Despite millions of users, OTT platforms struggle to make profits in India

The number of OTT users, especially after the pandemic, has soared. But unfortunately, this hasn't helped the platforms much as they reportedly continue to struggle for revenue.

According to Ormax Media, there are 353.2 million Indians using OTT platforms. Of them, 96 million are paid users. Deccan Herald recently reported that in some cases, companies have stated that their revenue in India is lower than other countries and many have been suffering losses. To add to their woes, analysts predict further losses.

Zee Entertainment has declared its company filings that the revenue and EBITDA loss of ZEE5 for Q1 FY22 was Rs 110 crore and Rs 200 crore respectively. The platform has reportedly witnessed only a small increase in its revenue by earning Rs 4 crore. The company had stated that this is due to the impact of COVID-19 on advertising revenues. Though the monthly active users (MAU) has doubled from 39.7 million in Q1 FY21 to 80.2 million in Q1 FY22, Emkay’s research estimates that the September’23E losses for both Zee5 and Sony Liv will be around Rs 1,020.4 crore and Rs 510.2 crore. Sony LIV had a total of 6.8 million paid subscribers until August this year and the platform is aiming at achieving 10 million paid subscribers by the end of this year.

The Hotstar service which was relaunched as Hotstar+Disney in India in April last year has been suffering losses ever since. Walt Disney has stated in its filings that its average monthly revenue per paid subscriber has reduced by about 30% after the launch of Disney+Hotstar. The company is said to have incurred losses of Rs 362 crore in the FY20, despite being India's largest streaming platform with 300 million subscribers mainly for its sports and regional content.

A recent Statista research shows that the average revenue per user is likely to be flat in the pay-per-view segment, advertising, and video downloads. It further states that the average pay per view revenue will probably increase from $2.84 to $3.44.

Netflix India, on the other hand, reportedly earned a revenue of Rs 924 crore in the FY20 and made a marginal profit of Rs 9 crore in the country and a whopping $2.8 billion globally.