Long-form video (LFV) in India is poised to grow to a whopping 650 million users by 2025, according to a new report by the American consultancy firm Bain & Company. This growth, the report said, will be driven by a steady increase in the internet user base, access to cheaper, faster data, the introduction of more affordable plans, including the advent of freemium models, and a proliferation of content. “A strong push on regional and vernacular content will accelerate this even further—85% of content viewed is non-English, and 30% is in languages other than English or Hindi,” the report said.
The Covid-19 pandemic is another contributing factor fuelling the rise of LFVs, the surge bolstered by prolonged lockdowns and with work from home becoming the new normal.
Today, India’s online video user base has scaled to more than 350 million people—growing at 24% annually from 2018 to 2020. Over this period, the time spent on online videos per daily active user per day has increased by 60% to 70%. “Despite this rapid boom, there exists massive headroom for growth—online video user penetration in India is nearly 60% of internet users, compared with more than 90% in China,” it said.
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YouTube has always been the juggernaut in the LFV space, but other players are also growing at a fast clip. Paid subscription-based platforms like Netflix, Amazon Prime Video, and Disney+ Hotstar, saw a sharp uptick in users last year, especially during the first lockdown in March through June 2020. “Sports content has helped players such as Disney+ Hotstar expand their user base significantly, with the platform seeing a 50% increase in monthly active users during the Indian Premier League in 2020,” the report said.
“Successful players will focus on three areas as they onboard the next wave of users and drive engagement: tech-enabled hyper-personalisation, creator enablement and lock-in, and monetisation. This will require access to large amounts of capital as well. Content drives differentiation, and it is possible for multiple platforms to co-exist in steady state, as seen in developed markets,” said Abhishek Raj, senior manager, Bain & Company.
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TikTok, owned by Beijing-headquartered ByteDance, was the first large SFV platform in India, with over 200 million users and 20 million content creators posting at least one video a month. The Indian government’s ban on TikTok in 2020 led to an explosion of Indian upstarts targeting the opportunity. The market is now occupied by a mix of specialist SFV apps and global social media/video giants such as Moj, MX TakaTak, Josh, Roposo, and Zili—which have more than 100 million downloads each.
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“Short form video ecosystem is a three-sided network of users, creators, and advertisers, powered by a technology platform. Although short video monetisation is nascent in India, digital advertising will be the first frontier for platforms. Brands must allocate a portion of their digital advertising dollars to such platforms to leverage their wide reach,” said Manan Bhasin, associate partner, Bain & Company.
But LFV will grow faster as it is currently two times more penetrated than SFV, the report pointed out. The market is crowded with more than 50 platforms, with four archetypes of players vying for consumer time: global giants (e.g., YouTube, Netflix, Disney+ Hotstar), platforms by television broadcasters (e.g., SonyLIV, ZEE5), specialist Indian platforms (e.g., MX Player, Eros Now), and aggregators (JioTV).
The report said that going forward, there are six major trends that will shape the OTT space in India: an out-and-out explosion of content, including original, regional, and niche material; value chain integration, with OTT players foraying into content production; tech-enabled personalisation and recommendation algorithm sophistication; a push for monetisation; user engagement via social features; and tighter scrutiny and content moderation.
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