'Online video ad+subscription revenue in India reached $1.92 billion in 2021'

The Indian online video market touched revenues of $1.92 billion in 2021, according to a report titled 'India: Online Video Trends' by London-based Omdia. The figure includes online video ad revenue of $1.2 billion and subscription video revenue of $0.9 billion.

Clocking an impressive growth, OTT video subscription revenue in India grew from $500 million in 2020, to reach around $900 million in 2021. Total online video subscription numbers reached 73 million at the end of 2021, increasing from 53 million at the end of 2020, which represents 37% YoY growth.

The report stated that the telecom operators were the preferred partners for OTT players with two out of three bundling deals involving telcos. Pay-TV operators followed with one in four deals (24%). Integration of the OTT service into the partner’s device (set-top box, streaming stick) formed 40% of the partnerships while direct-carrier billing formed 35% and content aggregation 24%.

Disney+ Hotstar, Amazon Prime Video, and Netflix were the top three players with a collective market share of almost 70%. Disney+ Hotstar had a 50% market share followed by Amazon Prime Video (9%) and Netflix (8%).

Closely following Amazon Prime Video and Netflix were ZEE5 and SonyLIV with 8% and 6% shares of the subscription market respectively. The report also notes that Eros Now notched a 6% market share followed by ALTBalaji at 4%. Discovery+ and Voot Select were reported to have a market share of 2% each.

Online advertising market

Omdia research indicates that in 2021 India generated $1.2 billion in online video advertising revenue. The market is dominated by Google and Meta, which control 62% of video ad revenue collectively, followed by broadcast groups at 23%. Other players represent 15% of revenue; meanwhile, Amazon’s share is meagre and mainly comes from its newly launched ad-supported video platform miniTV.

In 2021, Star India’s Disney+ Hotstar was the largest broadcast group video streaming platform by advertising revenue, with an estimated $120 million video ad revenue, followed by SonyLIV, ZEE5, and VOOT, Omdia research indicates.

Omdia believes AVOD will remain an important proposition for broadcasters as many consumers prefer free services rather than paying for premium content, especially in markets such as India where cost is a crucial factor. The report also highlighted that Indian OTT platforms are investing in ad tech to grow their online advertising business.

Revising its earlier estimate for the Indian market, Omdia has projected that the online advertising market will hit $2.4 billion in revenue in 2025. In the 2021 version of its India video report, Omdia had projected that video advertising would reach $2 billion in 2025. The Indian market is expected to hit this number a year earlier in 2024 due to the restatement of historical online advertising revenue data by Omdia in 4Q21.

Content spends

As reported earlier, Omdia estimates that close to $0.5 billion were invested in Indian original content in 2021. Investment has been growing significantly since 2017, with only 2020 experiencing a decline due to COVID, it added.

"The lockdowns in 2Q21 had a much smaller impact than in 2020 because the industry was much better prepared; productions shifted to areas with no restrictions, such as Goa or even to neighboring countries such as Bangladesh," Omdia said.

The report stated that the other reasons for the big growth in spending in 2021, relative to 2020, were the higher talent costs, as many Bollywood stars turned to OTT as a result of the closure of cinemas; and the top Indian media houses, such as Sony, Viacom 18, and Disney-owned STAR, revamping their content strategy, focusing on originals.