The Big OTT Growth Story – Chapter 1

19 Jul,2019


By Shailesh Kapoor


The rise of OTT/ digital consumption in India is a narrative that has dominated media discourse over the last year or two. The sheer volume of launches from the top players is reason enough for it to be a hot topic of discussion. The creative muscle backing many of these shows, especially those from Amazon Prime Video, Netflix and Hotstar, makes the OTT story even more persuasive.


There’s an element of scepticism about how, and to what extent, is the OTT content delivering, both in terms of eyeballs and revenues. Absence of a unified currency means that there are no numbers in the public domain. Individual platforms may release specific data, such as Hotstar talking about the growth of IPL on the digital platform year-on-year. But the larger picture is incomplete, because a central data source is missing.


This has been a topic of great interest for us at Ormax, and a lot of work has been happening in the background over the last year in this area. Over the next few weeks, you can expect to read more on this aspect here, in this column.


A few weeks ago, we got one of the first definitive evidences on the OTT impact on media consumption in India. In the 2019 update of The Ormax Bollywood Audience Report (TOBAR), which sizes and profiles the Hindi moviegoers’ universe, the market size of regular theatregoers (defined as those who watched three or more Hindi films in a theatre in the previous calendar year) fell by 8%, from 3.61 Cr to 3.33 Cr. This itself is not much of a story, especially because this drop coincided with a higher incidence rate, i.e., while less people may have gone to theatres, they went more often, leading to higher box office in 2018 than in 2017.


However, if we see the age break-up of the Hindi moviegoers’ universe over these two years, there’s a striking pattern. The table below shows this break-up:


The drop in the universe size shows a clear negative correlation to age. From a 20% drop in the teenage segment to a 13% drop in the college youth, it becomes a mere 3% in 25-34 yrs. And then, there is actually an increase in the 35+ segment. In effect, the 15-24 yrs. segment lost 27 lac audiences within a year, but the 25-44 yrs. segment lost only 1 lac audiences.


It is not very difficult to attribute this trend to the ascendancy of digital content in India over the corresponding period of time. The youth have been the early adopters of original OTT content, and a section of them have moved away from theatrical consumption of Hindi film content as a result. A parallel rise in Hollywood’s popularity in India adds a layer of complexity to this argument, but that’s another story for another day.


While this may be a compelling concern for the theatrical business, it is also a validation of the OTT growth story. And the OTT growth story may have only just begun. The 25-34 yrs. age group could be next on the line.


What’s the likely impact on TV in the coming years? Watch this space!



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