June 2018



According to an EY report, Digital subscription revenue in India has grown by 50%, taking it to ₹ 390 crore in 2017 from ₹ 260 crore in 2016.

This could increase to ₹ 2,000 crore by 2020.

Video is a big part of digital subscription revenues. 250 million users streamed video online in 2017 and about 500 million users will be streaming by 2020, according to the same report.


There are 2 revenue models to deliver Video on Demand (VoD)

Subscription Video on Demand (SVoD) requires the consumer to pay a regular subscription to sustain the service. This is similar to a Pay TV channel.

Ad-supported Video on Demand (AVoD) obtains its revenues from advertisements included in the content. This is similar to a Free-To-Air (FTA) channel.


Indian consumers, atleast in the initial years have rejected SVOD. and Sony's LIV Sports were among the first SVOD platforms in India. Launched in 2014, they offered live sports content. Both shut their SVOD operations.

Star launched Hotstar in February, 2015 and Liv Sports merged with Sony LIV.

Hotstar is currently India's largest OTT platform, but 90% of its users view only free content.

"I would say India is still far away from where it should be. We are still addicted to the free model as a country. While subscription numbers have been rising, there are over 30 OTT players competing against each other, and the number of free or AVoD (ad-supported videoon- demand) platforms, even though some of them have subscription plans, inhibit the paid model," says Jehil Thakkar, Partner, Deloitte India.


The majority of Indian audiences stay with free or ad-supported VoD.

Even for HotStar - India's largest OTT platform, only 2-3% of the total subscriber base actually pays for the service. Most are happy with the free content.


Indians are among the top mobile downloaders in the world for Netflix content. "Download a big hit in India. India is clearly a nation of commute streamers, with Netflix members kicking off their binge while on the road. According to our survey, Indians are the second-highest public bingers in the world (88%), just behind Mexico (89%)," a Netflix spokesperson told the press.

Netflix is a Pay only premium service. It offers a 1-month free trial to new subscribers. Reportedly, only 6% of Netflix viewers pay for the service. Most simply sample it free for 30 days and leave!

Amazon Video is a Pay Service, but only on paper. Amazon Video is currently offered free in India with the Amazon Prime Shopping membership (₹ 999 for 12 months).


As the Indian OTT market matures, consumers are slowly loosening their purse strings.

They are also being driven to SVoD, because Pay TV channels put out repeat content for years.

This probably led Netflix chief content officer Ted Sarandos to say "There is no real great local television in India. It is a television starved market."


In 2017, Ekta Kapoor's Balaji Telefilms launched ALTBalaji with a wide portfolio of original content. "Our observation so far is, if the consumer is given good quality content, they will pay for it. We have more than 1.5 million paying subscribers," claims Nachiket Pantvaidya, CEO ALTBalaji and group COO, Balaji Telefilms.


The SVoD phenomenon has penetrated to regional markets as well. Bengali film production and distribution company Shree Venkatesh Films (SVF) launched a Bangla VoD platform Hoichoi in September, 2017. "To our surprise, 60% of the streaming happens on laptops and computers while we all thought it would be mobile first," says Vishnu Mohta, cofounder, Hoichoi. About 55% of its viewers are returning subscribers while 45% are new users.

On an average a viewer spends about 35 minutes per session on the platform. While Kolkata is the top city for Hoichoi, surprisingly Bengaluru and Delhi trump other West Bengal cities, indicating that Bengalis living away from their home state also find such platforms useful.


While VoD platforms would like to see Indian subscribers pay for content, this is not happening at the pace expected.

An Indian survey conducted by YouGuv and Brightcove has found that only 27.1% of respondents are willing to pay a higher subscription fee. A miniscule 18.5% of them prefer to pay a higher subscription to enjoy seamless experience without any advertisements.

For now, the big players are maintaining deep pockets to seduce OTT viewers with free content, while nudging them to move up to paid, premium content. n