Video OTT market in India to be among global top 10 by 2020; touch $823 mn: Study

Video OTT market in India - which primarily comprises content streaming services - is likely to be ranked among the top 10 markets globally with a market size of USD 823 million (about Rs 5,363 crore) by 2022, a ASSOCHAM-PwC joint study said Thursday.

"The Indian video OTT market is at a fairly nascent stage, the video OTT market globally has entered into the growth phase of the market life cycle. With a CAGR of 22.6 per cent during the period of 20172022, the Indian video OTT market is poised to outperform the global video OTT market, which is pegged to have a CAGR of 10.1 per cent during the same period," it said.

The study titled 'Video on Demand: Entertainment reimagined' further noted that by 2022, the Indian video OTT market will be amongst the top 10 markets globally with a market size of USD 823 million (Rs 5,363 crore).

Video OTT (over the top) services in India include the likes of Netflix, Amazon Prime Video, YouTube etc.

"The five fundamental drivers of this convergent business model are uninterrupted connectivity, mobile devices becoming the primary source of content consumption, the need to move away from traditional revenue streams, value shifting from content creators to platforms, and ability to provide a personalised offering to the consumer," the report said.

During the same time, the number of smartphone users in the country is expected to touch 859 million by 2022 from 468 million users in 2017, growing at a compound annual growth rate of 12.9 per cent.

With lower-than-ever data tariffs and increasing smartphone penetration in the country, it is safe to assume that the video on demand (VoD) market will be a significant beneficiary of these developments, the study said.

"Internet consumption is clearly on the rise in India. The important factor for the VoD industry is the availability of devices that are compatible with online video viewing. A large volume of consumption occurs on smartphones," it added.

Apart from smartphones, tablets are another promising device for the VoD industry.

"However, India has just about 5.3 per cent penetration as of 2017, and this is expected to go up to just about 10 per cent in 2022. The low penetration is definitely a missed opportunity for players as tablets offer fairly larger screens which are better for consuming HD content as compared to smartphones," the study said.

The study further pointed out that television is the largest sub-segment within the entertainment and media industry, and will continue to remain so in the near future.

While the Indian television industry is set to grow from USD 13.3 billion in 2017 to USD 22 billion in 2022 at a CAGR of 10.6 per cent, the global growth average is as low as 1.4 per cent, it said.

"This proves that India will continue to ride on traditional forms of entertainment despite the disruption in the industry. Television is one of the most economical forms of content consumption, making it a popular source of entertainment for rural India," noted the joint study.