Decoding the next phase of OTT’s growth in India as digital renaissance continues

India’s streaming video on demand (VOD) industry has had a transformative power on the nation’s entertainment economy. As per a report by Media Partners Asia (MPA), premium online video-on-demand is set to fuel 50% of new revenue growth of India’s total video market. According to Statista, revenue in the OTT Video market is projected to reach $4.06 billion in 2024, while revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.43%, resulting in a projected market volume of $5.81 billion by 2029 in India.

A report by Ormax Media reveals that the Indian OTT audience universe is currently pegged at 547.3 million (or 54.73 crore) people. This translates to a penetration of 38.4%. The 13.8% growth in the universe vis-à-vis 2023 is entirely driven by the AVOD audience, which grew by 21%, while the SVOD segment witnessed a degrowth of 2%. Statista projects the number of users to 634.3 million by 2029, with user penetration expected to hit 42.2% by 2029, up from 34.1% in 2024.

As this digital renaissance unfolds, OTT platforms are not just catering to global tastes, but are also delving deep into the heart of regional storytelling, capturing the unique flavours of diverse cultures and languages. However, with great power comes great responsibility, and the rapid expansion of these platforms has brought with it a host of regulatory challenges, pricing dilemmas, and shifts in viewer behaviour.

In this two-part report, Adgully delves into the current state of the OTT industry in India, the growth trajectory that it is taking, regulatory issues, pricing strategies, evolving business models, viewership, and much more.

Regulatory Oversight: A Growing Challenge for OTT Platforms

As OTT platforms continue to flourish in India, they find themselves grappling with a new reality: increasing scrutiny from regulatory authorities. Unlike traditional media, which operates within a more rigid framework, OTT platforms enjoy a relatively liberal environment. In October 2024, the Supreme Court dismissed a Public Interest Litigation (PIL) calling for a regulatory board to oversee OTT and streaming platforms in India. The petition argued that these platforms lack the checks and balances that traditional media, like films and TV, are subject to.

However, this freedom is now under threat as the government deliberates on stricter regulations to address concerns about content censorship, misinformation, and the protection of minors. The challenge lies in ensuring consumer protection while maintaining creative freedom – a balancing act that is becoming increasingly complex.

The Landscape of Regulatory Challenges

Speaking to Adgully, AV Anoop, Film Producer and Managing Director of AVA Group of Companies, points out, “OTT platforms are currently facing several key regulatory challenges, particularly with respect to content regulations. They must navigate a myriad of laws, including censorship and age ratings.” He emphasizes the necessity of a standardized regulatory framework to enhance transparency and safeguard consumers.

Anand Pandit, a prominent producer, echoes this sentiment, stating, “The challenge for OTT platforms is to strike a balance between creative freedom and regulatory compliance. The arrival of OTT streamers has opened up numerous opportunities for storytelling. However, we must ensure that we can improve our content progressively. We should be respectful of each other's belief systems and steer clear of sensationalism and misinformation.” This highlights the industry’s desire for regulations that do not stifle creativity while still addressing public concerns.

Elaborating on the complications introduced by varying regulations across different states and international borders, Mayur Joshi, Associate Account Director, BC Web Wise, states, “OTT platforms in India are navigating a complex regulatory landscape. Content censorship, a perennial issue, has been exacerbated by the lack of uniform standards across digital spaces. The 2021 IT Rules, while aimed at addressing this, have raised concerns about potential curbs on artistic expression.”

The Necessity of Regulation

Implementing stricter oversight of OTT platforms is a contentious topic. Advocates argue that such regulation is necessary to protect consumers from harmful content and to maintain the integrity of information being disseminated.

Janaki Amrite, Associate Vice President, Pocket Aces, emphasizes this point, stating, “Strict regulation can help safeguard viewers from harmful or inappropriate content, ensuring that platforms adhere to community standards and ethical guidelines.”

