iWorld

Strong Netflix growth underlines OTT growth potential in India

Netflix India has recorded an impressive growth of more than 700 per cent in the past 12 months.

https://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2019/11/12/Netflix.jpg?itok=x3vqyRv-

MUMBAI: Netflix India has just posted its earnings with the registrar of companies and reportedly, the video streaming giant has grown more than 700 per cent in the past 12 months.

While the company doesn’t share these details publicly, an ET Tech report, quoting Netflix’s annual filing, says that the Indian-arm of American video streaming giant recorded overall revenues of Rs 466.7 crore with a net profit of Rs 5.1 crore. In 2018, the company had a turnover of mere Rs 58 crore with Rs 20 lakh net profit.

No doubt, Netflix has upped its game in India by investing in expanding local content, a high-stakes marketing blitzkrieg and the launch of mobile-only plans starting at as low as Rs 199 per month, Netflix’s lowest subscription plan anywhere in the world. The strong growth posted by Reed Hastings-owned company, however, only underlines the tremendous growth potential for OTT platforms in the Indian market.

As per EY and FIICI 2019 report – ‘A Billion Screens of Opportunity,’ the OTT sector in India grew by a whopping 59 per cent in FY2019, growing from Rs 13.5 billion in 2018 to Rs 17 billion in 2019. The sector is estimated to reach Rs 24 billion by 2021. PwC, in its 2019 annual report – ‘Global Entertainment & Media Outlook 2019-2023,’ estimated that the Indian OTT market will grow to Rs 11,976 crore by 2023, growing at a CAGR of 21.8 per cent. During that period, India is also slated to be the eight biggest OTT market overtaking South Korea.

OTT platform expansion in India is also supported by rising digital penetration and disposable income. In 2018, digital media grew 42 per cent to reach Rs 169 billion. As per the FICCI 2019 report, paid video subscribers grew from around 7 million in 2017 to around 12-15 million in 2018. The report further estimates that India could have 30-35 million paying OTT subscribers (and a further 350+ million subscribers accessing bundled OTT services from telcos) by 2021.

All these market studies only buttress one point, i.e. there is enough space for over 30 OTT players in India, both home-grown like Zee5 and AltBalaji, as well as global-giants like Netflix, Amazon and Hotstar, to co-exist and grow simultaneously. The same is also reflected in the ever-increasing subscription base of all these platforms.

While Netflix in India registered near 700 per cent growth, in terms of subscribers, it’s still dwarfed by Hotstar that has upwards of 300 million active monthly users in India. In comparison, both Netflix and Amazon, the two global-giants in video-on-demand industry, together have less than 30 million subscribers in India. Even the home-grown late-entrant to the party, ZEE5, digital-arm of Zee Entertainment Enterprises Ltd's (ZEEL) launched in February 2018, increased its monthly active users from 21.7 million in the first quarter of 2018 to 76.4 million in the first quarter of 2019.

It’s pertinent to note that different OTT platforms in India are also adopting different expansion strategies. While global premium content was Netflix’s strength, Amazon expansion was helped by its clubbing of Amazon prime video with its online-retail service. Hotstar banked on sports telecast, whereas ZEE5 launched in 12 different languages, making it a strong player in the expanding regional market.

To be sure, though, the road-ahead for OTT platforms in India is not all that rosy. For one, no OTT platform has yet cracked the perfect monetisation model. While revenue and subscriber base are, indeed, increasing at a healthy pace, net profits are still meagre. Even Netflix, despite registering a 700 per cent growth rate, has posted a net profit of only Rs 5 crore. Barring Hotstar, that generates revenue through advertising during live sporting events, no other OTT player has successfully integrated advertising on their platforms.

For now, Netflix India is reaping dividends of being the early-mover in the market, as well as strong global premium content combined with local original shows and movie titles. Last fiscal, Netflix released six original films, five web-series and one docuseries in Hindi. The company has also signed an exclusive output deal with Karan Johar's Dharmatic Entertainment. However, the OTT war for subscribers in India is only heating up. With the foray of global players like Apple TV+ and Disney+, as well as region-specific OTT platforms like Hoichoi and Simply South, the Indian OTT market may see further segmentation, forcing companies to constantly innovate, expand and experiment with a variety of new advertising models.

Latest Reads

https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/23/eros.jpg?itok=100GnU2Y
ErosNow gets into a mess with provocative social media posts

These are sensitive times. Brands and influencers have to tread carefully, almost as if they are walking on egg shells. Streaming service Eros Now learnt it the hard way over the past couple of days.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/paul.jpg?itok=3i-HPdL5
Synamedia appoints Paul Segre as CEO to spearhead next growth phase

MUMBAI: Video software provider Synamedia has brought in Paul Segre as CEO, with immediate effect. Segre takes over from departing CEO Yves Padrines, who has overseen the company since its inception in 2018.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/watcho.jpg?itok=3pUPViZI
Watcho launches interactive Quiz contest ‘Watcho Aur Jeeto’ for its subscribers

Committed to delivering an innovative and engaging content experience to its users, Watcho, Dish TV India’s OTT platform has announced the launch of ‘Watcho Aur Jeeto‘- an engaging quiz contest. The contest will be running daily with additional bonanza offers on weekends. Each quiz will have a...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/zee5_800_new_1.jpg?itok=yln0_PLz
Zee5 partners with Meghbela Broadband to strengthen ISP distribution

MUMBAI: The Covid2019 pandemic has changed consumers’ viewing habits, with a lot of people migrating to the OTT space for at-home entertainment in the last few months. Zee5 has seen over 3X growth in its consumer base and it is now looking to expand beyond the traditional DTH and Cable TV. To this...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/mirza.jpg?itok=JM9a1hke
Brands leverage Amazon Prime's Mirzapur 2

Amazon Prime Video’s Mirzapur is hot property right now. Fans are eagerly looking forward to the gritty crime-thriller’s second season, which drops on October 23.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/21/net_0.jpg?itok=D79hQsJX
Netflix plans to give free access for a weekend in India

KOLKATA: Netflix has been constantly innovating its marketing and promotion strategy in India to get more users to sign up. Now, it plans to give free access to the Indian audience for a weekend. “We think that giving everyone in a country to access Netflix for free for a weekend could be a great...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/21/net.jpg?itok=XTrDh5Mi
Netflix Q3 result: Continues to grow strong in APAC, much work to do in India

Netflix fell short of global subscriber additions in Q3, albeit a slower growth was forecasted by the streaming giant. The company has added 2.2 million net subscribers in the quarter, even lower than its prediction of 2.5 million.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/20/mx.jpg?itok=ePhLYsJf
MX TakaTak launches Fame House for top Indian influencers to create and collaborate

KOLKATA: Short video app MX TakaTak is the new home for content creators across the country, with over 6 million digital influencers, and counting, under its umbrella. In order to nurture and give a platform to these talented digital enthusiasts, MX TakaTak has announced the first edition of MX...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/20/pockr.jpg?itok=MEsGxhkQ
Pocket Aces partners up with Tinder & Pure Me for Firsts Season 3

MUMBAI: Pocket Aces is back with a new season of the hit Instagram series, Firsts. Presented by Tinder and PureMe, Firsts Season 3 explores a same-sex romantic relationship between two young women, who match on the dating app and experience an exhilarating journey of understanding love, life, and...

iWorld Over The Top Services

Sign up for our Newsletter

subscribe for latest stories

* indicates required