The media and entertainment sector in India comprises of multiple segments such as television, print media, radio, and movies. But the sunrise segment in the industry, in recent times, has clearly been the online video content market. Driven by the rapid digital adoption, over-the-top (OTT) video services have been evolving at a much higher pace than previously estimated. The introduction of multiple players in the sector catering to different niche segments has further got consumer eyeballs glued to their digital screens, leading to increased diversity in content. The OTT entertainment industry, as a result, has not only facilitated the Indian audience’s migration away from the conventional entertainment consumption formats, but is also opening several new avenues for the Indian entertainment sector.

Some of the key contributors to this development include better digital infrastructure, the roll-out of 4G services, and gradually decreasing smartphone costs along with cheaper data tariffs. A burgeoning middle class and improving digital literacy have also been pivotal to bring about this change. The biggest contributor to the growth of OTT entertainment, however, has been India’s young population. Comprising more than 65 percent of internet users belonging to the 15-34 years age group, this particular demographic has driven the demand of online content with its strong desire to watch its favourite entertainment content anytime, anywhere, on any device. Online content demand has also received a push from the Indian diaspora, which is recognised to be the largest community of expatriates across the globe at an estimated 16 million people. The ever-increasing internet user base has also added a stimulus to the demand for online content in the country. According to a report by Internet and Mobile Association in India (IMAI), India’s internet user base will exceed 500 million by 2018. This figure must have already been touched if government’s projections for the last year have panned out accurately.

OTT platforms have taken innovation to the next level by enabling low data consumption along with real-time low latency streaming to enhance the digital entertainment experience of their users

The biggest advantage that the online media provides to its users is the flexibility and on-the-go availability of content. Conventional media, on the other hand, abides by a structured format with scheduled broadcasts and strict timelines. Such media formats bank on ‘one-size-fits-all’ approach which limits their scalability and audience. Though digital cable TV connections in India have also picked up pace, the pause-and-play feature is only available on the select high-end subscriptions. This limits the flexibility of TV-based viewing. These issues,

however, are automatically resolved through online media platforms. Many OTT platforms have also been able to strike a chord with passionate sports fans in India by including live streaming features in their service offerings. Live streaming is characteristically observed to have higher audience response as compared to post-broadcast reception at any time. Multiple OTT platforms have acquired exclusive broadcasting rights to live stream major sporting events, a development which has been backed by phenomenal end-user response.

At present, 45 percent of OTT users consume content in regional languages. With increased digital adoption across the rural geographies – estimated to collectively comprise almost 70 percent of the nation’s population – this figure is expected to significantly increase in the coming years. The subscription and ad-driven revenues have also considerably amplified with the increasing user base. This change in unit economics has enabled online platforms to increase the revenue share for content producers, thereby giving the generation of high-quality content in niche segments a big boost.

The prospects for online media have been further bolstered by improved internet speed. Some OTT platforms have taken innovation to the next level by enabling low data consumption along with real-time low latency streaming to enhance the digital entertainment experience of their users. This focus on innovation is why online video content is witnessing considerable traction not only from urban geographies, but also from non-urban areas such as tier-2 and tier-3 cities. The rural areas, prone to frequent power outages, are also gradually shifting towards online media formats for a seamless entertainment experience. The government’s National Optic Fibre Network, which is expected to be completed by the end of 2017-18, will also give a fillip to OTT adoption. Upon completion, it will equip 1.5 lakh gram panchayats in the country with high-speed internet access, further increasing the purview of online content enablers looking to reach out to the relatively untapped rural populace with their attractive service offerings.

Given the unmatched degree of comfort, quality, and convenience, the demand for OTT services will increase considerably and will be tapped through multiple service distribution channels. They are, at present, being made available online through websites, mobile apps, OTT-enabled set-top boxes, and Smart TVs. This market development is the result of varied tastes and the level of tech innovation on OTT platforms. A research report by Frost and Sullivan projects at least 30 percent of Indian household televisions to leverage OTT services by 2020. The same report also estimates about 66 million unique connected video viewers in the country at present, and about 1.3 million paid subscription-based users. The OTT market is expected to grow at around 30 percent YoY growth rate till 2021, which will be largely driven by infrastructural improvements and increased awareness relating to OTT offers.

On-demand and personalised viewing is observed to gain prominence in the way people consume content now. The data usage share for video and audio content has been clocking 79 percentof the overall data usage in India. Increased digital adoption vis-à-vis smartphone penetration is further fuelling the demand for on-the-go content. As the digital ecosystem in India improves, the fast-maturing online media industry is expected to bring about a paradigm shift by truly redefining entertainment for the new-age Indian viewership.