Online video consumption has grown exponentially in India over the last few years, with a surge in both users and usage bolstered by prolonged stay-at-home periods, especially during the pandemic.
India’s online video user base has increased to over 350 million people, growing 24 per cent over 2018 to 2020, nearly twice as fast as markets such as China and Indonesia, a report titled “Online Videos in India— The Long and Short of It”, released by Bain & Company.
Usage per active user has also grown significantly with the the daily time spent per active user on online videos increasing simultaneously by 60 per cent to 70 per cent over 2018–20. A majority of time spent by users on smartphones is on entertainment, primarily watching videos.
“India has a large digital community, with about 640 million Internet users and 550 million smartphone users, and is rapidly growing and spending more time online. Smartphone users spend about 4.8 hours on their devices daily, of which one hour on average is spent consuming videos. Despite this rapid boom, there exists massive headroom for growth — online video user penetration in India is nearly 60 per cent of Internet users, compared with more than 90 per cent in China,” said Arpan Sheth, partner and global leader of Bain & Company’s Vector Solutions Group.
The report categorises digital video entertainment into short-form videos (SFV), which are between 15 seconds and 2 minutes, and long-form videos (LFV), which are more than two minutes long.
Within SFV and LFV segments, content can be further segregated based on the creator, divided into user generated vs. professional and how it is delivered (pre-recorded vs. livestreaming).
“The lines across these segments are increasingly blurring, as platforms expand their offerings to capture a greater share of consumer time in catering to broader consumer needs and occasions to enhance stickiness,” the report further added.
In terms of long-form video platforms, LFVs are viewed by 350 million to 400 million users, almost twice as penetrated as SFV. The format has seen substantial growth, with users and usage increasing nearly 1.5 times from 2018 to 2020. Active users today spend over 2.5 hours per day on long-form content.
The growth has been driven by the pandemic led lockdowns. LFV is poised to grow from 600 million to 650 million users in India by 2025. This is owing to a steady increase in the Internet user base and access to cheaper, faster data due to the introduction of more affordable plans, including the advent of freemium models and a proliferation of content, as per the report.
This will be further accelerated by a strong push on regional and vernacular content. According to the report, 85 per cent of content viewed is non-English, and 30 per cent is in languages other than English or Hindi.
“The LFV market is significantly more mature and crowded than the SFV market. More than 50 LFV platforms (also referred to as ‘over-the-top’ [OTT] platforms) exist in India. This crowded landscape includes four broad archetypes of players vying for consumer time, including global giants (YouTube, Netflix, Amazon Prime Video, Disney+ Hotstar), platforms by television broadcasters (SonyLIV, ZEE5), specialist Indian platforms (MX Player, Eros Now), and aggregators (JioTV). Content drives differentiation, and it is possible for multiple platforms to co-exist in steady state, as seen in developed markets,” the report said.
These players have taken a varied approach in terms of monetisation models that reflect the platform’s core consumer in the income pyramid, such as subscription video on demand (SVOD), freemium, ads video on demand (AVOD), and transactional video on demand (TVOD).
Moving forward, six trends will shape the LFV space naely content explosion, value chain integration, hyper-personalisation, increased monetisation, gamification/social engagement and content moderation, the report said.
Platforms will look to build deeper libraries with increasing original and regional content. In terms of value chain integration OTT platforms will look into backward integration into content production while “forward integration by production houses may become more commonplace,” it said.
Content curation is also poised to become more sophisticated. For instance, nearly 70 per cent of YouTube watch time globally is already driven by recommendations. Platforms will also increase focus on monetisation as the industry matures. Players will explore social-led engagement to keep users hooked. They will look to invest in content protection tools to prevent piracy and moderate content to comply with regulation, the report further added.
The SFV market has taken off over the past two years in India, growing 3.5 times in user base and 12 times in total time spent by all users on SFV platforms. More than 200 million Indians watched SFVs at least once in 2020, with daily active users spending up to 45 minutes a day on these platforms.
“However, India’s short video user base has historically been largely men from Tier 2 and smaller towns, but this is evolving quickly, with the medium gaining traction in metros and amongst women,” the report said.
By 2025, three in four Internet users, or 600 million to 650 million Indians, will consume short-form videos, with active users spending upto 55 to 60 minutes per day, according to the report. ByteDance’s TikTok was among the first to scale its SFV platform in India, creating a massive base of creators. According to the report, the robust base of creators is key to attracting users. India has more than 50 million users who have created and posted at least one short video.
“Content creators are active on multiple platforms and are increasingly monetising their follower base through brand collaborations and commerce. All this is giving rise to a robust creator economy—an enabling ecosystem of players helping creators with content creation, monetisation, financing, and business management,” the report said,
Shyam Unnikrishnan, partner and a leader in Bain & Company’s Consumer Products, Retail, Strategy and Digital practices in India, said, “The SFV ecosystem which essentially comprises of users, creators and advertisers are key to driving economics for the platform. Brands are increasingly using short video platforms to reach their target customers. New monetisation models, such as video commerce, livestreaming, and in-app purchases, will become increasingly commonplace in the coming years. Players need to invest in developing an advanced, tech-enabled platform to link users, creators, and advertisers and deliver a seamless experience to all.” The Hindu BusinessLine