Evolution of The Entertainment Ecosystem in India and Challenges Ahead

Evolution of the Entertainment Ecosystem in India
and Challenges Ahead
PROJECT COURSE: TERM IV
Mentor: Prof. Sanjay Verma
Submitted by:
Abhishek Kumar (19102)
Pratyush Kumar (19348)
Indian Institute of Management Ahmedabad

Table of Contents
Executive Summary 3
Introduction 4
Business Models, Key factors and Growth Areas 10
Literature/Report Review 16
Consumer Behavior and Usage Patterns 20
Primary Research & Findings 25
Statistical Analysis 46
Conclusion 53
Exhibits 55
Appendix 65
References 77
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Executive Summary
OTT platforms have been experiencing significant growth in last decade worldwide. OTT
platforms have become a part of consumer life by replacing conventional entertainment
sources. In recent years, India has become an integral part of this growing trend. On the
backing of decreasing mobile data charges, increasing mobile phone penetration and
availability of affordable devices to access OTT content, Indian OTT segment has been
experiencing a consistent growth over the years.
In 2020, usual trends and norms have been challenged from the roots. While it is true that
OTT segment has witnessed inorganic growth due to COVID-19 pandemic, but it has also
highlighted the change in consumer behaviour and the voids which need to be filled if niche
OTT players need to stay relevant. Adoption of popular and affordable platforms like
YouTube, Hotstar and Amazon Prime are on the rise, in contrast Netflix has not been a part
of the same tide. Netflix, until recently, have been backing upon its exclusive high quality
content to gain customer acquisition to demand premium from its users, but the norm has
been challenged during the lockdown.
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Introduction
Entertainment has been an integral part of human civilization for centuries. Time and time
again it’s subjected to various changes. Take an example of hunting, in the British era,
hunting was quite prevalent amongst British officers, regional kings among others. But today,
due to variety of reasons it is not publicly accepted practice.
Time has led to transformation of entertainment repeatedly, whereas most form of

entertainment usually originate from a previous one. Yet the core remains intact. Putting in
simple terms, entertainment is any task or activity which provides excitement and
engagement.
The invention of television could be considered as one of the greatest disruptions in the way
entertainment was consumed earlier. In India, terrestrial television was introduced in the year
1959 with experimental telecast. By 1975, Doordarshan, then part of All India Radio,
transmitted one-hour programs twice a day. In the year 1982, National telecasts was
introduced, and Color TV was launched in India. Year 1991 brought variety of reforms and
broadcasting industry was liberalized. Fast forward to 2016, the television industry in India
had over 857 channels watched over in more than 167 million households.
With the arrival of OTT (over-the-top) media services 2016 witnessed arrival of another
revolution. OTT streaming could be defined as delivering of content over the internet directly
to the consumer. This marked a significant change into a modern on-demand age of choice
from the standard tune-in, “consume-what-you-are-fed” paradigm of traditional television.
In this report, we would be focusing on the emergence of OTT services and studying the
consumer behaviour during the pandemic.
What are OTT media services?
OTT can be defined in many ways, one of the old school definitions is ‘All types of services-
for the users over the internet directly without any contribution of mediators like in case of
old-style or traditional modes.’. Typically, OTT is associated with video on demand, but it
also refers to audio streaming, messaging services or internet-based voice calling solutions.
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Figure 1: On-demand content ecosystem
Service providers of an OTT can be well-defined as a facility provider presenting ICT