Conversely, critics caution against the risks of overregulation. “While consumer protection is paramount, strict regulation or censorship will suppress freedom of speech and expression,” warns Amrite, adding, “Censorship can silence voices that are critical to societal norms, curbing creativity and the diversity of content.”

AV Anoop adds here, “Most of the content uploaded on OTT platforms undergoes strict scrutiny. There are dedicated sections for children’s content, and users can choose their preferences, which mitigates the need for heavy-handed regulations.”

Finding a Middle Ground

The debate surrounding the regulation of OTT platforms reflects broader societal concerns about consumer safety versus creative expression. As Anand Pandit points out, “Audiences are now accessing stories from all over the world, and they are mature enough to choose what resonates with them. Will the rules affect their freedom to choose? All this remains to be seen.”

Ultimately, the challenge for regulatory authorities will be to create a framework that fosters innovation while ensuring that content is appropriate and safe for all viewers. As the OTT landscape continues to evolve, so too must the regulations that govern it – striking a balance that allows for both creativity and responsibility in content delivery.

In this rapidly changing environment, it is clear that the dialogue surrounding regulatory oversight of OTT platforms is just beginning. The outcome of this debate will shape the future of content creation and consumption in India for years to come.

TV Viewing Vs OTT Binge-Watching

The rise of OTT platforms has introduced a dramatic shift from traditional TV to binge-watching, changing not only the way audiences consume content, but also how it is created and marketed. While traditional TV is defined by scheduled programming with episodes airing periodically, OTT platforms provide a flexible, on-demand experience, allowing viewers to watch entire seasons in one go.

Saurabh Srivastava, Chief Operating Officer - Digital Business, Shemaroo Entertainment, explains, “Binge-watching isn't entirely new –viewers have indulged in watching DVD collections of shows like ‘Friends’ or ‘Mad Men’. However, streaming platforms have revolutionized this behaviour by offering vast content libraries and the convenience of on-demand viewing. This has influenced not only how we consume content, but also how it is created and measured.” He adds, “Several factors enable binge-watching: serialized storylines that encourage viewers to keep watching, the ease of selection among vast content choices, and the convenience of sticking to a single storyline without distractions. While this abundance of options can be overwhelming, the ability to binge-watch simplifies the entertainment experience.”

Rajat Agrawal, COO, Ultra Media and Entertainment Group, emphasizes the adaptability of OTT content, saying, “Traditional TV is more about appointment viewing, where audiences tune in at a set time for a single episode. In contrast, OTT allows viewers the freedom to watch at their convenience, whether on desktops, laptops, mobiles, or TVs. This ability to control both timing and the choice of screen is a major factor driving binge-watching culture on OTT platforms.”

AV Anoop highlights how OTT platforms provide a seamless viewing experience. “OTT platforms offer flexible timing, allowing us to watch our favorite shows at our convenience. We can enjoy continuity by resuming whenever we wish, and the ad-free experience saves us both time and energy. Additionally, we can watch content from anywhere and select videos based on viewer ratings. Trending sections guide us to popular content, and language options provide a personalized experience,” he adds.

Tanush Handa, Manager - Public Policy, Ardent Co, a communication, research, and policy advisory, observes the fundamental differences in viewing behaviours, stating, “Traditional TV audiences follow a set timetable and rely on broadcasters for their content. OTT binge-watchers, however, have the flexibility to consume entire seasons on their own schedule. This leads to deeper engagement with content as viewers watch at their own pace without interruptions. The hook-driven storytelling common in OTT series is designed to keep audiences engaged across episodes, encouraging long viewing sessions. For marketers, this viewing pattern offers an opportunity to create content that builds strong bonds with audiences through prolonged engagement.”

