India’s OTT video market to touch $7 billion by 2027: Report

India’s OTT (over-the-top) streaming video market is in its second growth phase with total revenues of $3 billion in 2022 expected to more than double to almost $7 billion by 2027, according to a new report by MPA (Media Partners Asia). Competitive intensity is set to grow between global giants and newly capitalised local players. Telco reach remains critical in the market along with AVoD (advertising video-on-demand) business models and low-ARPU (average revenue per user), high volume SVoD (subscription video-on-demand) services.

MPA is an independent provider of advisory, consulting and research services, focusing on media and telecoms in Asia Pacific and the Middle East.

Total Asia Pacific online video industry revenue will grow by 16% year-on-year in 2022 to reach $49.2 billion, according to the new report Asia Pacific Online Video & Broadband Distribution 2022, published by MPA. SVoD will contribute 50%; UGC (user-generated) AVoD, 37% and premium AVoD, 13%. The industry is to grow at an 8% CAGR to reach $72.7 billion in 2027, with SVoD:AVoD ratios remaining stable. Excluding China, the APAC online video industry will grow 24% in 2022 to reach $25.6 billion in revenue with SVoD contributing 47%; UGC AVoD, 43%; and premium AVoD, 10%. Excluding China APAC online video revenues are forecast to grow at a CAGR of 11% to $42.8 billion by 2027, with SVoD at 44%; UGC AVoD, 43% and premium AVoD, 13%.

In India, new local players with deep pockets are gearing up to grab market share, led by a newly recapitalised Viacom18, backed by strategics Reliance, Bodhi Tree and Paramount while domestic incumbents Zee and Sony are merging to create a strong television and online video business, the report said. Going forward, Viacom18’s new streaming platform, leveraging IPL cricket and local entertainment, will emerge as an important player in the AVoD space in particular, grabbing material share over time as it leverages massive reach via Jio mobile and connected TV.

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China, APAC’s largest market, will generate $11.2 billion in revenue in 2022, representing 48% of the APAC online video revenue pie. Indonesia is Southeast Asia’s largest online video market, generating close to $1 billion in revenue in 2022 with advertising contributing 62% and subscription 38%. The premium video sector (SVoD and premium advertising inventory) has emerged as a material revenue generator. Five major players – Netflix, Vidio, Disney+ Hotstar, MNC Digital and Viu – will account for 75% of premium video revenue in 2022.

According to MPA analysis, 20 online video platforms will account for 67% of the total APAC online video revenue pie.

YouTube leads with an estimated 42% share of the APAC excluding China AVoD pie in 2022. In the global SVoD category in APAC, Netflix, Disney and Amazon lead. According to MPA, the three players will have a 56% share in aggregate of the APAC excluding China SVoD pie in 2022 with Netflix at 33%; Amazon Prime Video, 12%; and Disney+ (including Disney+ Hotstar) at 11%.

Netflix established an early lead given its launch and expansion in APAC after 2015-16 and success with premium Korean and Japanese content in particular. Its share of revenues has declined however from 35% in 2021. Disney+ and Disney+ Hotstar services are building scale, local content investment and monetization in markets such as Australia, India, Indonesia, and Thailand while also expanding in high ARPU, strong local markets such as Japan. A third of revenues come from India however, where it has recently lost digital rights to the highly successful IPL cricket franchise to Viacom18. Prime Video leads the Japan SVoD category while also growing rapidly in India and is now set to expand in key Southeast Asia markets in the fourth quarter of 2022, the report said. 

“Investors are increasingly focused on enhanced scale, improved monetisation and real profitability across global, local and regional online video platforms. In this context, the role of Asia Pacific continues to have a critical role in the future of the global online video industry. The region remains the largest growth contributor to global online video customers and users today and is emerging as a significant contributor to revenue growth. With the US and Europe fast maturing and China inaccessible, APAC’s large markets – India, Indonesia, Japan, Korea and Thailand – will be increasingly important to global platforms,” MPA executive director Vivek Couto said in a statement adding that each of these markets require local content and distribution strategies with long-term investment.