(Information Communication Technology) services, but neither functions a system nor rents
system capacity from a system operator. Instead, OTT providers trust on the worldwide
internet and contact network speeds [ranging from 256 Kilobits for messaging-Megabits (0.5
to 3) for video streaming] to spread the user, hence going “over-the-top” of a telecom service
provider’s (TSP’s)network.’- 2015 TRAI (Telecom Regulatory Authority of India). In other
words, OTT can be explained as the distribution of content via internet connections (fixed
broadband/mobile) instead of traditional ways of broadcast over TV spectrum or satellite
networks. Primary difference between traditional video and OTT is mode of distribution of
content to the viewers.
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Figure 2: OTT video platforms almost operate in the same way as the traditional mode of
entertainments
In recent past, OTT platforms have bypassed third part networks. The consumer only requires
an active internet connection and a compatible hardware device to access the services.
 Mobile devices: OTT applications are downloaded on smartphones and tablets via
Google Play Store or Apple Store
 Personal computers: Laptops or computers are widely used to browse OTT websites
or desktop-based applications
 Smart TVs: Latest models come with pre-installed OTT applications and wireless
connectivity.
 Digital media players: Devices like Sony Play Station or Microsoft X Box also
support a range of OTT services.
Emergence of OTT Services
The streaming industry for over-the-top content (OTT) content consists of the transmission
and sale of video content over internet. The demand for OTT streaming is increasing
substantially on an ongoing basis and this is drawing interest from many major global players
such as Apple, Disney, Hulu, etc.
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At a compound annual growth rate (CAGR) of 55.0 percent, the global OTT streaming
market is projected to grow from $104.11 billion in 2019 to $161.37 billion in 2020. The
explosive growth can be attributed to the lockdown caused by COVID 19 pandemic, which
led to significant increase in the OTT subscriptions and their viewership. The demand
forecast is expected to stabilize and hit $169.4 billion in 2023 at a CAGR of 14.0% from
2021 onwards. (PwC, Global Entertainment and Media Outlook report 2019)
As of 2019, North America OTT market is the largest in the world, but according to PwC,
Global Entertainment and Media Outlook report 2019, Asia Pacific countries are expected to
overtake OTT video market by the end of this year.
The increasing shift from tradition entertainment is expected to grow at rapid pace due to add
on benefits like on demand services and ease of access. The report also suggested a decline
of 2.3% per year of US Traditional TV market.
BIGFlix, introduced by Reliance Entertainment in 2008, was the first India-dependent OTT
website. Digivive launched the first OTT smartphone app in India in 2010, called nexGTv,
which offers access to both live TV and on-demand content. In the year 2013, nexGTV
become the first application to live stream Indian Premier League. In the same year, launch of
Ditto TV and Sony Liv caught the eyes of Indian audience.
Things got heated up with the launch of Hotstar in year 2015, the most subscribed to OTT
platform with more than 400 million application downloads and 100 million active users as of
2020. Introduction of American OTT giants, in 2016, Netflix and Amazon Prime changed the
Indian OTT landscape forever. Netflix has the longest average watch time of more than 120
minutes, which is six times average watch time of Hotstar, according to Morgan Stanley
Research. Netflix and Amazon Prime brought a library of unique and original content which
quickly become popular with Indian youngsters. The number of players in the India OTT
market increased by 3.5 times in the last 6 years and soon they realized the need to ante their
game, to stay competitive against the new players.
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Figure 3: Heavy Investments in Content by Multiple Players Also Already Underway, No
Longer "Just Lip Service" as Market Clearly Important
With a projected revenue of US$2,315 million in 2020, Indian OTT video segment is
expected to grow an annual growth rate of 16.8% to reach a revenue of US$ 5.041 million by
2025. It is safe to suggest that OTT space is hyper competitive and is attracting players with
unique value propositions and different business models (Exhibit 1 & 2).(BCG report, 2018)
According to BCG analysis, OTT players are making huge investments in fresh content to
deliver on their promises and core propositions.
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Figure 4: Indian OTT Market is Hyper Competitive and has attracted various players with
different Business Models
Figure 5: Different Types of Content developed and syndicated by OTT platforms
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Business Models, Key Factors and Growth Areas
Monetize with the right model
OTT has transformed the way videos have been consumed traditionally. Changing viewing
habits and giving more control to viewers to view what they want, when they want is
fundamentally shaking up pricing structure. Channel bundles or DTH packs are things of
past. Opting for finest monetization model depends upon the type of content one offer along
with targeted audience segment and business strategy.
Broadly, there are four main business avenues applied to OTT which are gaining significant
traction in global space: AVOD, SVOD, Freemium and TVOD.
 AVOD – Advertising Video on Demand
AVOD is one of the most common and popular revenue models in India. It works on the
principle that the inclusion of ads covers the costs involved with content creation and hosting.
For users who can log in and view content, this model is usually free, in exchange for
viewing advertisements. This paradigm of monetization produces lower income but has a
large base of fans.
AVOD services would be gaining more popularity in coming years, with rich exhaustive data
inherent to online channels, it provides massive opportunity for targeted and automated
advertisements.
Some of the prominent examples who use this model are YouTube, Yahoo Screen, AOL On,
Voot, MX-Player, TVF Play, etc.
Advantages: AVOD has inherent advantage due to its free nature, leading to low customer
acquisition costs. It also provided hassle free sign in process with one step sign up using
google or other social media accounts. Availability of vast consumer data helps advertisers to
run targeted advertisements. To increase revenue streams, this model can be clubbed with
SVOD which we will discuss later to provide a premium package for the consumers.
Disadvantages: Advertisements usually ruins overall customer experience. It can possibly

