India's overall online video market to grow at 26% CAGR to reach US$ 4.5 billion by 2025: Report

India's total online video market is anticipated to expand to US$ 4.5 billion in revenue over the next five years, growing at a compound annual growth rate (CAGR) of 26% between 2020 and 2025, according to Media Partners Asia (MPA) in its latest report called India Online Video & Broadband Distribution 2021.

In 2020, India's online video industry reported an estimated revenue of US$ 1.4 billion, while advertising and subscription contributed 64% and 36%, respectively.

According to MPA executive director, Mr. Vivek Couto, key services which accounted for a combined ~85% share to the total revenues in 2020 were YouTube (43%), Disney+ Hotstar (16%), Netflix (14%), Amazon Prime Video (7%) and Facebook (5%). He stated that in India and Southeast Asia, the average number of subscription for video-on-demand (SVOD) services subscribed by users is 2.8.

In its report, MPA anticipated that from 2020, the SVoD market will accelerate by 30% CAGR and reach US$ 1.9 billion by 2025. The video on demand (AVoD) advertisement segment is expected to rise at a CAGR of 24% over the next five years to reach US$ 2.6 billion by 2025.

According to MPA India vice-president Mr. Mihir Shah, in 2020, when the country entered into lockdown, subscription-based streaming video services gained significantly. In order to drive subscriber implementation, key businesses are focusing on premium local content while leveraging sports, movie rights, and aggressive consumer pricing. As Disney+ Hotstar ramps its direct subscription business, the SVoD market is expected to remain profitable while Netflix and Amazon Prime Video strengthen strategic alliances with mobile and fixed broadband operators.

MPA foresees Disney+ Hotstar can secure over 80 million subscribers in India if it continues to invest in regional originals and retain key sports rights. The online channel invested in the acquisition of big-ticket Bollywood movies in 2020, after which its subscribers increased to 26.8 million as of December 2020 and India accounted for 30% of its worldwide subscription base.

Mr. Shah said, YouTube continues to be the AVoD dominant player, accounting to 67% of total online video advertising in 2020. He further said that local premium content and sports rights will enable platforms backed by broadcasters to gain share. The monetisation of short-form video platforms will be improved by increased reach and engagement with rural millennials.

In 2020, OTT content investment in India reached US$ 700 million as domestic and global platforms continue to invest in the emerging opportunity for SVoD in India. OTT content cost is projected to grow at a CAGR of 18% to reach US$ 1.6 billion between 2020-2025.

Mr. Shah said, “While the direct-to-digital film premiere is probable to be sustained, the reopening of cinemas will not necessarily have an impact on OTT consumption. Also, with technologies like Airtel XStream and Jio Giga Fiber, the entire experience is also being formulated for urban-ready homes.”

As the commercial roll-out of 5G is expected to begin in 2021, India's mobile broadband penetration is projected to reach gradually to 66% by 2025. The new private telecommunications investment has boosted India's fixed broadband market, which has so far been underpenetrated by only 6% of households.

The report further estimates that India's fixed broadband market will expand to 45 million subscribers with over 82% of subscribers via fibre by 2025 at a CAGR of 18%.

The advancement of infrastructure has helped Indian consumers pursue enhanced broadband capabilities, including video conferencing, work from home, multimedia lessons, and video streaming.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.