Indian OTT market set to grow by 2X from $1.8 bn in 2022 to $3.5 bn by 2027: PwC

Revenue of the Indian over-the-top (OTT) market is set to nearly double from $1.8 billion in 2022 to $3.5 billion by 2027, according to the PwC's Global Entertainment and Media Outlook 2023-2027.

With new launches from international players and increasing ‘pay-lite’ options, OTT revenue has surged in India reaching $1.8 billion in 2022 – over six times the revenue of 2018 and a 25.1% increase from $1.4 billion in 2021.

In India, the market will continue to grow at an impressive rate of 14.3%, yielding a revenue of $3.5 billion in 2027, the report stated.

The subscription video-on-demand (SVOD) sector, which has led the streaming boom over the past decade, will continue to account for the biggest proportion of global OTT revenue by the end of the forecast period. The global SVOD market will account for 62.5%, or $109.1 billion, of the global OTT market in 2027.

According to the report, in India as well, revenue growth will be driven by the competitive SVOD sector, which will expand at a CAGR of 13.0% to reach $2.6 billion in 2027.

Total global advertising-supported video-on-demand (AVOD) revenue will increase by 13.8% from $28.7 billion in 2022 to $54.8 billion in 2027.

In India as well, AVOD will grow at a higher rate than subscription service revenue. By 2027, AVOD, largely from local and regional broadcasters, will account for 22.3% of OTT revenue, while SVOD will have a 73.8% share. In 2022, SVOD accounted for 78.1% of the market revenue in India, while AVOD constituted 15% of the market revenue.

5G rollout presents a huge OTT opportunity in India's mobile-first market

OTT streaming is growing most rapidly in emerging pockets, where the combination of large historically underserved rural population and strong demand for local and sports content present major opportunities. The growth opportunity in India is high with the country’s biggest telecommunication operators forecasting that the nationwide rollout of 5G capability will be complete by the end of 2024, as per the report.

Smartphone ownership in India is set to grow by 125 million across the forecast period to 888 million, 62.52% of India’s population. Only China can boast a bigger market.

The main challenge for the market is the country’s low broadband penetration, at just 10.8% in 2022 and predicted to expand to only 14% in 2027. Investment in improved broadband infrastructure will unlock a vast market for OTT players.

Regional language content can secure wins for OTT players

According to the report, in an overcrowded and competitive market, OTT operators who focus on fresh and original programming are most likely to win customers. Hindi language original content played a major part for the largest OTT player in India. Regional content that caters to the country’s linguistic diversity will stand out.

The report also stated that there is enormous long-term potential for the OTT and connected TV (CTV) market in India, courtesy of the size and diversity of the country’s population. OTT video will continue to get its boost from regional play. 5G and broadband infrastructure, if improved further in the country, will open an even bigger market for OTT players.

Efforts made to digitalise the Indian economy will only hasten this segment’s growth. While the global growth rate for the OTT segment is 8.4%, India is way ahead with a CAGR of 14.32%.

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