India and Over the Top (OTT) Video Services – An overview
India is a fast growing economy where digital channels are growing constantly both in volume and strength. However, the pace of change can be much faster, since for a country which boasts of a large, educated and young population with increasing income levels, any major technology should quickly achieve mainstream adoption. Sad but ground reality tells a different story. India’s online ecosystem remains devoid of needed infrastructure, broadband is in a sorry state (avg speed less than 2 mbps), internet penetration remains low (less than 16%), online commerce is still nascent and regulatory delays are the order of day.
Indian Over the Top Connectivity Landscape (Source : TRAI, IMRB, Comscore, Akamai) – Mar 2014
|Category||Numbers||Ranking / Position|
|Indian Population||~ 1280 Million||2nd Largest in world|
|Mobile subscribers||~ 933 Million||2nd Largest in the world|
|Internet User Base||~ 230 Million||Expected to soon become 2nd largest|
|Mobile internet users||~ 145 Million|
|Broadband Users ( >512 kbps)||~ 60 million||Wireless - 46 m, Wireline 14m|
|Average Broadband speed||1.4 Mbps||123rd ranking in the world|
|Internet Penetration||~ 16%|
|Mobile Teledensity||75.23 %||Wireless 72.94%, Wireline -2.3%|
Led by convergence of broadcast and broadband channels, today consumers are witnessing an unprecedented pace of change in ways of consuming video content. Online channels have removed time, location and device barriers with convenience of on-demand, any-where and any-device viewing. But as major economies of the world embrace new media, India remains relatively untouched in the expanding universe of paid over the top (OTT) video services. India’s global ranking at 123rd position with average internet connection speed of less than 1.5 mbps, exposes large deficits in key infrastructure. An early upgrade to minimum of 4mbps (considered broadband grade by global standards) can help accelerate growth.
India vs. Global in Online Video
Internet, which came from humble origins of research labs was never created for servicing video, but the fact remains that video claims lion’s share of all web traffic. A recent report from Cisco predicts 70% of world’s mobile internet traffic will be comprised of video by 2017 . Rapid growth of pure-play OTT and online video services from Pay TV operators have enabled non-traditional TV customers to subscribe for premium video at a much lower cost with minimum commitment. Online video services which began with movie catalogs are evolving into balanced bouquets of linear and live TV, general entertainment, original programming and revered sports entertainment. Ericsson’s “new Media Vision 2020“ predicts Linear, Live and on-demand consumption of TV reaching parity by 2020. In India too, video over IP is growing and internet traffic growth is fastest, although low in absolute numbers in comparison to global peers. Cisco VNI report predicts India’s IP video traffic reaching 1.8 Exabytes per month in 2017, up from 173 Petabytes in 2012 with IP video constituting 66% of all IP traffic in 2017, up from 38% in 2012.
Indian Media & Entertainment Industry and OTT Landscape
India’s M&E sector is growing rapidly with overall revenues expected to exceed 17 billion USD by 2017. But unlike developed countries where Online services have decimated print and garnered significant share, online services remain small in India. While there is no equivalent of Hulu, Netflix, BBC iPlayer or alike, Indian online video remains largely driven by YouTube and popular social networking sites. In recent years, India has witnessed emergence of several niche players like Spuul, ErosNow, Bigflix, BoxTV etc. which are trying to gain credible subscriber base. These players have key content offerings in Bollywood movies, regional content and broadcasted TV shows with little or nil live and sports content. India with its uniqueness needs different models and greater innovation, ideas like Bharti Airtel’s “One Rupee plan for mobile videos” may work wonders. Priced at 1 Indian Rupee (less than 2 US cents) any prepaid user can dial a short code to gain access to Airtel’s video portal and play video clips. Some other interesting facts around growth of sector include
- India has approx. 25 million 3G connections in Apr 2014 averaging data usage of 1 GB per month representing second largest mobile broadband market.
- Cisco Visual Networking Index (VNI) predicts video comprises 15% of all Indian mobile data traffic at the end of 2011 with Cisco projecting that the proportion of data taken up by video would increase to 40% by 2016
- Increasing numbers of consumers viewing full-length movies and TV shows on internet daily.
- One of the biggest internet user base in the world, and the largest in terms of incremental growth
- Strategy Analytics forecast that the Asia Pacific market, driven by India and China, will account for 42% of all connected TV sales worldwide in 2016. Connected TVs and Wi-fi dongle are expected to reduce cost barriers for higher consumer adoption.
- Informa Telecoms and Media estimate that smart TV penetration in India will reach 14% by the end of 2016.
- According to a study from Vuclip, mobile video sharing in India remains high at 65% as compared to 53% globally.
- India which remains a cricket frenzy nation is witnessing massive interest with free live streaming of IPL 7 matches on GoCricket
Recent Regulatory Initiatives
- Telecom Regulatory Authority of India (TRAI) recently revised minimum broadband download speed to 512 kbps from 256kbps
- TRAI is planning to float a discussion paper on the Over the Top (OTT) services such as WhatsApp and Viber to understand trends and gauge impact of services on the industry.
- TRAI is working to mandate ‘minimum download speed’ for the wireless data services. Today, there is no binding regulation on telecom operators to deliver wireless service at a particular minimum speed causing widespread variance and confusion.
What is your Perspective?
Indian market is highly price sensitive, lacks infrastructure and traditional TV services are well accepted which make growth for OTT video providers an uphill task. But there is hope, India has bright future for online video services driven by growth of connected devices, large internet enabled mobile user-base, increasing internet penetration and growing consumer appetite for on-demand content services. What are your thoughts?
- Is an average Indian consumer with good broadband connection ( min 4mbps) willing to pay to watch a movie online ?
- Will launch of Reliance Jio 4G service at an affordable price change India’s connectivity landscape? A Déjà vu movement similar to pan-india CDMA technology launch in 2003.
- What impact does mandating minimum download speeds for wireless data services on 2G and 3G have on consumers and service providers? We need to remember that for a country like India, for a large majority of internet connected population, mobile is the first and only screen.
- Given low cost of cable subscription (d2h) in India, can OTT video players put a compelling cost benefit proposition for mass adoption?