India’s Video Market Poised for Record Levels of Consumer Spend

Despite the volatile impact of the pandemic, India experienced strong economic growth during the second half of 2021. According to Futuresource Consulting’s Video Insights India report, recuperation is already underway across the video entertainment market, which is on track to post record levels of consumer spend in 2022.

“The rapidly growing SVoD market helped to offset the declining overall video entertainment spend, caused largely by pandemic-driven cinema closures,” explains Morris Garrard, Lead Analyst at Futuresource. “Indian SVoD is an intensely competitive market and is expected to drive much of the future growth of the Indian video entertainment spend.”

Disney+ Hotstar Driving Major Gains in SVoD Segment

With major international platforms, such as Disney+, Amazon Prime and Netflix spearheading SVoD expansion, a myriad of well-established local players is also supporting this continued market boom, with total SVoD subscriptions expected to breach the 100m threshold for the first time in 2022.

Key aspects securing the future success of SVoD operators in India will hinge on increased investment in both original and regional content, as well as the abundance of low-cost mobile data plans enabling SVoD to flourish. The rising affluence among the growing middle class in India is also encouraging new subscriptions to SVoD services.

“The provision of regional language content will be crucial to continued growth” says Garrard. “All major platforms are expected to increase investment in this area to appeal to a broader customer base.”

The market is set for continued robust growth, with a healthy double digital 2022-2026 CAGR forecast for both subscriptions and consumer spend.

AVoD Remains a Key Pillar, with Pay-TV Paving the Way for Continued Growth

Price sensitivity among Indian consumers places AVoD in a prime position across video entertainment in the country. With an abundance of services offering free content, there are already approximately half a billion Indian consumers accessing AVoD platforms monthly.

“A hybrid model between AVoD and SVoD is expected,” says Garrard. “With service operators upselling SVoD across free streaming options, highlighting benefits of paid subscriptions, such as ad-free viewing, improved streaming resolutions and exclusive paid content.”

Equally, Pay-TV continues to post a robust performance and is forecast to account for three quarters of consumer spend on video entertainment in 2022, as the new tariff order continues to re-shape the sector.

TVoD and EST Augment Box Office Recovery

Across the video entertainment landscape, the most severely impacted by the pandemic was the box office segment. Cinema closures intermittently throughout 2020 and 2021 resulted in a sizeable downturn in consumer spend.

“The box office is showing positive signs of recovery, however.” Says Garrard. “The current forecast indicates the segment will exceed pre-pandemic levels by 2024.”

Under challenging market conditions, local titles have gained greater prominence in the Indian theatrical segment, claiming over 60% of the gross box office. Though positive signs are emerging for Hollywood also, with a very strong performance for Spiderman: No Way Home to close out 2021.

TVoD is becoming a key sub-segment within the digital transaction market, accounting for around two thirds of digital transactional spending. With a majority of consumer TVoD spend expected to be generated by iVoD, this segment is expected to thrive in the coming years.

“Local cinema ticket booking agency, Book My Show, launched its iVoD business in 2021,” says Garrard. “Amazon is expected to launch its own transactional business in Q2 of this year. Both local championing and Amazon’s entry are expected to provide the iVoD segment with a major boost in the coming years.”

As the industry continues to move forward, further investment by international and local players will drive consumer spend across the video entertainment market and present new innovations and opportunities across India.

For further information, please contact leon.morris@futuresource-hq.com

About the author

Morris Garrard

Morris Garrard is a Market Analyst at Futuresource Consulting, working within the Media & Entertainment team. Morris leads a number of projects within the Video Insights report series, covering the waterfront of video entertainment in multiple international markets. Morris also works on Futuresource’s biannual ‘Living With Digital’ Consumer survey.