bother consumers, leading to increase in dropout rate of customers. To serve them well,
platforms come up with dynamic and multitudinous revenue model.
 TVOD - Transaction Video on Demand
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TVOD is the next popular video on demand model. Core proposition of this model is that
user pay for what he gets i.e. user pays one-time fee to watch the content they want without
any long-term commitments.
In absence of any long-term commitments, TVOD finds it difficult to acquire and retain
customers. One of the ways of achieving above mentioned goal is by offering attractive
prices on select pieces of content to gain recall, while monetizing high demand content like
live sports events or new movie or web series releases. TVOD demands high marketing skills
as small fees can add up to considerable amount when targeted to the right audience.
Some of the examples who use this model are Google Play, Amazon Instant Go, VUDU,
CinemaNow and iTunes.
Advantages: The TVOD model's unique selling proposition is immediacy. Users can access
new movies and series by renting or buying them way before they are broadcasted on
television. This model provided value for money experience for consumers and better
revenue opportunities for popular on demand content.
Disadvantages: TVOD has fell short of other models in recent past, due to stiff competition
good quality content is widely available at a fraction of cost leading to low customer
retention. One of the biggest downsides is its inability to counter piracy. Consumers instead
of paying for a movie can simply download it from websites which offer it for free.
 SVOD – Subscription Video on Demand
The subscription word in this monetization model suggests that the consumer must subscribe
to a video service for specific duration and access variety of content available on the platform
anytime and anywhere during that period at a fee. This concept is the exact reverse of TVOD,
where the user gets access to specific pieces of content.
SVOD subscriptions can be monthly, quarterly or annually, and renews automatically until
cancelled by the user. “Easy in – easy out” is a key feature of SVOD, which offers freedom to
the user to leave whenever they want to.
SVOD pricing models: SVOD offers different pricing models which platforms can consider
according to their target consumers and content they offer.
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1. Free Trial: This model provides a glimpse of variety and quantity of quality content
on offer to the potential users for a limited amount of time usually free of cost. The
users if satisfied can subscribe according to their wish.
2. Freemium: This model is apt to bring immense user traffic on the platform by offering
content free of charge with or without advertisements. However, if the user wishes to
watch premium content without advertisements, they must pay for it.
3. Varied Access: This model provides differentiated user access to the content
according to their subscription plan. For example: Netflix offers plans for 1 screen, 2
screens + HD or 4 screens + Ultra HD. In such a system, user can opt for a plan
according to his needs.
Examples of SVOD are Netflix, Amazon Prime, HULU, Curiosity Stream, HBO Now to
name a few.
Advantages: SVOD model is considered best for Video on Demand and linear TV services as
it offers a steady recurring revenue stream and high customer retention. According to various
Industry experts, SVOD also offers higher revenue per user.
Disadvantages: One of the drawbacks of this model is that pricing tends to be inflexible. With
increasing costs of content production and small subscribers base, profits margins are
shrinking like never before.
 Hybrid Video on Demand
With soaring admiration of Video on Demand amongst diverse target segments, platforms are
coming up various bundles or hybrid models to monetize their content and capture bigger
piece of market share. Service providers like YouTube have come up with hybrid model of
AVOD or SVOD, giving users the option to select a model for themselves. User can opt to
pay no subscription fee but have to see advertisements or he can pay a premium fee for an
add free viewing experience. Hotstar on the other hand, offers a combination of AVOD and
SVOD i.e. Hotstar subscribers even after purchasing premium membership often view
advertisements.
Advantages: Hybrid model has been gaining a lot of attention as data costs are gradually
reducing and content costs are soaring. AVOD service providers are creating an environment
for smooth transition of their audience to subscription model. They are taking this one step
ahead by offering tiered subscription model. The TVOD model's unique selling proposition is
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immediacy. Consumers will access films and TV shows even further than their general
release on a TV broadcast by leasing or purchasing them. SVOD players are not very far
behind, they have changed the manner in which products were promoted or advertised.
Keeping its core proposition intact, Netflix has stepped up its advertisement game by placing
sponsored products within their content. Hybrid Video on Demand model is proving to be go
to strategy for players who want to target different market segments without losing their core
proposition.
Disadvantages: Not exactly a disadvantage, but a weakness is customer retention. If users do

not feel incentivized with premium content offered, they can anytime switch to low value
plan making it difficult for the service provider to keep right balance between premium and
low valued content.
Key Differentiators of an OTT Platform
 Understanding Customer Behaviour

 To understand different customer segments
 To provide a complete consumer experience - reduce churn rate & increase retention
 Make use of Analytics for personalization
 In India: Regional Content is in high demand
 Content
 For OTT Platforms “Content is King”
 Varied Content – Originals, Long/Short type, Catch-up TV etc.
 Different types of content developed and syndicated by OTT Platforms
 Distribution, Promotion & Marketing

 Select the right distribution mix
 To create awareness - For customer acquisition
 Setting the right price point

 To cater to various customer segments to create value-for-money sentiment
 Differentiated Plans – free trial for Netflix, VIP V/S Premium for Hotstar
 Will also depend upon the revenue model
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 Technology
 Platforms that are not sharp in addressing consumer expectation on quality of
technology and interface struggle to scale up
 Significant investment in technology and marketing / branding to build critical mass
Key factors
OTT growth is at the cusp of inflection point in India. Several growth drivers are falling in
place:
 Improving connectivity and fall in data prices
On the go consumption of content have been easy but introduction of Jio made it affordable
for the whole nation. Since the launch of data prices have decreased drastically and data
consumption has increased by ten folds, leading to creation of significant demand for digital
content by Indian consumer.
 Increased smartphone penetration
In India, smartphones penetration has been a key drive for OTT consumptions. In recent
years, smartphone have become an essential part of human civilization. Only in India there
are more than 450 million active smartphones. Deep penetration of smartphone in India
market with affordable data service is just the perfect combination for current government’s
Digital India campaign.
 Favourable demographics
Urban migration has been a common phenomenon in last decade. Due to this more and more
people become upwardly mobile. India is also witnessing major shift income distribution as
significant portion of low-income segment have been uplifted. Democratization of internet
has led to expansion of consumer segments from urban metros to rural India.
 Increase in supply of content

