India’s online video industry generated an estimated US$1.4 billion in revenue in 2020 with advertising contributing 64% and subscription 36%, according to a new report, India Online Video & Broadband Distribution 2021, published by Media Partners Asia (MPA).
While there are close to 60 platforms operating in the market, the top five platforms YouTube, Disney+ Hotstar, Netflix, Amazon Prime Video and Facebook accounted for a combined 85% share of total revenues in 2020. India’s overall online video market is projected by MPA to grow at a CAGR of 26% over 2020-25 to reach US$4.5 billion.
Commenting on the findings of the report, MPA India Vice President Mihir Shah said: “Subscription-based online video services benefited significantly in 2020 as the country went into the lockdown. Key players are investing in premium local content while leveraging sports, movie rights and aggressive consumer pricing to drive subscriber adoption. The SVOD market will remain competitive as Disney+ Hotstar scales its direct subscription business while Netflix and Amazon Prime Video deepen partnerships with mobile and fixed broadband operators. These three platforms accounted for almost 80% of the SVOD revenues in 2020.
"YouTube remains the market leader in AVOD, accounting for 67% of total online video advertising in 2020. Its market share is expected to decline to 55% in 2025 as domestic broadcaster-backed platforms and short-form UGC video players expand share. Local premium content and sports rights will help broadcaster-backed platforms gain share. Increased reach and engagement with rural millennials will improve monetization for short-form video platforms.”
MPA projects the SVOD market to reach US$1.9 billion by 2025, a 30% CAGR from 2020. Online video advertising reached an estimated US$909 million in 2020, a marginal decline of 2% Y/Y as reduced demand has forced advertisers to recalibrate advertising budgets. The AVOD segment is expected to expand at a CAGR of 24% over the next five years to reach US$2.6 billion by 2025.
India OTT content investment reached US$700 million in 2020 as both domestic and global platforms are investing in India’s burgeoning SVOD opportunity. With budgets for originals and local acquisitions trending upwards, OTT content costs are projected to grow at a CAGR of 18% between 2020-25 to reach US$1.6 billion.
The 4G revolution helped drive the country’s mobile broadband penetration to 43% as of Dec. 2019. With commercial rollout of 5G expected to begin in 2021, India’s mobile broadband penetration is forecast to grow steadily to 66% by 2025. Fresh investments by private telecom players have reinvigorated India’s fixed broadband market which is underpenetrated at merely 6% of households. India’s fixed broadband market is projected to grow at a CAGR of 18% between 2020-25 to reach 45 million subscribers with more than 82% of subscribers through fiber.
With the infrastructure upgrades, consumers are identifying new uses for the expanded broadband capacity including work from home, education from home, video conferencing, as well as online video streaming. Alliances and partnerships are emerging which facilitate the sale of VOD and data bundling packages. Jio has collaborated with all leading platforms, while Airtel has tied-up with Amazon Prime Video and ZEE5 for its fixed broadband offering.
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