By Shailesh Kapoor

We are nearing the end of 2022. It was a year when a lot seemed to be going on, in the Indian entertainment business, but not always towards any lasting impact. Mostly then, it was the year of recovery, which saw a semblance of normalcy for the first time since 2019, in audience behaviour and sales figures across domains. It was also a year of mergers and acquisitions, with some big-ticket agreements (Zee-Sony, PVR-INOX, Adani-NDTV, ShareChat-MX Takatak) making the headlines. Such deals can be seen as an indirect outcome of the pandemic, which has fundamentally altered business models of all shapes and forms.

On the content front, there was less to speak about. Theatres reopened and 2022 will end up being the second-highest grossing year ever at the Indian box-office. But except the highly imaginative RRR and Kantara, the box-office came from the usual franchise-led cinema that’s driving theatrical footfalls globally now.

The linear television industry has been devoid of surprises on the content front for a while, and 2022 was no different. Some of the better content, then, came in the streaming space, which entered a settled phase post the windfall gains from the pandemic. To begin with, there was more genre variety on offer, with many stories going beyond the staple action-suspense-thriller box. A list of some of the defining shows and direct-to-OTT films of 2022 deserves a piece of its own, in the coming week or two.

But the streaming industry has its task cut out. Our recently-released OTT audience sizing report reveals that the bigger markets have reached saturation levels on OTT penetration and SVOD subscriptions. The average OTT penetration in the top 20 cities in India stands at a high 72%. While more than half of these are still watching only ‘free’ content, the finding that should set alarm bells ringing is: Among SVOD subscribers, the average number of subscriptions taken has remained exactly the same as last year (2.4 subscriptions per paying subscriber).

Expecting the (relatively) early adopters to keep subscribing to more apps is, hence, a wishful proposition. The next level of growth for pay platforms can, therefore, come from converting free (AVOD) audiences into SVOD, especially outside the top 6 metros. And this is easier said than done, because neither the content being churned out, nor the audience’s willingness to pay for their entertainment, are aligned to this growth path.

Streaming platforms have managed to bail out the Hindi film industry for much of 2020-22. As they face growth pressure themselves in 2023, ripples will be felt in the theatrical business too. Early signs of this could be felt this year, when we saw several small films release theatrically, only to legitimize their OTT licensing deals.

With so much going on (and I haven’t even mentioned sports and news in this round-up), 2023 is unlikely to be short of excitement. Hope the quality of content measures up to all the action on the business front.