With the incoming of OTT giants like Netflix and Amazon, there is a shift of waves in the
India OTT market. Indian OTT players have been playing a long catch up game, but entry of
these players forced them to move beyond catch up and licensed content.
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Benefits of OTT Platform
1. Connectivity: OTT platform are user friendly and require limited resources. Only
active internet connection along with mobile or computer are enough.
2. Cost Friendly: In comparison to conventional TV, OTT platforms are cost friendly.
The content one would get with a premium pricey bundle on TV cable is available on
OTT at minimum price.
3. Convenience: Whenever, anywhere and as much as you want, OTT channels allow
you to access your favourite media content.
OTT also provides freedom over geographic location, considering physical criteria for
cable TV depending on location. By only signing into your streaming service account,
it can be viewed from anywhere.
4. Variety content: One can access hundreds and thousands of movies and shows via the
Video on Demand applications. Often, news, sports, material for children and several
more are included. Users can watch and enjoy most content from other countries,
thanks to OTT.
5. Device: As mentioned earlier, OTT supports multiple digital devices, so one can
enjoy content irrespective of availability of specific gadgets.
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Literature/Report Review
The OTT market has, in the last few years, witnessed phenomenal growth, bolstered by the
democratization of internet access to millions across rural areas. As per
PricewaterhouseCoopers, India’s OTT market is poised to grow at 21.8% CAGR, from US
$628.8mn in 2018 to US $1.68bn in 2023 (Thakraney, 2018). This will make India the eighth
biggest market in the world, overtaking South Korea.
As per a FICCI report, there are four factors that attract new players to India’s OTT market –
pipe, data, devices and habits (Fitzgerald, 2019). ‘Pipes’ is the development of digital
infrastructure that has witnessed a rapid rise in the past few years, fuelled by the
government’s Digital India initiative and private initiatives around providing free Wi-Fi (such
as by Google). More than 112,000 km of optical fibre had been laid out by end of 2018,
which will further drive digital consumption. ‘Data’ is reduction in costs due to price wars
that started with the introduction of Reliance Jio. Data costs have fell from Rs. 250 per GB in
2015 (for high-speed internet) to Rs. 5-7 per GB in 2020. ‘Devices’ is the third component,
where India has witnessed a mobile phone penetration that is unmatched by developing world
standards. Mobile screens have emerged as an alternative screen for media consumption. The
report further highlights that urban consumers have been early adopters of OTT platforms,
especially in the age group fifteen to thirty-four. The final factor, ‘Habits’, is the increased
reliance on watching content on-the-move due to long commute hours and a greater exposure
to a wide variety of content.
The rise in consumption of OTT services not only benefits consumers, but also gives
marketers with tons of new data points about what consumers are watching, liking and
sharing. While brands have been reluctant to tap into this new sphere for marketing, that
trend has been changing of late. Digital advertising growth is measured by the rise in the
number of impressions. An impression is logged whenever an ad is displayed to the user.
This is different from a click as the user does not have to interact with the ad in the former
case. OTT advertising impressions have grown by 182% in Q1 2020, as per Nielsen (Clapp,
2020). Previously (in Q1 2019), OTT devices and services accounted for 11.1% of the total
number of digital impressions. This has increased to 22.2% in the first quarter of this year
(Clapp, 2020). OTT advertising allows for precise targeting, gives access to measurement
metrics and offers better ROI. OTT platforms also attract younger and more affluent
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customers, who have a larger disposable income, enabling advertisers to tailor content
specifically for them. Digital ad spends has been projected to grow rapidly, with the market
forecasted to quadruple to Rs. 294.5 billion in 2021 from 76.9 billion in 2016 (growth of 30.8
percent annually). Presently, advertising on OTT is meant to complement traditional forms of
advertising.
Contrary to the US OTT market, the Indian OTT providers derive majority of their revenues
from advertising. This is true for freemium subscription model as well, as only a small
percentage of Monthly Active users (MAU) pay subscription fees. Ten of the top twelve
platforms in India are based either on freemium or AVOD (Fitzgerald, 2019). By the end of
2020, it is expected that subscription-based models will account for one-tenth of the total
OTT market revenue. Two years ago, this figure was a meagre 2-3 percent.
When it comes to transactions, a big divide is observed across Asia Pacific region and other
geographies. While PCs remain the dominant device for conducting transaction on the OTT
platforms in India and other Asia Pacific countries, Mobile is the preferred device for
payment related tasks in Middle East, Africa, Europe and North America (Euromonitor,
2020).
The willingness to pay for content varies across regions as well. There may be a correlation
between the prevalence of piracy and how willing users are in parting with their money for
subscription fees. An interesting case is observed in Malaysia. The amount of free content
and pirated content has led streaming platforms to move from a subscription-only service
model to either a dual model (freemium), or a completely ad-supported business model
(Financial Times, 2019). Another factor at play is the uniqueness offered by a platform.
Netflix, for example, has more pricing power than its competitors. A Wall Street firm studied
2,500 Netflix users and concluded that there is a rise in consumers of Netflix who are willing
to pay more than they presently do, from 47% in December 2019 to 55% in May 2020
(Variety, 2020). This trend is more significant among consumers who heavily stream content.
60% of them are ready to pay a higher subscription fee. The reason behind this rise can be
attributed to how essential Netflix has become as a source of entertainment in the Covid-19
era.
The option of viewing ads while watching content on streaming platforms for a reduced
subscription fee has also received broad acceptance among Indian customers. 1 in 3 users say
they would be willing to trade-off between ad viewing and lower fees. 25% want these
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services to be free and change their revenue model to ad-only (Statesman, 2019). On the
other end of the spectrum, 14% are okay with paying a higher fee if the platform promises to
never air an ad. When asked about the advertising load (number of ads per break), 22% felt
that two ads were acceptable for a single break (Asia OTT Research, 2019).
According to an online survey which compared the cost of streaming across 13 countries,
India came out to be the least affordable country to subscribe to streaming services
(Sebastian, 2020). The average cost of a streaming service in India accounts for around 2.8%
of the average monthly income. In USA, this figure stands at 0.22 percent and none of the
countries analysed in the survey had the cost higher than 0.32 percent of the average income.
Even from the perspective of platform owners, developing countries like India and China do
not offer a price advantage. In US, the average revenue per user (ARPU) is $11/month for
SVOD services, whereas it is $3/month in China and $2/month in India (BCG, 2018).
However, as more people opt for subscription-based models rather than advertising-heavy
models, companies will see their profits rise.
China provides an interesting case study for the above trend. Within five years between 2014
to 2017, greater than 35 percent of industry’s revenues come from subscription fees. Many
players started out with AVOD services and later shifted to SVOD. To drive conversion, new
and original content exclusive to the platform was used as an incentive to convert free users
to paid ones. China also tried out a ‘watch-before’ model, wherein subscribers get to watch
releases first and later the content is available to free users for a short duration (BCG, 2018).
As the platform providers rely more on original content to entice viewers to pay, the average
number of original series produced by them increases rapidly. According to the Boston
Consulting Group report, China observed an increase from an average of 13 original series in
2012 to 143 series in 2016 for the top 3 players. A worrying trend is the simultaneous
increase in cost per episode of original programming.
The demographics of consumers is also witnessing a transformation. In 2016, 29 percent of

