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India’s video market set to grow to $18 bn in revenue in 5 years

India’s total video market, including television and online platforms, will reach $18 billion by 2026, growing at a CAGR of 9.5% from the current $11.6 billion, according to estimates by Media Partners Asia (MPA) at its APOS India Summit on Tuesday.

MPA is an independent provider of research, advisory and consulting services in media, telecom, sports and entertainment for Asia-Pacific and the Middle East.

Growth in future subscription revenues will come largely from online video. As the market expands, there will be more consolidation, particularly in the traditional television sector, but the entry of new foreign players will continue to expand the video pie and the share of online video. By 2026, India will have more than 200 million direct SVoD (subscription video-on-demand) subscriptions, in fact, one in every four broadband subscribers will pay for online entertainment and sports content. In revenue terms, currently Disney, Amazon Prime Video, and Netflix despite having a combined 75% share of the SVoD revenue market, continue to invest heavily to build their local slate of originals, with more depth and diversity expected in the future, MPA said.

Further, India’s online video ad revenue market will surpass the billion-dollar mark this year. Over the last 24 months, besides YouTube, Facebook and large direct-to-consumer brands, new categories of AVoD (advertising video-on-demand) players such as short video platforms have emerged especially in rural India. As a result, the market for online video advertising will continue to expand and grow at 16.5% CAGR over the next five years.

As they attempt to up their game in India, today 30% of the content investments by OTT players, both local and foreign, go towards commissioning or acquiring local originals. This share in coming years will increase to 40-45%, according to MPA.

Meanwhile, in the past 15 months, short video services have collectively secured nearly $2 billion worth of investments, much of it being used to fuel India’s burgeoning creator economy. Creators today are, on an average, making anywhere between $2,500 to $65,000 per month depending on their popularity and target market. This is powering the growth of the influencer marketing segment in India which currently stands at $120 million but should triple over next five years to $350 million, MPA said. Better broadband facilities will accelerate the proliferation of connected TV devices from smart TVs to hybrid STBs (set top boxes) and even dongles. Currently, India has five million daily active users on connected TV homes, which by 2026 will grow more than six-fold to 33 million daily active homes.

With sports emerging as a big category, MPA estimates the next round of IPL (Indian Premier League) rights to close at $4.5 billion versus $2.2 billion in the last cycle. Besides Walt Disney that currently owns the rights to the tournament for broadcast on the Star network and its OTT service Hotstar, aggressive contenders will include Reliance, Amazon, Sony and potentially, Facebook and Google, MPA said.

Apurva Chandra, secretary, ministry of information and broadcasting said in his opening remarks at the summit that the OTT segment had grown despite the disruption of the past few months. “Over 90% of the complaints with regard to content on streaming are resolved by the services themselves and hardly any have been brought to the inter-ministerial committee at the government level,” Chandra said referring to the three-tier self-regulatory mechanism outlined by the government earlier this year for digital platforms. The government, he added, was also in touch with broadcasters who have expressed apprehensions over the new tariff order (NTO 2.0) brought out by Trai (Telecom Regulatory Authority of India) and is considering nominating a member of the broadcast industry to become part of the regulatory body. Livemint

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