28. Rise of OTT and Impact on Television

Caption: blog.technavio.com

According to reports by PWC Global Entertainment and Media Outlook 2019-2023¹, which was published on Economic Times on June 10, 2019, in India, Over the Top Services (OTT) are expected to grow at a rate of 21.8% in compound annual growth to reach $1.7 billion by 2023. It is also projected that India is going to be the 8th largest OTT market by 2023, overtaking South Korea. At the same time, India has the third-highest TV revenue at $10 billion and is expected to reach $17.59 billion by 2023. These figures point towards interesting insights. While, it was expected that with the rise of OTT platforms and viewership in India, the Television viewership would be affected, but, it is not rightly so. India has a massive TV audience base, and it is only increasing with every day. In fact, according to BARC, the largest media spends are on TV.

OTT platforms have revolutionized the way we watch content. Here I would like to point out the effect of Jio in changing the digital space of India. We have seen rapid growth in data consumption after the introduction of the Reliance Jio 4G network in September 2016. Jio has been able to disrupt the telecom market by offering cheap data packages. This has led to increased video consumption too, leading to the creation of new OTT platforms, such as Hotstar, ZEE5, AltBalaji, Voot, etc.

In a digital OTT platform, we have the flexibility of consuming content anytime, anywhere.

Television sets also serve as a device to these OTT platforms, via technologies like Amazon Stick. But TV viewership isn’t fading away, and will not fade away. This is because of various reasons.

First, the expectation from both these mediums is very different. For example, OTT platforms have bit-sized content, with short duration episodes. On TV, people expect longer versions of the programs. Secondly, while OTT platforms are most focused on individual consumption, most often on mobile devices, television is part of the daily routine of an Indian family. Although the practice of an entire neighborhood gathering on a Sunday morning to watch Shaktimaan is gone, Television still has a special place in the heart of all Indians. Third, television is still dominated in the rural parts of India. OTT platforms are yet to permeate these parts of India. OTT viewership is only dominant in urban areas. This is because OTT is also expensive compared to local cable connections. This is linked to our last point, OTT devices do not have the best of regional content. In that sphere, Television still dominates.

So what is the future trend? With the increasing growth in data consumption and the introduction of 5G in India, the country will see massive growth in the viewership of both OTT platforms and television. While traditional TV has remained resilient and will remain so, digital platforms will have strong growth.

1. https://www.pwc.com/gx/en/entertainment-media/outlook-2019/entertainment-and-media-outlook-perspectives-2019-2023.pdf