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India's OTT video market to reach $3 bn in 2022; estimated to double by 2027: Report

India and other large markets in APAC will be increasingly important to global streaming platforms

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Mumbai: India’s OTT video market will reach total revenues of $3 billion in 2022 and is expected to more than double to $7 billion by 2027, according to Media Partners Asia (MPA).

In the recent analysis, MPA looks at the online video and broadband distribution trends in the Asia Pacific (APAC) market.

The online video market in APAC is expected to grow 16 per cent year-on-year to reach $49.2 billion by the end of 2022. MPA forecasts that the industry will continue to grow by 8 per cent YoY to reach $72.7 billion by 2027.

Subscription video-on-demand (SVOD) is expected to contribute 50 per cent to overall revenues, followed by user-generated-content (UGC) advertising video-on-demand (AVOD) platforms which will contribute 37 per cent and premium AVOD that will contribute the remaining 13 per cent.

“APAC’s largest markets including India, Indonesia, Japan, Korea and Thailand will be increasingly important to global platforms,” observed MPA executive director Vivek Couto. “Each of these markets require local content and distribution strategies with long-term investment.”

The APAC region remains the largest contributor to global online video customers and its users are emerging as a significant contributor to revenue growth. In its recent quarterly results, streaming giant Netflix reported a loss in subscribers in every market (United States-Canada, Europe Middle East and Africa, Latin America) except APAC where it reported paid net additions of one million.

Also Read: Netflix to launch cheaper ad-supported plan for early 2023

Indian Scenario

As per the analysis, India’s OTT video market is in the second phase of its growth as competitive intensity is set to grow between global giants and newly capitalised local players. Telco reach remains critical in the market along with AOVD business models and low-average revenue per user (ARPU), high volume SVOD services.

In terms of SVOD business, Netflix, Disney and Amazon lead, with the three players having 56 per cent aggregate of the APAC market excluding China in 2022. Netflix will have 33 per cent share followed by Amazon Prime Video at 12 per cent and Disney+ including Disney+ Hotstar at 11 per cent.

Netflix’ s share of online video subscription revenues has declined from 35 per cent in 2021 while Disney+ and Disney+ Hotstar services are building scale, local content investment and monetisation in markets such as Australia, India, Indonesia and Thailand while also expanding in high ARPU, strong local markets such as Japan. A third of Disney+ revenues come from India, however, where it has recently lost digital rights to the highly successful Indian Premier League (IPL) cricket franchise to Viacom18.

Prime Video leads the Japan SVOD category while also growing rapidly in India and is now set to expand in key Southeast Asia markets in the fourth quarter 2022.

In India, new local players with deep pockets are gearing up to grab market share, led by a newly recapitalized Viacom18, backed by strategics Reliance, Bodhi Tree and Paramount while domestic incumbents Zee and Sony are merging to create a strong TV/online video business.

Going forward, Viacom18’s new streaming platform, leveraging IPL cricket and local entertainment, will emerge as an important player in the AVOD space in particular, grabbing material share over time as it leverages massive reach via Jio mobile and connected TV.

Ad-supported SVOD models will launch across Asia Pacific in 2023-24, led by Netflix and Disney+.

Broadband distribution landscape

The total addressable market (TAM) for high-speed broadband continues to expand rapidly in Asia Pacific with greater 4G, 5G and fiber-enabled connectivity.

Excluding China, the combined 4G and 5G users will reach 78 per cent of the population across APAC in 2022 while fiber-driven fixed broadband penetration will reach 31 per cent.

Teclos, connected TV (CTV) operators and pay TV operators remain important aggregators of SVOD, freemium and AVOD services, contributing between 20 to 80 per cent to OTT video platform reach, depending on the market.

The rising CTV penetration and big screen consumption of online video content is helping fuel advertising growth across YouTube and premium SVOD platforms, led by broadcast video-on-demand (BVOD) players in particular, while also bolstering demand and monetisation at SVOD platforms.

“Investors are increasingly focused on enhanced scale, improved monetization and real profitability across global, local and regional online video platforms. In this context, the role of Asia Pacific continues to have a critical role in the future of the global online video industry,” said Couto.

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