enough, players such as Amazon Prime Video, Hotstar, Netflix, ALTBalaji, Voot and SonyLiv are heavily investing in creating and distributing original programming in Hindi and regional languages.
There is a significant shift in the number of vernacular Internet users in India, thus forcing the OTT or over-the-top content platforms to bet big on original regional content. OTT refers to transmission of audio-video content via Internet as a standalone product.
But why this shift? It is because the Indian language Internet users will drive the next phase of Internet adoption in India. The vernacular users will be more than 2.5 times of English Internet user base by 2021, says a recent report by consultancy firm KPMG and Google. The numbers projected are quite staggering. As of 2016, the Indian language users stood at 234 million compared to 175 million English language Internet users in India. This will further swell to 536 million by 2021 compared to around 200 million English Internet users, the report says. Also, by 2021, Hindi is expected to have 38 per cent of the Internet user base at 201 million, the rest will be made up of Marathi (9 per cent), Bengali (8 per cent), Tamil (6 per cent), Telugu (6 per cent), Gujarati (5 per cent), Kannada (5 per cent) Malayalam (3 per cent) and several other languages.
Growth of OTT market in 2017
One of the key growth drivers of the country’s digital space, the OTT video market was estimated to be worth nearly USD 210 million in 2016, driven predominantly by advertising. The OTT video industry in India in 2017 achieved phenomenal growth of 160 percent, as the top 16 OTT platforms saw their user bases grow from 63 million to 164 million between August 2016 and August 2017. Advertising spends for OTT video content are also expected to rise from $10 billion in 2015 to $40 billion by 2020.
In addition to tapping new consumer segments, these platforms have captured a much-larger share of advertising revenues from traditional television broadcasters with precision segmentation, immersive experiences, interactivity, data, and analytics. The enhanced native engagement offered by leading OTT platforms is also making in-app advertising a very lucrative area of opportunity for digital marketers.
Market trends in 2018
One of the trends from 2017, that will continue in 2018 as well, is the collaboration between telecom operators and OTT platforms to offer streaming services to consumers. This approach of delivering greater value to end-users has been amongst the most effective customer acquisition strategies adopted by telecom players and OTT platforms of late, and has generated significant results. Partnerships with smartphone brands to feature embedded OTT apps on phones are also pushing players to enhance their content offering for a rapidly-growing user base.