The Indian entertainment and media industry is expected to reach Rs 4,51,373 crore by 2023, growing at a compounded annual growth rate (CAGR) of 11.28% between 2018 and 2023, according to a PwC report released on Thursday. Analysts at PwC estimate India’s video OTT (over-the-top) market to reach Rs 11,976 crore in 2023 from Rs 4,464 crore in 2018, growing at a CAGR of 21.8%. “The potential of India’s enormous scale will become reality during the forecast period with its OTT video market overtaking that of South Korea to become the eighth-biggest market in the world by 2023,” the analysts said. Subscription video on demand (SVOD) is estimated reach Rs 10,708 crore in 2023 from an estimated Rs 3,756 crore in 2018 on the back of attractive subscription rates, localised content and bundled packages, according to the report.
As Reliance Jio’s cheaper tariff plans led to an explosion of internet consumption in the country, consumers are increasingly taking to viewing content on smartphones.
Out of 3 billion smartphones across the world currently, the Indian market accounts for over 450 million, a Boston Consulting Group (BCG) report had said earlier. Almost 81% consumers have up to three video OTT apps on their smartphones. Sensing this opportunity, video OTT players are tying up with telcos to add to their subscriber base and shore up revenues.
While most of the catch-up TV content is monetised through advertising video on demand (AVOD) model, original content usually warrants the SVOD to recoup the investments.
Growth in OTT video will continue to outstrip the growth rate of TV subscription and cinema, as major players such as Netflix and Amazon set sights on India for their next cycle of subscriber growth, analysts at PwC said.
Netflix is testing mobile-only cheaper subscription plans for India that the company believes will help widen its user base in the country which currently stands at an estimated 1 million. Global players, Netflix and Amazon Prime video are building on their content library to woo Indian consumers. In 2017, Netflix spent $70-$80 million on original content while Amazon Prime Video spent an estimated $70 million.
The report says India’s internet advertising revenue that stood at about Rs 8,150 crore in 2018 will continue to grow rapidly in 2019 and is forecast to be worth Rs 18,445 crore in 2023. The total music revenue is forecast to hit Rs 10,858 crore in 2023, rising at a 13.5% CAGR due to proliferation of music streaming services, the report adds.