As offline entertainment shut down due to the pandemic, OTT platforms have witnessed a 35 per cent growth with 31 million users in February 2021, up from 23 million in April 2020. With people stuck at home, OTT platforms started releasing new and original content online to cater to the rising demand.
Subscriptions per user has gone up by 8 per cent and subscription revenue has shot up by 42 per cent in this period, from $49 million to $68 million. However, ARPU (average revenue per user) remained flat, reveals a RedSeer report.
The shift to online, the rise in smart TV users and the launch of Hotstar + Disney, Voot Select and multiple regional SVoD (subscription video on demand) platforms such as HoiChoi, SunNXT have contributed to the rise in the number of unique paid users. Bundling options provided by telecom firms, for instance Airtel offers free Prime Video and Hotstar subscriptions to post paid users; Broadband bundling – free Prime Video and Netflix subscriptions for JioFibre users; higher discounts and offers leading to more users opting for annual subscription packs, are some of the other reasons for the significant jump in paid users.
Compared to April 2020, there has been a drop of 6 per cent in February 2021, when users spent 188 billion minutes on OTT platforms. The drop is mostly because engagement dipped in February as users started moving out with normalcy returning and their favourite TV soaps starting again. However, the report says that with more releases in the pipeline along with product improvement, user engagement is likely to increase in future.
Of the 188 billion minutes spent on OTT, users spent the highest – 69 billion minutes on daily soaps followed by movies with 31 billion minutes and then originals produced by the OTT platforms. Voot dominates the daily soaps genre and Hotstar dominates the movies genre.
On why ARPU remained flat despite the rise in paid users, Nikhil Dalal, Senior Consultant, RedSeer Consulting said “Cheaper mobile and mobile + packs by Netflix, Amazon, Zee5 and Hotstar trying cheaper sachet packs and regional packs. Increasing contribution of smaller platforms like Alt Balaji, Eros Now etc that charge ₹100–₹150 for 3 months and Rs ₹400–₹500 for a year. And bundling along with more offers around New Year and festival season, for example Zee5 offered 50 per cent off on yearly packs during December 2020 and February 2021, contributed to flat ARPU.” The Hindu BusinessLine