India faces hurdles in content production, including bottlenecks in physical infrastructure and a shortage of skilled technical talent. The concentration of content production in metros strains existing facilities, which struggle to meet the demands of the expanding media and OTT sectors.
Lata Jha
Published24 Jul 2024, 01:00 AM IST
While historically, TV has led content investments in the video industry, online video, excluding sports, already claims 24% share in 2024, a three time increase since 2017.
India's video market is on the cusp of a major transformation, with premium online video-on-demand (VoD) content set to play a pivotal role. A new report commissioned by Prime Video India and conducted by Media Partners Asia (MPA) reveals that streaming VoD will fuel half of the new revenue growth in the country’s video sector. The report, Beyond Screens – Streaming VOD's Impact on The Creative Economy, underscores the rapid evolution of video consumption and its significant implications for the industry.
MPA is an independent provider of research, advisory and consulting services across the media and telecoms sectors in the Asia-Pacific.
Streaming influence
The report expects India's video entertainment economy, propelled by streaming VoD, will reach a valuation of $13 billion by 2028. This figure represents an 8% average annual growth rate from 2023. Streaming VoD is expected to contribute half of the new revenue generated within the video market, which includes revenues from intellectual property owners, TV networks, and online video platforms.
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In 2023, the premium online video sector—encompassing operators that provide long-form entertainment, sports, and news—earned approximately $1.7 billion. This revenue is anticipated to double to $3.7 billion by 2028. The sector has invested $2.2 billion in local content, spanning entertainment and sports, to meet the burgeoning demand for high-quality, original content.
Historically dominated by TV, content investments are increasingly shifting towards online video. By 2024, online video, excluding sports, is projected to hold a 24% market share, a significant increase from 8% in 2017. This share is expected to rise to 30% by 2028.
Streaming platforms, including global giants like Netflix and Prime Video, as well as numerous domestic services, are heavily investing in local content across multiple languages. This investment trend underscores the growing importance of streaming revenues, which now equal 1.5 times the net share of theatrical box office receipts for movie producers, MPA said.
Monika Shergill, vice-president, Content, Netflix India, emphasizes the importance of original stories and voices to their brand's long-term success. "At the heart and centre of what we do is to back original stories and voices. They are a very important part of our brand and long-term success as a company," Shergill said.
According to MPA, investment in local entertainment content, including scripted, unscripted, and sports programming, reached $5.8 billion in India in 2023, a notable increase from $3.3 billion in 2018. Despite this growth, India's investment in entertainment lags behind that of Japan, Korea, and the United States, which lead with $10 billion, $6 billion, and $125 billion respectively.
The Indian OTT sector, which experienced a slowdown in investments in 2022, has remained cautious due to global pressures and sluggish subscriber growth. Platforms have since focused on securing high-profile films and experimenting with episodic content formats akin to traditional TV to engage viewers while managing costs.