India’s OTT video market to touch $7 billion by 2027

India’s streaming video market is in its second growth phase with a revenue of $3 billion in 2022 expected to more than double to almost $7 billion by 2027, according to a new report by MPA (Media Partners Asia).

Competitive intensity is set to grow between global giants and newly capitalized local players. Telco reach remains critical in the market along with AVoD (advertising video-on-demand) business models and low-ARPU (average revenue per user), high volume SVoD (subscription video-on-demand) services.

Total Asia Pacific online video industry revenue will grow by 16% on-year in 2022 to reach $49.2 billion, according to the new report Asia Pacific Online Video & Broadband Distribution 2022, published by MPA. SVoD will contribute 50%, UGC (user-generated) AVoD 37% and premium AVoD 13%. The industry is set to grow at an 8% CAGR to reach $72.7 billion in 2027, with SVoD:AVoD ratios remaining stable. Excluding China, the APAC online video industry will grow 24% in 2022 to reach $25.6 billion in revenue with SVoD contributing 47%, UGC AVoD 43% and premium AVoD 10%. Excluding China APAC online video revenues are forecast to grow at a CAGR of 11% to $42.8 billion by 2027, with SVoD at 44%, UGC AVoD 43% and premium AVoD 13%.

In India, new local players with deep pockets are gearing up to grab market share, led by a newly recapitalized Viacom18, backed by Reliance, Bodhi Tree and Paramount while Zee and Sony are merging to create a strong television and online video business, the report said. Going forward, Viacom18’s new streaming platform, leveraging IPL cricket and local entertainment, will emerge as an important player in the AVoD space in particular, grabbing material share over time as it leverages massive reach via Jio mobile and connected TV.

China, APAC’s largest market, will generate $11.2 billion in revenue in 2022, representing 48% of the APAC online video revenue pie. Indonesia is Southeast Asia’s largest online video market, generating close to $1 billion in revenue in 2022 with advertising contributing 62% and subscription 38%. The premium video sector (SVoD and premium advertising inventory) has emerged as a material revenue generator. Five major players—Netflix, Vidio, Disney+ Hotstar, MNC Digital and Viu – will account for 75% of premium video revenue in 2022.