India's OTT video market will nearly triple in size by 2023: PwC

The OTT market in India will grow at 21.8% CAGR from Rs 4,464 crore in 2018 to Rs 11,976 crore in 2023, according to PwC’s Global Entertainment & Media Outlook 2019–2023. The Indian entertainment and media industry is expected to reach Rs 451,373 crore by 2023, growing at a CAGR of 11.28% between 2018 and 2023.

The report stated that the subscription for video on demand will also witness growth at 23.3% CAGR from Rs 3,756 crore in 2018 to Rs 10,708 crore in 2023. The study also states that the potential of India’s enormous scale will become reality during the forecast period with its OTT video market overtaking that of South Korea to become the eighth-biggest market in the world by 2023.

Internet advertising is also predicted to continue to grow in 2019 and is forecast to be worth Rs 18,445 crore in 2023. In 2018, a total Internet advertising revenue for India registered Rs 8,150 crore, a 40.2% year-on-year increase from 2017. The Cricket World Cup and General elections in 2019 are expected to boost advertising spends.

With a calendar of well-supported events and leagues emerging, the report forecasted a strong potential in the Indian e-sport industry. The low growth in the outside sponsorship than global markets is said to lead to 36.8% CAGR increase in India’s e-sports sector by the end of the forecast period. The main challenge for the segment has been poor online infrastructure, which has restricted growth. However, with improvements in infrastructure, this is expected to improve significantly in the near future.

With streaming services booming, the report also forecasted growth in the country's music, radio and podcasts market. The market registered Rs 5,753 crore in 2018, up from Rs 3,890 crore in 2014. The total music revenue is predicted to hit Rs 10,858 crore in 2023, growing at 13.5% CAGR.

If the market continues to grow at this pace, the report stated that India would be the fastest-growing major economy on the planet. And with a population surging past 140 crore, it is forecasted to surpass that of China in 2022.

The growth in the market is backed by the increase in podcast listening in the past few years. The monthly listeners (defined as people who listened to at least one podcast in the last month) totalled 4 crore at the end of 2018, up by 57.6% from 2.54 crore in the previous year. This has made India the world’s third-largest podcast-listening market (after China and the US), although it ranks much lower on a per capita basis. Growth is set to continue over the forecast period with listener numbers set to increase at a 34.5% CAGR to 17.61 crore by 2023.

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Rajib Basu, Partner & Leader – Entertainment & Media, PwC India, said, “India is the fastest growing entertainment and media market globally and is expected to keep that momentum. Our research shows that in the next 5 years India will see significant growth in OTT, online gaming and Internet advertising. Growth in these sub-sectors spurs from the growing trends around personalization and increased digitalization. Today's consumer can now control their own media consumption through an expanding range of smart devices and curate their personal selection of channels using OTT services. Content is being pitched not at audiences of billions but separately at billions of individuals. The soon to arrive 5G networks will create further use cases, enhance user experiences and create disruptions leading to newer business opportunities. Long-term players in the Entertainment and Media space need to gear up to take advantage of such opportunities.”

The report stated that there are four priorities that will shape companies’ strategies. According to the report, as companies approach both markets of individuals and individual geographic markets, they are finding that it makes sense to present different options: all-you-can-eat offerings with unlimited usage in some areas, tiers of payments for different services in less developed markets, and competing on affordability. Meanwhile, across all markets — mature and developing — PwC’s research finds stark differences in terms of segment growth.

The number of consumer touch points is also expanding as media and e-commerce experiences become more personal, gratification for consumers is becoming more instant and immediate. As a result, content creators and distributors are also devising new ways to appeal to consumers as individuals and marketers are figuring out how to meet consumers at the point of consumption and point them instantaneously towards purchase. The report suggest that the market will witness rise of shoppable online advertising, often promoted by ‘influencers.’ Voice is also becoming a key form of interaction for both search and shopping, supported by the rise of smart speakers.

According to report, as technological innovation has introduced a new era of personalised computing, companies are leveraging AI’s ability to understand people’s individual tastes and consumption habits to offer up the content individual users find most compelling. The combination of AI with 5G will be powerful, as it will fuel the rapid growth of segments such as video games and VR. The Outlook forecasts show video games' compelling combination of growth and scale, while VR will be the fastest-growing segment overall.

The report states that the trust and regulation remain pivotal, as personal data hygiene becomes key. With consumers moving to the centre of their own world of media experiences, their personal data — from the music they stream and the news they read to the products they buy — is taking a central role. In the emerging world, maintaining personal data hygiene is becoming key to the overall health of the E&M ecosystem. For companies, this goes beyond regulatory compliance, which is merely table stakes, and extends to building trust by behaving transparently and responsibly with customers’ data, ensuring the accuracy of news, and being sensitive to concerns around issues such as digital addiction.

Ennèl van Eeden, Global Entertainment and Media Leader and Partner, PwC Netherlands, commented, “The personalisation wave — fuelled by evolving customer behaviour — is set to be amplified by the forces of technology, scale, and aggressive investing and competition. The implications for organisations are profound. As the borders separating former media silos erode, companies need to think more broadly about the areas and segments in which they operate. At the same time, all E&M players must take the need to ‘know your customer’ more seriously, and marketers need to allocate their time and attention to new types of content and platforms — influencers, live events, ads inside apps and more. Finally, companies must focus intently on their core capabilities and geographical markets, while continually scanning the horizon for new developments and regulations, and being agile in responding to technological developments such as 5G. Put simply: it’s time to get personal with consumers — or be left out of the conversation.”

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