OTT consumers belonged to tier-1 cities. This is expected to go down to 23 percent by the
end of 2020. The proportion of consumers who are males will drop drastically from 70
percent in 2016 to 60 percent by 2020 end. When it comes to the age divide, it is expected
that the percentage of consumers who are millennials (<34 years) will also decline from 74
percent to 67 percent in the same period. The changing needs of the Indian consumer is
evident from the greater consumption driven mindset that has been witnessed recently.
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India’s top 20 lakh households account for around 40 percent of the total consumption and
hence OTT providers focus on this bracket. 60 percent of urban consumers prioritize saving
time over money, as per a consumer trends study conducted by BCG in 2016.
Consumer satisfaction is higher for OTT platforms than traditional pay TV, with a recent
Digitalsmiths report stating that 92 percent of Netflix subscribers are satisfied with the
service against 76 percent of pay TV subscribers. 78 percent also mentioned that it is easy to
find something to watch on Netflix compared to 58 for linear pay TV (Baumgartner, 2016).
To combat this, many pay TV operators have invested into fancier, cloud-based interfaces
and have started providing recommendations to their users. The expectation is that they will
follow Netflix’s success with this approach, as personalized content drives 75 percent of
Netflix views.
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Consumer Behaviour and Usage Patterns
Typical Classification of Consumers Based on Their Behaviour
The following table classifies the Indian consumer into nine different segments based on their
viewing behaviour on OTT platforms. The profiling was done by a study (Ormax OTT
Audience Report, 2019) wherein viewers were given a list of 23 different TV shows and web
series and asked to select the shows which they had watched till the final season. This was
done not to measure the viewership of these shows, but to determine the content choices of
different consumers. This data was used to come up with the segmentation.
Demographic Viewing
Category Description Size
Details Preferences
Prefers westernized 73% males, 25.4 yrs Netflix, Prime
Young Global
content; binge- median age, lives in 4.4 mn Video,
Citizens
watcher metros YouTube
Cable TV crowd
63% males, 28.5 yrs Hotstar,
Thriller/Actio who watch primarily
median age, Tier-1 3.7 mn Netflix,
n Crowd action/thriller
cities YouTube
content on OTT
Heavily male group, 77% males, 27.4 yrs Prime Video,
Voyeuristic
prefers bold and median age, Tier- 3.2 mn Netflix, ALT
Crowd
abusive content 3/rural Balaji
Price sensitive and
Price older crowd who are 64% males, 29.5 yrs
YouTube,
Conscious not willing to adopt median age, all 3.1 mn
Hotstar
Casuals SVOD services due across India
to high costs
Heaviest viewers,
72% males, 24.8 yrs Netflix, Prime
Addicts who regularly watch 3.1 mn
median age, Metros Video, Hotstar
videos online
Catch-Up AVOD watchers 60% males, 33.2 yrs 3.1 mn YouTube,
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who use OTT to
median age, Small
Crowd catch-up on missed Hotstar, Jio
towns
television content
Light OTT viewers 63% males, 30.8 yrs
YouTube,
who watch movies median age, Small
Movie-only 2.5 mn Prime Video,
mostly over the towns and non-metro
Jio
weekends cities
Light OTT viewers
61% males, 28.8 yrs
who watch mostly YouTube,
Comedy- median age, Small
comedy shows and 2.4 mn Prime Video,
heavy towns and non-metro
other short-form Hotstar
cities
content
Younger viewers in
Hindi-speaking 65% males, 24.4 yrs YouTube,
Youthful
regions who watch median age, Tier- 2.2 mn TVF, Prime
Urban Psyche
youthful content 3/rural areas Video
(example – TVF)
Indian Consumer Usage Patterns
Many homes consider OTT platforms to complement traditional entertainment sources, and
not serve as a replacement (BroadbandTechReport, 2018). However, this may be changing. A
recent Indian survey stated that a higher percentage of users (55%) preferred to watch and
consume content through these platforms. On the other hand, only 41% of users still prefer
DTH (ET Brand Equity, 2019).
Smartphones are the primary devices used for consuming OTT content. However, with the
popularity of smart TVs, many viewers are expected to switch to the bigger screen. In 2014,
only 5 million Indian households owned a smart television. By 2018, this was at 14 million,
showcasing a 180 percent growth rate in four years. This growth can also be partly explained
by the rise of disposable income. As per the CCI City Income Database 2016 (BCG, 2017),
the percentage of households who belong to the top consumption class, ‘Elite’, will grow by
2.4x between 2016 and 2025 (There are five household income categories – Elite, Affluent,
Aspirers, Next Billion, and Strugglers). Elites are those who have a household income greater
than $30,800/annum (at current exchange rates).. The threshold household income for
Affluent category is $15,400/annum while that for Aspirers category is $7,700/annum.
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Affluent is also expected to grow, albeit slower than the Elite class, by 1.9x between the same
period. The percentage of population belonging to the Aspirers class is also increasing, from
15 percent of the population in 2016 to 20 percent in 2025.
The demand for OTT platforms is not consistent. Due to the ubiquitous nature of services
such as YouTube, the barrier to entry for a customer is very low due to the platform’s high
popularity and accessibility. On the other hand, Prime Video and newer, niche platforms do
not have the same user-base and hence, they have to roll out extensive trial periods and other
offers to entice new users. Moreover, YouTube also serves as a learning hub for Generation Z
(Guijosa, 2018). As per a survey conducted by Pearson, YouTube is the preferred medium for
learning new topics over in-person instruction. This difference is massive, as roughly 59%
students said that they prefer to use YouTube to learn, whereas the corresponding figure for
in-person instruction was only 39%. On an average, 47% of these 14 – 23-year olds spend
greater than three hours daily on the platform.
Another survey (Comscore, 2016) done on 2,940 respondents concluded that millennials tend
to be more tech-savvy and exhibit early-adopter tendencies. They also have a tendency to
