OTT video content to fuel 50% of total revenue growth for India’s video market

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.

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.

“A lot of people were working on a lot of things, and even the focus on storytelling was getting diluted. But days of throwing money at shows are over. We don’t want to do too many shows, but the ones we do, we want to do well,” Saugata Mukherjee, content head, of SonyLIV had said in a recent interview.

Challenges

India faces significant hurdles in content production, including bottlenecks in physical infrastructure and a shortage of skilled technical talent. The concentration of content production in metropolitan areas strains existing facilities, which struggle to meet the demands of the expanding media and OTT sectors. 

Additionally, piracy remains a concern, with illicit streaming platforms increasingly dominating over traditional peer-to-peer file sharing.

The rise of video streaming has had a substantial impact on related industries. For telcos, video content drives over 70% of data traffic. The streaming boom has led to the release of more than 1,500 original titles between 2016 and 2023, generating approximately 174,000 jobs. The industry is expected to create 280,000 new positions by 2028, potentially exceeding 330,000 jobs as demand for specialized skills in VFX, animation, subtitling, and dubbing grows, the report said.

Overall, the MPA report underscores the significant role of streaming VoD in shaping India’s video market and highlights both the opportunities and challenges that lie ahead.