AVOD will continue to rule CTV: Ashish Pherwani

Connected TV has experienced a remarkable growth in recent years and with evolving television viewing habits, its future is only brighter.

Throwing light on the growth of this emerging segment in the television landscape, Ashish Pherwani, Media and Entertainment Lead, EY, said that by 2030, Connected TV or CTV will reach 70 million homes, from the current 20 million, and AVOD will continue to rule on it.

Delivering his keynote session on ‘Navigating the Future of CTV in India’, at the e4m CTV Conference held in Mumbai, Pherwani said that in the next seven years, the Indian large screen video consumption market will break up into three large and very important segments- Pay TV, Free TV and CTV.

Noting that the Pay TV segment is 118 million homes today, which includes pirated homes, he said that the number will come down to 83 million by 2030.

“Free TV in this country will keep growing and go up to 67 million from the current 45 million. It is already the largest platform on earth for TV distribution and I cannot see it going any other way unless of course the regulations change,” he said.

About CTV, he said, there are presently 20 million homes going up to 70 million and noted that the average time per month for CTV was 40 hours, which is just about a little more than an hour a day.

“A lot of this is currently because in many homes, the CTV is still in the bedroom, and that's a nighttime viewing perhaps. But when you look at the 62-minute average time per day per user, that's a very healthy number.

“Actually, the time spent on AVOD is slightly higher than this. The time spent on SVOD is slightly lower than this. So that still shows that despite having a CTV and a good broadband connection, AVOD continues to rule,” Pherwani said.

The number one platform by far is YouTube on CTV as well, he said, adding that the time spent on AVOD is twice the time spent on SVOD.

“So, it's still a tough battle that we're going to fight from an OTT point of view on the CTV,” Pherwani said.

According to the FICCI-EY report, “Actually, the time spent on AVOD is slightly higher than this. The time spent on SVOD is slightly lower than this. So that still shows that despite having a CTV and a good broadband connection, AVOD continues to rule.

He also said that in three years, 30% of the content on CTV will not be from a large broadcaster.

“Our estimates show that broadcaster content which is now almost 100% on large screens in the home in a linear TV environment will come down to only about 70% in about 3 years from now. So, 30% of the content that will be consumed on connected TVs within a few years will not be from the larger broadcasters and that is going to be a massive change,” he said.

Talking about targeting customers from an advertising perspective, the media analyst said that a lot more innovation was needed for it.

“Unlike mobile, it's actually going to be more difficult to target customers from an advertising perspective on smart TV. We need to see a lot more innovation in how large data sets merge before you can actually treat the large screen and connected TV as a digital product,” he said.

Sharing the data during his presentation, Pherwani said that as per Telecom Regulatory Authority of India (TRAI), there are 38 million wired broadband homes in India as of now.

Out of that there are BSNL homes as well which are still 256 kbps for 8 million.

According to Pherwani, on the CTV platform, it's still two subscriptions on average that are being paid for.

“So even though the screens are bigger and more expensive and so on, they're still only paying for two. One of the reasons for this could be just the sheer fatigue of managing so many subscriptions. And therefore, I feel that bundling will play a very good role going forward,” he said.

According to Pherwani, 93% of TV shipments were of smart TVs last year and Samsung TV specifically, “had a 37% growth last year”.

“But the interesting thing about that growth is that the growth is driven by larger screen TVs and not the smaller screen TVs. So the rich people are clearly shifting to, you know, the CTV environment,” he said.

On average, five apps were being used on the TV, he said, adding that surprisingly, three apps were AVOD and two were SVOD.

“So in the FICCI report that we released, we showed that there are about 43 million Indian households who actually pay for one or more subscriptions. There's a total of 97 million paid subscriptions in India today, which is an average of 2.2. It's interesting to see that even on the CTV platform, it's still two subscriptions on average that are being paid for.

“Even though the screens are bigger and more expensive and so on, they're still only paying for two. One of the reasons for this could be just the sheer fatigue of managing so many subscriptions. Therefore, I feel that bundling will play a very good role going forward,” he said.