The days of families huddling in front of the telly may be numbered. As cord-cutting , the trend of dropping cable or DTH for online streaming services, catches on, an increasing number of Indians is turning to their smartphones and smart TVs to watch their favourite shows, movies and live sports.

“I want to watch what I want, when I want and as much as I want,” says media executive Sonakshi Awasthi of Delhi who ended her satellite TV subscription eight months ago. “Between the two streaming services I pay for, I get everything I want.”

Bhavik Sreenath, a student and gaming enthusiast from Bengaluru, watches shows and movies through his Xbox . Most of his friends do the same and don’t own DTH or cable TV connections. “After watching the content on streaming services, one wouldn’t really want to watch serials on TV,” he says.

People like Awasthi and Sreenath may currently fall into a niche category – young and urban consumers – but the exodus is big enough for DTH operators to sit up and take notice. India’s largest DTH operator, Dish TV , called it “the elephant in the room” at an investor presentation.

“There have been a few disconnections in metros due to the advent of OTT players such as Netflix, Hotstar and Amazon Prime video,” said Anil Dua, group CEO of Dish TV. “However, it is not a source of worry for DTH players as our net additions are pretty high. We also plan to launch our own OTT app in view of the trend.”

OTT (over the top) refers to content providers that distribute streaming media as a standalone product directly to consumers over the internet. The entry of US-headquartered Netflix two years ago has led to a boom in India’s OTT market, with several other players – including Hotstar and Amazon Prime –investing big money to lure new subscribers. Recently, Times Group, the publisher of this newspaper, acquired South Korea-based MX Player for Rs 1,000 crore to enter the OTT market. MX will be launching its OTT service in October, with over 50,000 hours of content and more than 20 originals.

Not surprising since India will be among the top ten global OTT video markets by 2022, worth Rs 5,595 crore, says audit and consultancy firm PwC. Growing at a CAGR of around 23%, the domestic OTT market is currently pegged at Rs 2,019 crore. In the next four years, around 80% of that market will generate revenue from paid subscriptions.

“There are 500 million smartphones which are now becoming the primary screen for entertainment,” says Karan Bedi, CEO of MX Player. “And they have the ability to give access to huge libraries and types of content well beyond the broadcast ecosystem.”

Hotstar, Star TV’s digital entertainment platform, revealed in a recent report that online video consumption grew five times in the last one year with 96% of all usage focused on long-form video. “This marks an inflection point in India where early years of online video were characterised by short-form consumption by users deeply fearful of data charges,” the report said.

Industry experts attribute the growth of the market to dipping data costs. Average monthly data usage in the country grew 15 times to 4GB per person over the last three years while telecom service provider Bharti Airtel revealed that the number of customers consuming over 100 GB of data every month on its broadband network more than doubled over the past year. The average consumption of data, too, grew by 100% in the same period, a Bharti Airtel spokesperson added, signalling that more people in India are streaming content directly on their TVs.

Sales of big screen smart TVs have also witnessed a growth, fuelled by increased consumption of OTT content and a fall in prices. While smart devices account for 40% of LG’s total TV sales in India, Sony said the demand for TVs in 55inch and above category is growing at 50% compared with 10% growth for total TV sales.

To cash in on the trend, global OTT players are pushing the boundaries of technology that helps users stream video seamlessly despite patchy networks in India. Amazon, for instance, uses High Efficiency Video Coding (HEVC) for its FireTV Stick, which is more capable of encoding video than the current industry standard, H264, and requires less bandwidth to deliver high-quality video streams.

However, in the end, it all boils down to cost, says CVL Srinivas, country manager of WPP, a multinational advertising firm. “Cable TV is extremely cheap and some OTT players are still prohibitively expensive for a large part of the Indian population. If you can launch a service with quality content at a very cheap rate, you may be able to help more people cut the cord faster,” he feels.

