India registers 60% growth in paid OTT subscribers during pandemic

Indians are fast learning to pay for the content they consume as they turned to media and entertainment offerings to keep themselves engaged during the pandemic-induced lockdowns earlier this year. SVoD (subscription video-on-demand) has registered a 55-60% year-on-year growth in India in 2020, with more than half of these new users likely to continue using the service, according to the annual M&E report by the Boston Consulting Group (BCG) along with the Confederation of Indian Industry (CII).

Titled ‘Lights, Camera, Action…The Show Goes On,’ the report was released at the CII Big Picture Summit 2020 that was held in partnership with the ministry of information and broadcasting on Wednesday. The report said tier-two, three and four towns have taken the lead in availing OTT services by clocking 1.5 times the number of new OTT (over-the-top) users as compared to metro and tier-one cities during the pandemic.

Overall, smartphone consumption that was 37% higher than pre-covid times at the peak of the lockdown has now stabilised to 13% more. Video streaming alone notched up 21 billion weekly viewing minutes in April but is now down to 18 billion.

Growth in the Indian M&E sector is multi-modal, the report said, with all categories including television (6.7%) and print (0.3%) showing increased consumption during 2018-20 but digital leading the way with 14.5% CAGR.

Thanks to the lockdown, the year saw 27% decline in footfalls at retail and recreation places, as big platforms introduced new subscription tiers to capitalise on people’s propensity to pay, such as the Netflix mobile-only plan priced at ₹199 or ZEE5 regional packs that come at ₹49 per month.

The pay-per-view model too is slowly gaining traction, with a one-time viewing pass to movies priced at ₹79-299 by services like ZEE5, Shemaroo Me, YouTube, and Apple TV. Further, 30% of all OTT video subscriptions come from telco-bundled partnerships such as those with Airtel and Reliance Jio. Investment in local language original content too is a major driver, which has tripled since 2018.

Meanwhile, TV subscriptions too are expected to rise in India, about 3% higher on year. DTH subscribers surged initially in the lockdown but over time, consumers started optimizing channel subscriptions due to limited fresh content, the report said. Subscribers are expected to increase by 6-7% as fresh content has returned to TV and cable TV subscribers move to DTH. India is currently home to 207 million TV households with the share of DTH homes growing from 35% to 36% this year. While TV consumption was 20% higher than pre-covid till September, it has been returning to pre-pandemic levels since.

“There has been a huge spike in media consumption and that is expected to sustain going forward. It is important to note that digital has not grown at the cost of traditional media, and the drivers for that are the fact that people are taking more short breaks, watching more short-format video and non-prime time television or adding a second screen at home,” said Kanchan Samtani, managing director and partner, Boston Consulting Group India.

Samtani added that it has been a difficult year for advertising. While overall advertising revenues will decline by 16% , digital will remain the only segment to show growth of anywhere between 12% and 18%. In fact, the 15% share of total advertising that digital was expected to command by 2022 will be achieved by 2020, the report said.

“Entertainment remains one of the basic human needs. This year has shown that when one mode of distribution dries up, another waits to open,” Siddharth Roy Kapur, co-chairman, CII National Committee on media and entertainment, president, Producers Guild of India, and managing director Roy Kapur Films, said at the event’s inaugural session. He was referring to the shutdown of movie theatres and the opportunity for OTT platforms this year. Livemint