MANGALURU: Data consumption in India will grow from the level of 71,67,103 million MB in 2017 to 10,96,58,793 million MB in 2022 growing at a compound annual growth rate (CAGR) of about 72.6%, according to an ASSOCHAM-PwC joint study.

With lower than ever data tariffs and increasing number of smartphone penetration in the country, which is around 40% as of 2017, it is safe to assume that the Video on Demand (VoD) market will be a significant beneficiary of these developments. Internet consumption is clearly on the rise in India. While the average Indian used to spend more on voice services than on mobile data services until 2013, the majority of an average mobile bill is now spent on data.

According to the report, the average monthly spend on voice services in 2013 was Rs 214 compared to Rs 173 spent on data. In 2016, the spend on voice fell to Rs 124, while data spends rose to Rs 225. Video streaming constitutes roughly 65–75% of the traffic according to the Nokia Mobile Broadband Index 2018.

While Internet penetration is increasing in the country, with mobile Internet penetration set to reach 56.7% in 2022 from a mere 30.2% in 2017, connectivity and consistency in speed issues need to be addressed, noted ASSOCHAM-PwC joint study on ‘Video on Demand: Entertainment reimagined’.

Video consumption is heavily reliant on quality/Internet connectivity. Therefore, there is a requirement for considerable investment in Internet infrastructure in the country to maintain consistent high-speed connections.

In a country where approximately 65% to 70% of the population resides in rural areas, no service meant for the masses can afford to ignore this market. Internet connectivity and speed issues are significant in rural areas as against urban areas. It is important for OTT players to cater to the rural market if they wish to stay relevant. Thus, apps like YouTube , which support low Internet connectivity, will be able to penetrate faster into rural areas, as per the joint study.

Another important factor for the VoD industry is the availability of devices that are compatible with online video viewing. A large volume of consumption occurs on smartphones. As of 2017, the number of smartphones in the country stood at 468 million. This is expected to grow at a CAGR of 12.9% to reach 859 million smartphones in 2022.

At the same time, non-smartphone ownership in India will decrease from 701 million in 2017 to 504 million in 2022 at a CAGR of -6.4%.

As more and more people opt for smartphones, it is evident that data consumption will be on the rise, which will eventually lead to an increasing number of hours spent on mobile devices for viewing content online.

Tablets are another promising device for the VoD industry. However, India has just about 5.3% penetration as of 2017, and this is expected to go up to just about 10% in 2022. The low penetration is definitely a missed opportunity for players as tablets offer fairly larger screens which are better for consuming HD content as compared to smartphones.

While the Indian video OTT market is at a fairly nascent stage, the video OTT market globally has entered into the growth phase of the market life cycle. With a CAGR of 22.6% during the period of 2017–2022, the Indian video OTT market is poised to outperform the global video OTT market, which is pegged to have a CAGR of 10.1% during the same period. Also, by 2022, the Indian video OTT market will be amongst the top 10 markets globally with a market size of $823 million (Rs 53,630 million).

Further, a comprehensive policy embracing learnings from other markets globally would help in building a stable platform for OTT service providers to grow. In this digital age, an upgrade to the IP laws along with strict implementation is needed more than ever before.

Clarifications under IT and taxation laws would also go a long way in providing certainty. Rapid convergence in the entertainment and media industry has led to consolidation of companies which operate in different segments of the industry. In fact, consolidation is not just confined to the entertainment and media industry— with telecom players also increasingly showing interest in investing in media businesses.

OTT services are one such segment which has recently managed to garner a huge amount of interest from various players within the industry as well as outside of it.

Five fundamental drivers of change have ensured that segments such as VoD will continue to flourish in the long run. With ongoing investments in technology and broadband, consumers are promised ubiquitous connectivity. Low data tariffs and increasing smartphone penetration have ensured that consumers and their devices are always connected and on.

Mobile devices are becoming the consumer’s preferred choice to consume content. This has made it crucial for content creators and distributors to tailor their content and services for the mobile consumer. Diversifying revenue streams is one of the most essential aspects of survival in the increasingly competitive entertainment and media space. Many businesses are seeing OTT services as a reliable investment option, as they realise the power of digital viewing.

As a result, there has been a value shift to platforms. Social media and technology platforms, instead of content creators and packagers, have emerged as the primary beneficiaries of the increase in user time and spending. Another major aspect in the journey of OTT players would be the ability to personalise experiences. Emerging technologies would help companies create unique experiences that add value to the services