binge-watch content. However, it is important to note that the survey also found out that
presently, millennials consume more traditional TV content than through OTT channels.
When they were asked to rate their preferred content provided, they chose OTT platforms.
The professional quality of content also does not impact watchability significantly, as the
percentage of people who watched videos made by other people against the percentage of
people who watched videos uploaded by brands, companies or professional does not differ
greatly and is roughly equal. The receptivity of this generation towards advertising is also
higher. 62% of millennials said that they take some action after viewing an ad (against an
average of 51% for other age groups). Also, 47% mentioned that they pay more attention to
ads when they realise that the ads are personalised (against an average of 35% among other
age groups). The high level of engagement suggests that advertisers can create ads that
resonate deeply with the consumers and offer high conversion.
The notion of recommendations in the form of curated content being better for consumers is
contested in a few findings. A recent Atlantic article observed that Generation Z prefer
unfiltered over curated content. Privacy also is an important issue among this younger
segment as they are more concerned about the future of privacy (Baron, 2019). A reason cited
by the article for the increased popularity of video-based platforms among this segment
22
points to the versatility offered by OTT platforms. Another newer trend that is grabbing the
eyeballs of younger kids is the ability to watch live content. This live content is not in the
form of traditional reality shows that is broadcast on pay TV, but it is in the form of streams
and vlogs that are televised live on YouTube, Twitch etc.
The ability to connect to the content creators is also a plus for OTT platforms, especially
multi-sided platforms. Watching videos on YouTube and Twitch also allows viewers to
comment and ask creators questions. On many occasions, these creators also hold a Q&A
session for the watchers. The feature of watching content simultaneously with other viewers
from across the globe is a major reason why OTT services are replacing traditional social
media platforms that are text-heavy (such as Facebook).
The contrasting nature of preferences is also evident in another study that concludes that the
availability of de-stressing videos (like ASMR, ambience sounds etc.) has helped the younger
generation cope with depression, insomnia and other mental issues (Poerio, 2016). This
advantage is often overlooked in many studies that aim to understand the popularity
explosion of OTT platforms among the younger generations. The same paper also mentions
that self-help and de-stressing videos serve as a way to promote well-being. There is growing
scientific evidence that points toward the positive effects of such content, with close to 80
percent reporting a positive effect in a controlled experiment.
While many papers conclude that the rise of OTT will end the dominance of pay TV and
watching movies in theatres, actual figures do not show a clear trend. There hasn’t been a
clear decrease in the demand of cinema screenings. PVR’s operating revenue grew to 3,118
cr in FY19. The footfall has also witnessed a rising trend in pre-Covid times, with growth rate
reaching as high as 25% within an year. Coupled with the fact that India has very few big
screens (less than 10,000 screens in India compared to over 60,000 screens in China), with
only 8 screens per million people (Quartz, 2019). This shows that there is too much demand
chasing too little supply.
While many reasons can account for the increased footfall in theatres, one primary reason is
the better quality offered by cinema halls. As the infrastructure improves even in Tier-2/3
cities, viewers visit theatres more frequently to get an immersive experience that is not
possible on their mobile screens. Another factor is the freshness of content. Most of the new
movie releases happen on OTT platforms after a delay of 6-8 weeks from their release in
23
movie theatres. Hence, if one wants to watch a brand-new film, movie theatres have no
substitute (Quartz, 2019).
It can therefore be concluded that digital consumption in India is additive and has not
cannibalized on traditional media consumption. Data between 2016 and 2017 show that
overall media consumption has grown for all segments, indicating that consumers are
spending more time on entertainment and OTT is filling a void left untapped by the
conventional players (BCG, 2018). This behaviour does not mirror developed markets, as
OTT media has become a replacement for traditional cable TV in US and European
countries. In developed markets, cost of pay TV is the primary reason behind cord-cutting
behaviour. A L.E.K survey observed that only 10 percent of these ‘cord-cutters’ would
consider re-subscribing to traditional TV again. Nielsen also estimated that cable TV
subscription is at its lowest level since 2000s, with less than 80 percent of US households
subscribing to pay TV (L.E.K, 2018).
24
Primary Research & Findings
RESEARCH DESIGN
We observed two broad gaps that haven’t been covered in papers published on the evolution
of OTT providers in India. Firstly, we felt that there needs to be more research surrounding
the factors that have led to rise in OTT adoption at an individual level. While numerous
studies cover the demographic trends in the past decade and how consumer behaviour pattern
have shifted, there is a lack of research digging deeper into what makes a person switch from
traditional television to OTT. Secondly, we also observed a dearth of quality research that
estimate the behavioural change that the current Covid-19 pandemic has caused across
millions of households. We tried to attain above objectives through the following research
procedure:
1) Secondary Research of market reports and academic papers to understand how the
customer’s behaviour changed before OTT television and Pay TV were introduced in the
entertainment industry. We also carried out extensive research to understand the capabilities,
activities and business model analysis of players like Netflix, YouTube and Amazon Prime.
2) A set of in-depth interviews to understand shift in consumer behaviour and their