Reflecting on how OTT has reshaped the storytelling landscape, Mayur Joshi of BC Web Wise says, “Traditional TV operates on a fixed schedule where each episode unfolds gradually. OTT, however, allows viewers to enjoy an immersive, on-demand experience that sidesteps the restrictions of scheduled programming. The practice of releasing entire seasons at once fosters widespread social media engagement and a sense of cultural urgency, driven by FOMO (Fear of Missing Out). This illustrates the changing dynamics of storytelling in the digital age, where binge-watching generates social conversations that extend beyond the screen.”

Pocket Aces’ Janaki Amrite highlights the changing demographics and factors behind binge-watching, stating, “The shift toward OTT is especially prominent among younger audiences, who prefer personalized and on-demand content over traditional TV’s scheduled programming. Factors like content variety, flexibility, and commercial-free experiences make binge-watching highly appealing. OTT platforms offer extensive content libraries, which attract viewers looking for variety and convenience. The social culture around binge-watching, fueled by online discussions, further encourages viewers to consume entire series at once.”

The shift from traditional TV to OTT binge-watching reflects evolving consumer preferences driven by the desire for accessibility, flexibility, and personalized viewing. While traditional TV remains popular, particularly for communal or family viewing, OTT platforms continue to shape the future of content consumption by catering to individual tastes, creating a more immersive, flexible, and interactive entertainment experience.

Subscription Policies and Pricing: The Consumer Impact

OTT platforms have witnessed significant shifts in pricing and subscription models recently, from introducing ad-supported tiers to bundling and pay-per-view options. The competitive marketplace has brought more choices to consumers, but frequent price hikes and changes in subscription policies can be frustrating for users. Platforms often justify these changes with rising production costs, the demand for high-quality programming, and the need to fund original content. However, balancing value with affordability remains a critical concern.

Evolving Business Models and Consumer Benefits

According to Saurabh Srivastava from Shemaroo Entertainment, OTT is still evolving, which explains the fluidity in pricing strategies. “OTT is a relatively new consumer product, and it is natural that pricing and propositions are evolving rapidly,” he says, adding, “Consumers have benefited from choices made available, as well as the pushing of boundaries in content and user experience.”

Srivastava notes that, unlike the TV industry, which relies on bundling, OTT platforms directly engage with consumers, thus navigating different value perceptions.

Consumer Affordability Concerns

Rajat Agrawal of Ultra Media and Entertainment Group points out that OTT pricing often starts low to attract users but can later become steep, making it less appealing compared to traditional TV services. “Initially, platforms attract customers with low monthly packages, but once users become accustomed to the service, the costs can rise significantly,” he says. For many users, comparing OTT prices with affordable DTH options highlights a growing concern: affordability in the long run.

Adapting to Consumer Expectations

AV Anoop observes that OTT platforms must navigate a delicate balance when introducing price changes. “OTT platforms are increasingly raising their subscription charges. This strategy, starting with low costs to attract users and subsequently increasing rates, can be seen as a challenge for long-term appeal, especially when the cumulative cost of multiple OTT subscriptions rivals traditional DTH expenses.”

For consumers, the cost comparison is becoming a decisive factor, making platforms vulnerable to losing subscribers if perceived value doesn’t align with the price.

Flexibility and Value

Mayur Joshi of BC Web Wise explains, “The significant price fluctuations in OTT services over the past couple of years reflect a dynamic market responding to consumer demand and competitive pressures.”

Platforms like Netflix and Amazon Prime Video have adjusted prices and added options to match consumer budgets and preferences. “OTT providers are increasingly offering varied subscription models, allowing consumers to choose plans that best fit their viewing habits,” Joshi notes.

He highlights that while many consumers appreciate high-quality, exclusive content enough to accept price hikes, others still seek more affordable options. “The justification for price changes hinges on perceived value,” he explains, adding, “For consumers, balancing content quality with affordability is key, especially in a competitive and rapidly changing market.”

(Tomorrow: Part 2 of this report will dwell on targeted pricing for local markets, affordability as a strategic advantage, effective pricing strategies for OTT platforms, rise of regional OTTs, and much more.)