During the early days of satellite television in India, broadcasters had to partner with local cable operators and pay them a hefty carriage fee in order to reach millions of TV households. In recent years, the action has shifted to video streaming platforms or over-the-top (OTT) content services. While the core game remains the same – since distribution remains critical for all content creators – the players have changed.
OTT services started gaining popularity in India in 2018 and have been witnessing a growth in adoption ever since. The Covid-19-related lockdowns further accelerated the growth of OTT players in India, as consumers turned to streaming services for entertainment. OTT video streaming platforms such as Netflix, Amazon Prime Video, Disney+ Hotstar, Voot, SonyLIV and others gained immense popularity post the pandemic, with these players exploring new growth avenues to drive revenues.
Market insights
India’s OTT market continues to be one of the fastest growing markets in the world. The closure of cinemas and theatre halls for over a year because of the pandemic has further propelled the adoption of video OTT platforms in India.
Original premium content, especially in regional languages, is one of the biggest growth drivers and differentiators for OTT platforms, as several of them are now vying for consumers’ attention. Growth in the market can be attributed to rapid advancements in online platforms and the increasing need for quality experiences across multiple devices. According to a report by RBSA Advisors, India’s video OTT market is expected to touch $12.5 billion by 2030 from about $1.5 billion in 2021, on the back of access to better networks, digital connectivity and smartphones. The report further noted that the next wave of growth in the OTT landscape will come from Tier II, III and IV cities and local language speaking populations. Today, OTT has a 7-9 per cent market share in India’s $27 billion media and entertainment industry. However, by 2030, its market share is expected to increase to 22-25 per cent.
Evolving regulatory scenario
Given the growing OTT viewership and usage, the government has been looking to set norms and regulations for OTT platforms. To this end, in February 2021, the Ministry of Electronics and Information Technology notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to govern the digital media industry, comprising social media digital news and OTT platforms. The rules have been framed under the Information Technology Act, 2000, and will supersede the 2011 guidelines for internet intermediaries.
The rules lay down an ethics code for OTT and online news platforms, which will be administered by the Ministry of Information and Broadcasting. OTT players will now be subjected to a three-tier grievance redressal process. This will include a government oversight mechanism. As per the guidelines, OTT platforms will be required to self-classify their content into five age-based categories – U (Universal), A (Adult), U/A 7+, U/A 13+ and U/A 16+. Moreover, for content classified as U/A 13+ and above, there should be a parental lock mechanism.
Following the enactment of the new rules, in May 2021, the Ministry of Information and Broadcasting wrote to the OTT and digital media platforms, asking them to furnish all their details and compliance status vis-à-vis the new IT Rules within 15 days. Prior to this, there had been discussions regarding the censorship of OTT content. At present, there is no autonomous body governing digital content or any programming code for OTT platforms in India.
Telcos jump on the bandwagon
The OTT industry is growing at a rapid rate and various telecom operators have also been making positive strides in launching new initiatives or forging key partnerships in this space. Telcos with OTT partnerships offer one-stop-shop convenience for customers who value having multiple services bundled into a single bill. The association with telcos is a win-win for OTT platforms and telcos alike. It helps OTT players gain market share by increasing their advertising video-on-demand and subscription video-on-demand numbers, while telcos gain revenue per user by consuming more data.
To this end, Bharti Airtel has launched its new video streaming service – Airtel Xstream Premium. The subscription will allow users to access 15 Indian and international OTT platforms. The amalgamation of these OTT platforms will bring more than 10,000 TV shows and movies under one roof. Post the launch, ShemarooMe, Shemaroo’s OTT video streaming app, announced a partnership with Airtel Xstream Premium. Moreover, Airtel has partnered with Amazon to offer one year of Amazon Prime membership to all Airtel Infinity post-paid customers, providing more than 300 live TV channels and 6,000 movies and shows.
Meanwhile, Airtel has bundled a Netflix subscription with its three-month post-paid plans for a limited period. Moreover, it has signed a partnership deal with Hotstar to make Hotstar’s content available on Airtel TV, including over 100,000 hours of content across live sports, movies and TV in nine languages, for free. Airtel Xstream Premium has also announced a partnership with the STX Global Corporation-owned entertainment platform, Eros Now. With this, Airtel users will get access to Eros Now’s rich content library, which includes 12,000 movies, originals and short-form content across multiple languages and genres.
Back in 2018, Reliance Industries Limited (RIL) had acquired a 25 per cent stake in Balaji Telefilms and then partnered with ALTBalaji (a subscription-led OTT platform) under a content sharing deal. ALTBalaji was required to make its original shows available on Jio Cinema and Jio TV, enabling Jio’s entire audience (160 million then, now 280 million) to enjoy their content. Following the Balaji deal, RIL turned its attention to Eros Now, another home-grown OTT service run by Eros International (a traditional movie producer and distributor). RIL acquired a 5 per cent stake in Eros to build and grow businesses around the content ecosystem. Following the deal, Eros Now’s multi-language entertainment library was made available on Jio TV and Jio Cinema.
Recently, RIL virtually hosted its 43rd Annual General Meeting wherein the new JioTV+ announcement was made. JioTV+ is a Jio set-top box content aggregator app enabled through JioFiber, which brings together TV shows, movies, videos and live TV channels from popular applications. JioTV+ is going to feature aggregated content from a variety of OTT players. These include Netflix, Amazon Prime, Disney+ Hotstar, Voot, SonyLiv, Zee5, JioCinema, JioSaavn, YouTube and more. Moreover, Jio is offering Netflix (mobile plan) subscriptions to its JioPostPaid Plus customers on select JioPostPaid plans at no extra cost.
Vodafone Idea Limited (Vi) has also started offering two-month subscriptions to Netflix and Amazon Prime for free to its RED post-paid customers. It offers a range of content through a single access point, Vodafone Play, to reduce not only entry barriers but increase convenience for end-users. Vi, in 2019, announced a strategic partnered with Sun NXT. This partnership offered Vi’s customers access to Sun NXT’s exclusive digital content which caters to Tamil, Telugu, Kannada and Malayalam audiences. Moreover, Vi collaborated with Hungama to launch a pay-per-view model for premiering digital films from Hollywood at a one-time cost. Vi is also in partnership with ShemarooMe for OTT content.
State-owned Bharat Sanchar Nigam Limited (BSNL), too, has announced a one-year free Amazon Prime subscription for its broadband and post-paid customers. Moreover, Eros Now had announced a partnered with BSNL back in 2019, which has now been extended, owing to the thriving OTT market in India. Quite recently, global OTT services aggregator YuppTV unveiled its partnership with BSNL to launch a new-age, tech-enabled single-subscription video streaming platform, YuppTV Scope. ShemarooMe has yet again announced a strategic partnership with BSNL to further deepen its footprint in the Indian market.
The way forward
The OTT landscape is expected to become hypercompetitive in the next four to five years, as each OTT service provider strives to emerge as the preferred platform among consumers. Consumers are progressively using multi-screen video platforms, which allow cable operators and telecommunication network providers to reach a larger subscriber base with cost-effective video services at varied locations. This will directly push the demand in India in the coming years. With 5G coming in, the OTT market in India is expected to gain further traction. Going forward, as demand for high quality content and seamless streaming rises, 5G will present the perfect opportunity to propel the OTT viewer experience to new heights – especially as video accounts for the majority of mobile internet bandwidth used today.
