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Pricing, analytics, customization, video quality crucial to decide OTT market leader: Frost

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MUMBAI: The nascent over the top (OTT) video market in India is growing as smartphone penetration and 3G and 4G subscribers continue to increase rapidly. The recent launch of Reliance Jio’s affordable data services and initiatives, such as Bharat Net, will continue to drive down data service prices, boosting video consumption over fixed and mobile broadband.

“It will be critical for market participants to gauge viewership trends, price sensitivity and technical requirements while offering their video services,” said Frost & Sullivan digital media director Vidya S Nath. “Pricing, data analytics, personalization and video quality will be crucial in defining the market leader in the next five years.”

The Over the Top (OTT) Video Market Update, India, 2016 analysis is part of Frost & Sullivan’s Digital Media Growth Partnership Service program, which includes research, consumer analytics, consulting and advisory services on pay television (TV) services and media technologies.

While the dominance of YouTube and TV reins in subscription-based models, making digital advertising the most used business model for now, OTT video providers have confidence in the growth prospects of the market:

. India has over 300 million Internet users and about a billion smartphone users

. Millennials and Gen Y comprise about a third of the population and are driving viewership trends toward personalized content

. The country’s fragmented demography offers more than 20 types of audiences by major languages, creating tremendous opportunity for content creators and producers

. OTT providers can target Indian immigrants internationally

The market is already crowded with about 25 market participants that include telecom operators, direct-to-home (DTH) TV providers, broadcasters and individual OTT providers. The number of participants will grow further over the next two years.

“Even though the return on investment for OTT services providers is slow and does not justify the business proposition in the short run, competition will spur all broadcasters to consider the OTT business,” noted research analyst Aafia Bathool. “Exclusive content at a competitive price with a sophisticated, user-friendly interface is the way forward. To achieve this, the market will see increasing strategic alliances among ecosystem players.”

Key participants in the current market include Hotstar, Eros Now, Ditto TV (Zee Networks), Asianet Mobile, YouTube, and Netflix. New market participants who will likely intensify competition include Amazon and Balaji ALT. Other market participants include Reliance Jio, Airtel, Vodafone, Zee Network, Voot, Viacom, Spuul, Veqta, Yupp TV, Dish TV, HOOQ, Hungama, Shemaroo, SonyLIV, and Tatasky.

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