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Paid OTT subscriptions up by nearly 60%: CII-BCG report

The Covid-19 pandemic has accelerated the adoption of Subscription video-on-demand (SVoD) services as consumers spent more time at home leading to a surge in both smartphones and TV consumption.

According to estimates by a CII-BCG report, the number of paid OTT subscriptions (also known as SVOD) surged to about 100-125 million in 2020, up nearly 55-60 per cent from 49 million subscription in 2018. The report noted that this growth was driven by out-of-home spending shifting to in-home coupled with introduction of low-ticket size plans by OTT players and enhanced ease of payments.

Growth in small towns
While global OTT players are now offering Indian specific price points, pricing innovations by the players has also helped make the SVOD proposition stronger. This also helped OTT platforms to increase their presence in tier 2-tier 4 towns and the growth rate of new users in tier-2, 3, 4 regions is estimated to be 1.5 times of that of the growth rate in metro and tier 1 during this pandemic year, the report added.

At the same time, TV subscriptions grew marginally by about 3 per cent largely driven by growth in DTH subscribers. With the total Indian TV households pegged at 207 million, DTH segment’s share stood at 36 per cent in 2020 compared to 35 per cent last year.

“DTH subscribers surged initially during lockdown but over time consumers started optimising channel subscriptions due to limited fresh content. Subscribers expected to increase by 6-7 per cent as fresh content has returned to TV and cable TV subscribers move to DTH,” the report stated.

Stating that the growth in India’s media and entertainment sector continues to be multi-modal, with all categories including television (6.7 per cent) and print (0.3 per cent) showing increased consumption during 2018-20 but digital video emerged as the fastest growing medium at 14.5 per cent CAGR.

Ad revenues decline
However, Kanchan Samtani, Managing Director & Partner, Boston Consulting Group India, pointed out that advertising revenues saw sharp decline as a result of the pandemic but added that recent developments such as the resumption of operations and recovery of ad campaigns has resulted in optimism in the industry.

“Advertising revenues are expected to be about 16 per cent lower than in 2019, with ads on all media except digital expected to experience double digit rates of decline in 2020. The recovery has been differential across sectors, compounded by a need to show higher ROI and control over advertising campaigns. This has led to higher allocations to digital media, which is expected to reach a share of about 15 per cent in 2020, ahead of most pre-Covid projections,” Samtani said. The Hindu BusinessLine

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