Consumption patterns as more and more players enter the OTT Arena
Disruption in the market led by the revolution spearheaded by Jio, followed by other telecom service providers has magnificently increased the penetration of Internet, improved distribution and increased content consumption. Wide range of smart-phones, esp. the low budget high feature have fuelled smartphone ownership and an exponential increase in digital media consumption. Today mobile phones are personal entertainment devices for most users; leading to OTT players chasing these consumers and in the bargain partnering with telecom operators to improvise their video streaming offerings. These factors have led to strategic partnership between telecom operators, OTT streaming services and device manufacturers to offer discounted subscriptions and other bundled offerings.
The next wave of growth is to be led by the smaller markets beyond the metros & tier-1 towns. Consumption of regional language content has outpaced Hindi language content. Regional language comprises of 35-40% of overall online consumption in India, but is witnessing a growth of 65-70%. Short-form content and web-series are the driving forces catapulting regional language content amongst its audiences. Consumption of snacky content is no longer an urban phenomenon, regional audiences have picked on the trend and is a rage across vernacular languages.
While we are at the dawn of OTT industry evolution, the growth is sporadic as a result of new players both domestic & international. The content choices are expanding and newer genres are getting created each passing day.
Although the traction for OTT video streaming and downloading is only just building, a thriving ecosystem of content suppliers is being created as a result of multiple new players launching their digital streaming platforms. Furthermore, the entry of OTT players, both domestic and international, has expanded the choices available to consumers for consuming content and brought a significant shift in the user’s attitude, leading to an increasing demand for easy access to a vast library at any time and place. Thus, to provide a seamless and secure delivery of online videos, streaming platforms are strengthening their content delivery networks (CDNs) to entirely bypass the need for continuous internet connectivity by enabling offline streaming.
Growth of OTT viewership over the years
With 176 million India OTT viewers almost 3x growth over the pervious year is riding on revenues worth more than $500 million. Smartphone users are expected to cross 700 million by 2020, with this the OTT consumer base is set to hit 100 million unique viewers a month with a CAGR of 40-45%. Beyond adding new consumers segments, the OTT platforms offer targeted advertising, more immersive engagement, interactive capability and data analytical capabilities which vastly overshadow the traditional TV led advertising. This is turning out to be a very lucrative space for the advertising for the digital marketeers.
Early trends in 2018 for OTT
What we saw last year, will continue to be see this year as well; strategic alliances between OTT platforms and telecom industry will continue to co-own the video streaming offerings to the consumers. There would be a surge in alliances between handset/hardware manufacturers to integrate OTT applications on their devices thereby pushing a certain content offering to the consumer; this in any ways is a fast paced sector with new consumers of smartphones continuously adding to the user base. The growth of smart TVs and high quality displays on the handset would also lead in a new growth lever in the form of video output quality. Most prominent OTT players have multiple video viewing options with HD / 4K video offerings. This will be the new segmentation offerings being pulled out by the OTT players with time.
Regional language programming is another factor to fuel OTT viewership. Regional content offering to grow at approx. 30-40% and gain a share of ~25% of the overall consumption.
-Sachin Kamble
