Disney+ Hotstar has 41% share of Indian online video subscription market: Omdia

The OTT platform's subscription base tripled in less than a year, from 8 million in April 2020 to around 25 million by the end of 2020

e4m by Javed Farooqui
Published: May 7, 2021 8:27 AM  | 5 min read

Star India-owned video streaming platform Disney+ Hotstar is heads and shoulders above other over the top (OTT) platforms in terms of subscriber base. According to London-based Omdia's 'India: Online Video Trends and Omdia Consumer Research Highlights' report, Disney+ Hotstar leads the subscription VOD market with a 41% share.

Closely following Disney+ Hotstar is Eros Now with a 24% share followed by Amazon Prime Video (9%) and Netflix (7%). ZEE5 and ALTBalaji both had a 4% share of the market followed by SonyLIV which has a 3% market share. Apple TV+, YuppTV, and Voot Select had a similar market share at 1%.

The COVID-19 pandemic has been a great accelerator for the Indian SVOD market with OTT video subscriptions reaching almost 62 million at the end of 2020, doubling from 32 million at the end of 2019.

The report authored by Omdia's Principal Analyst, TV & Online Video Constantinos Papavassilopoulos, Senior Analyst, TV & Online Video Jun Wen Woo, and Senior Analyst, Advertising, TV & Online Video Kia Ling Teoh notes that the biggest contributor to subscription growth in India is Disney+ Hotstar.

Disney+ Hotstar’s subscription base tripled in a year from 8 million in April 2020 to around 25 million by the end-20, thanks to Indian Premier League (IPL) cricket coverage and the competitive pricing of its annual plan. Omdia believes Disney+ Hotstar will continue to lead the standalone subscription online video market.

The report noted that Eros Now's subscription growth can mainly be attributed to an extensive network of local partnerships with telcos such as Idea Cellular, Reliance Jio, and BSNL and pay-TV operators including Airtel Xstream and Tata Sky Binge+. Omdia estimates 90% of Eros Now subscriptions are bundled users.

Netflix also grew its subscription base significantly to 4.4 million subscribers up from 2.4 million in 2019. Netflix and Disney+ Hotstar accounted for 50% of all SVOD subscribers in India in 2020.

Omdia expects a large proportion of online video subscriptions to be kept as a result of a more permanent change in consumer behavior and of cord-cutting. Other factors driving online video growth include affordable subscription packages such as mobile-only, annual, and bundled plans offered by service providers.

"We are happy to be standing at par with these global OTT players and are making sure to capture the length and the breath of the Hindi Heartlands of our country with our enthralling storytelling. While, rightly mentioned the tremendous growth witnessed by SVOD platforms during the global pandemic, at ALTBalaji, we added 2.1 million paid subscribers in the last quarter alone (Q3 FY21). We currently offer a content bouquet of 80+ Hindi originals and are happy to be winning the hearts of the Bharat audience majorly. With some exciting news in the future, we are hoping to break even soon," said ALTBalaji SVP, Marketing & Revenue Divya Dixit.  

The online video-on-demand (VOD) subscription market reached a value of $639 million in 2020, up 142% from $265 million in 2019. Disney+ Hotstar and Netflix led in terms of revenue share: between them, they account for 78% of the total online video subscription market, the report stated.

The report projects that $840 million was invested in Indian content production between 2017 and 2019 with 2020 being a lost year because of the pandemic. Omdia expects $4 billion to be invested in original content production in India between 2021 and 2025, including more than $1 billion in 2025 alone.

According to the report, content is the number one factor leading to service uptake. Omdia’s survey data shows the top three OTT service uptake drivers are all content related. First is “want to watch a specific program or series” (31%), followed by “range of content” (30%) and “watch original content by provider”’ (29%).

The current overcrowding of the market means consolidation in this sector is inevitable. Omdia expects a lot of M&A activity among local players in the coming years as the market continues to develop.

According to experts, the Indian OTT players will double down their focus on the subscription business as the advertising business is going through a rough patch due to the pandemic.

"According to me, the country today has about 35 odd million subscribers and 50-60 million subscriptions. This keeps changing because of sports or programming changes. This is growing at 80% or 100% year on year. SVOD is a very fast-growing segment and it will continue to grow. Disney+ Hotstar and Amazon are the leaders but all others will be in 3-5 million range in paid subscribers. Netflix would be the revenue leader because of higher ARPU," said Kurate Digital Consulting senior partner Uday Sodhi.

Pandemic is going to create ups and downs in the AVOD business. Subscription revenue is becoming an important part that OTT platforms are going after. In first wave of the pandemic, the ad revenue had gone for a toss for three-four months. I would suspect it might happen again.  As a result, OTT platforms will start looking at subscription revenue in a serious way because it is a stable revenue stream.

A senior executive with a leading OTT platform concurred that by saying that subscription is becoming a very important revenue stream for the OTT players. The executive asserts that the platforms that follow a hybrid business model like ZEE5, SonyLIV, and Voot will look to aggressively grow their subscription business.
"AVOD players will face serious challenges going forward. Most of the ad revenue in the streaming space is gobbled up by YouTube. The ad revenue of all AVOD platforms pales in comparison to YouTube. Therefore, subscription is the way forward. The pandemic accelerated the SVOD business. Once a customer starts paying for quality content there is no going back to other platforms," the executive stated.

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