consumption patterns. The questions will be left open-ended to capture the candid response of
consumers and to avoid leading questions that may skew responses about the reasons for the
consumer shift.
3) Survey is designed to validate the key attributes which led to transition from tradition tv to
OTT platforms. Another set of surveys captured the change in consumption of OTT content
during the pandemic.
4) An experiment was carried out to understand how frame of mind of a consumer influences
his viewing habits. We went one step ahead to study if adoption of new OTT platforms is
related to social attributes.
25
Selection of Respondents for Interviews
Respondents were chosen to be as representative of users of traditional TV and OTT

platforms. Thus, we interviewed students, fresh graduates, working professionals,
homemakers, self-employed and retired citizens in unstructured interviews to obtain a
complete understanding of the thoughts and perceptions behind the transition.
Selection of Respondents for Surveys
Online questionnaires were created and circulated on digital communication platforms to

maximize outreach and diversity of respondents across the following parameters:
- Age
- Gender
- Income Level
- Occupation
- Location
Selection of Participants for Experiment
Based on in-depth interviews different personas were created, according to which variety of
users’ representative of the personas were selected to take part in the experiment.
Data Analysis Adopted
We used multi-variate regression to build models to predict how would an individual belong
to particular segment behave when it comes to his/her attitude towards cable TV and OTT
services. The statistical significance of predictor variables in these models would also help in
examining which demographic variables are important determinants of behaviour. Our
analysis would help us estimate the amount of variability in consumer’s attitude towards OTT
that can be justified by our sample dataset.
26
Primary Research
In-depth Interviews
A total of 20 different individuals of differing age groups and occupations were contacted for
in-depth interviews. The primary objective in these interviews was to study people’s viewing
habits, identify attributes of various platforms that people look for, highlight problems with
traditional tv and OTT platforms, and to gauge people’s interest in new movie releases on
OTT platforms.
The details of the 20 interviews are tabulated below:
S Age Gender Occupation Income Bracket Location

No.
1 26 Female Salaried Professional Upper Middle Class Tier 1
2 45 Male Salaried Professional Lower Middle Class Tier 2
3 50 Male Self Employed Middle Class Tier 3
4 41 Female Housewife Upper Middle Class Tier 3
5 22 Male Working (Fresh Graduate) Middle Class Tier 1
6 21 Female Working (Fresh Graduate) Middle Class Tier 2
7 21 Female Student Upper Middle Class Tier 1
8 16 Male Student Poor Class Tier 3
9 19 Female Manual Labour Low Middle Class Tier 1
10 23 Female Housewife Middle Class Tier 3
11 26 Male Salaried Professional Upper Middle Class Tier 1
12 30 Male Voluntary Unemployment Upper Class Tier 3
13 34 Male Self Employed Middle Class Tier 1
14 44 Female Salaried Professional Poor Class Tier 2
15 56 Female Retired & Housewife Upper Class Tier 1
16 41 Male Salaried Professional Middle Class Tier 1
17 48 Female Self Employed Middle Class Tier 2
18 26 Male Salaried Professional Upper Class Tier 1
19 28 Male Manual Labour Below Poverty Line Tier 2
20 39 Female Housewife Poor Class Tier 1
We have identified three different kind of personas according to usage behaviour via in-depth
interviews (Exhibit 3). The key insights gained for each of them are as follows:
1. Conservatives: These are a set of users who prefer to watch content on traditional
television. Lack of family content and willingness to pay are the key factors
restricting the time they spend on OTT.
 Consumer Segment: Voluntary Unemployed (Housewives, retired individuals,
etc)
27
 Prefer to stick to specific genres and resist from experimenting new things.
 Viewing duration ranges from 2 to 3.5 hrs
 Prefer to watch: Daily soaps, news, sports, documentaries and movies
 Pain Points Identified: Want to spend more family time, high OTT subscription
cost, redundant content on OTT for preferred genre.
 Preferred time to watch: Post lunch and the prime time
2. Experimenters: These are a set of users who are keep a balance between traditional
television and OTT platforms. Gradually they are increasing their consumption of
OTT content because of its feature i.e. on the go watching. Convenience of time and
place is key driver for their behaviour. They prefer light entertainment and want to
stay updated with latest happenings. Due to low willingness to pay for OTT content,
they restrict themselves to AVOD and Freemium platforms.
 Consumer Segment: Students, Working women and Self-employed individuals
 Prefer to stick to specific genres and open for experimenting new things.
 Viewing duration ranges from 1 to 3 hrs
 Prefer to watch: Movies, short videos, Vlogs, sports, serials and news
 Pain Points Identified: Lack of variety of content available for free, time crunch
and other commitments.
 Preferred time to watch: Between breaks and after completing routine work.
3. Early Adopters: These are a set of users who demand high quality global content.
They demonstrate high willingness to pay to access their favourite content.
Convenience of time and place alongside huge quantity of varied content are the
primary drivers for such behaviour.
 Consumer Segment: College students, fresh graduates, and recently married
individuals
 Active seekers of new content to stay socially relevant
 Viewing duration ranges from 3 to 5 hrs
 Prefer to watch: Web series, movies, documentaries, sports and regional content.
 Pain Points Identified: Video buffering and hunger for new content
 Preferred time to watch: Holidays and late-night sessions
Experiment
28
We ran a small experiment with 3 users who represented different personas we concluded
from in-depth interviews. Each of the participants were offered premium subscriptions of
various OTT platforms to eliminate the factor of their willingness to pay. Each of the
participant was requested to inform about their daily routine before every time they switched
on to any OTT platform. The main objective of the experiment was to find, if there exists any
relation between mood and frame of mind of a consumer against his consumption pattern.
The experiment was carried out for one month and on an average a person had three sessions
per day.
According to the responses of the selected participants when compared to their viewing
history, we speculated that there are four broad categories of feelings and emotions, where a
user desire to watch certain kind of content often. Four broad categories are as follows:
1. Happy – When a person is happy, he likes to watch content which is trending or

