In recent years, the Indian media industry has undergone a strong disruption, which has resulted in a 9% CAGR growth in the countryâs media consumption over the past six years. The growth is almost twice that of China and nine times that of the US.
According to the Boston Consulting Group (BCG) and Confederation of Indian Industries report 'One Consumer, Many Interactionsâ, the media and entertainment industry is going through a massive and unparalleled change, with the exponential growth of media and type of content available creating a trillion customer touch points.
Sudhanshu Vats, Chairman, CII committee on Media & Entertainment and Group CEO Viacom 18 Media, India said, "This change is not the future but rather is here and now. This is an unparalleled situation even for an industry that has always been at the forefront of disruption. The industry will now need new answers, and will need them fast even on the most fundamental things like talent pool to run our companies and methodology for measuring the impact we are delivering to advertisers on our platforms."
However, unlike in developed countries, Indiaâs growth is not cannibalising into traditional media. Instead, India has adopted a multimodal growth across all major media. For the next several years, India is expected to remain a multi-modal market where all forms of media, including traditional media like TV, will continue to co-exist.
Kanchan Samtani, Partner and Director, Boston Consulting Group India, elaborated on this uniqueness. "India is one of the few countries in the world where we are witnessing most mediums growing hand in hand and we see this continuing in the foreseeable future. For example, video consumption on OTT is supplementing linear TV vs. cannibalising it."
The report stated that media consumption will continue to grow with growing affluence, higher electrification and rural penetration, higher literacy and greater device penetration. Currently, there is a significant under-penetration of non-digital media wherein more than 95% TV households in India are single screen, as a result of which TV consumption is happening in a family viewing setting. At the same time, India has witnessed a digital explosion with the number of broadband users growing two times (~480 million broadband users across mobile and fixed) and the data consumption has become 10X (~10 GB per user per month) over the past two-three years.
According to the report, Indian consumers are consuming 190 minutes of video per day per user across platforms, which have been growing at 8% over the last five years. 30+ digital platforms have been added to the already wide range of TV channels. An average consumer consumes 10-15 channels per day and two-three apps in any given month. This proliferation has been accentuated even more by new viewing occasions, such as âWatchâNPlayâ on IPL11 had more than 33 million viewers. Also, TikTok, Twitter of videos, has seen a six-time growth in active users in the last one year and demonstrated powerful appeal for short-form videos and user-generated content.
Consumers are viewing different genres across screens. While Indian language drama and sports are common, spikes in other genres are recorded across different screens, which is a function of current supply as well as consumer preference. Global as well as Indian players are aggressively investing in original content. Players like Netflix invest aggressively to match 3x the investment made by top players like Amazon Prime and Hulu.
In India, video players have invested four to five billion dollars in 2017, which is 14% higher than their investment in 2016. Much of this investment is done behind âHeroâ content, which is three to four times more expensive than traditional video. OTT players across the industry are investing heavily in originals. However, as content is getting expensive, platforms have to rethink their strategy to attract consumers and get discover in this cluttered market.
The report also showcases real-life examples of successful new-age media and entertainment companies and highlights the need for media houses to work closely with other stakeholders. Samtani stated, "The media industry is leveraging technology at a very fast pace. We expect media companies to invest a significant amount of time and resources to create technical prowess as a key pillar of differentiation.â