High-voltage drama in the world’s fastest-growing video-streaming market

The announcement that veteran actor Amitabh Bachchan’s film Gulabo Sitabo would be released on Amazon Prime Video in June made big waves in India’s entertainment industry. Never before in the country’s history had a movie with big names (or a big budget) gone the digital way, and theater owners feared it might encourage a trend of online-first releases.

Traditionally, big films first make it to India’s theaters and then eventually find their way onto video-streaming or over-the-top-streaming (OTT) platforms. But with cinemas indefinitely closed because of the pandemic, the movie was released online.

Theater owners pushed back against this move, and some even threatened “retributive measures.” Television channels haven’t been too happy with OTT platforms either, since many people flocked to them during the lockdown.

But their troubles had started long before Covid-19 came into the picture, with video-streaming platforms vying for a bigger size of the entertainment pie. The first victims of OTT’s bludgeoning popularity include WarnerMedia’s HBO and WB, both linear movie channels that are ceasing operations in India in mid-December.

And this was when OTT platforms were just warming up. It’s going to be a long run.

A recent report by PricewaterhouseCoopers (PwC) says India is currently the world’s fastest-growing video-streaming market, and it’s set to become the sixth largest by 2024. Subscription video on demand (SVOD) will be the prime driver of revenue according to the report, increasing at a 30.7% CAGR from US$708 million in 2019 to US$2.7 billion in 2024. It will account for 93% of the total US$2.9 billion market by 2024.

The numbers are enticing. Only if things were as rosy for streaming platforms as they seem.

The competition is intense, with at least 40 odd players in the game. “We feel there is still headroom for growth,” says Rajib Basu, partner and leader for entertainment and media at PwC India.

Platforms like Singapore’s Hooq and Hong Kong’s Viu have shown that the going is far from easy: The former liquidated this March while the latter has bowed out of the India market.

“We have been resource-constrained in the most competitive OTT market in the world and ultimately, in this space, the ability to invest is going to make all the difference,” Vishal Maheshwari, Viu’s country head for India, said in a letter to the platform’s employees.

“India is a large potential market, but also complex and challenging. While consumers in India are just starting their OTT journeys, the level of hype and investments in the market [is] extremely high, with no current path to sustained monetization,” said Viu spokesperson Melissa Sheridan when the platform announced its exit.

Still, some, such as Tencent-backed MX Player, continue to trudge on, even reporting their highest monthly earnings for September. The video-streaming platform from Times Internet is also in the market to raise US$200 million.

MX Player, which has 138.5 million unique viewers, has witnessed a 7x increase in the time people spend on the platform, shares its chief executive officer Karan Bedi.

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