recommended by friends and family. In such a mood, he desires to view captivating
content but fear of missing out plays on his mind consistently.
2. Idle – When a person is idle, he loves to binge watch. He first tries to make up for the
popular content he missed in recent past or looks for new recommendations from the
OTT platforms.
3. Stress – When people are stressed out, they are more inclined to watch light
entertainment like songs, comedy or feel good movies. In some cases, News has also
been go to option for them.
4. Tired – Feeling of tiredness often leads to individuals watching familiar or repetitive
content. It was also observed that they switch between songs and short videos to calm
their minds and get back to routine work soon.
Insights from the experiment
 It was observed that consumers were quick to catch up with popular or trending shows in
the genre they prefer.
 Significant evidence was found to suggest that consumption behaviour of a user relates to
his presence of mind.
 In certain cases, it was found that frame of mind does not play a role, when a person if
watch captivating web series. They often came back to resume the series from where they
left off.
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 Users with more than one subscription, when idle depends drastically upon the
recommendation’s engine. This factor often made Netflix as priority of users over other
OTT platforms.
 In the entire duration of experiment, no user tried to explore any new platforms by
themselves. Access to such platforms is restricted to the duration when new web series
exclusive to that platform is trending across social media.
 Users had high preference to watch regional content on OTT platforms. After their native
or first spoken language, English was the second most preferred language for
consumption.
 When idle for 4-5 hours, users experimented with varied content. There was heavy
influence of social groups or family on the preferences of an individuals.
Survey Methodology
We conducted two different surveys for the two problem statements mentioned. To ensure
that the respondents are representative of consumers of OTT services, we reached out to a
broad base of individuals and households in both urban and rural areas. We also ensured
minimal overlap between the respondents of the two surveys to get a broader sample and to
eliminate primacy effect and fatigue due to filling of time-consuming questionnaires.
Questionnaire Format
Survey I: Analysing why consumers shift from television to OTT
A sample survey is presented in Exhibit 4. The survey begins with asking respondents on
their TV viewing habits and also gives a set of options where they have to fill their level of
agreement or disagreement with the statements mentioned.
The survey then asks whether the respondent has used any of the OTT services. If he/she
respond ‘Yes’, the survey branches on to another set of questions that try to understand which
OTT platforms/services does the respondent use and their feelings around the same set of
statements that were asked previously in the survey. If the response is ‘No’, the respondent is
asked to select reasons for their non-usage. After this, a set of questions are asked to know
more about the age, gender, demography, and family background of the respondent. This is
done so as to ascertain whether a correlation exists between demographic attributes and
behavioural patterns.
30
Findings
We received responses from 152 respondents selected from a representative sample of urban
and rural consumers.
Question: How many hours do you spend on Cable/ DTH TV per day?
Close to two-thirds of the sample said that they spend less than one hour daily, on an average,
watching traditional television. Heavy binge-watchers (those who watch more than 4 hours of
TV daily) are rare on cable TV, making up less than 4 percent of the population.
Question: How many hours do you spend on OTT platform per day?
On the other hand, binge-watching is very popular with the consumers of OTT platforms. We
observe that roughly 16 percent of respondents who watch content on OTT do so for more
than 4 hours per day.
Question: Have you ever used any OTT services? (YouTube, Hotstar, Netflix, Amazon
Prime, Spotify, Jio Tv etc.)
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Only 7 percent of our sample said that they have never ever used an OTT platform. This goes
on to prove that entry barriers to OTT is very low, irrespective of the demographic divide.
Question: What content you watch on Cable/ DTH TV? (You can choose multiple options)
Question: What content you watch on OTT? (You can choose multiple options)
32
We observe that one-fourth of TV viewers watch news, followed by movies (22 percent) and
sports (15 percent). Interestingly, the most popular form of entertainment among OTT
viewers is movies (21 percent), followed closely by web series (20 percent) and music (11
percent). Another thing to note is the huge diversity observed in consumption of content on
OTT platforms. While only 4 percent of the sample watched documentaries on TV, 8 percent
of them watched it on OTT. The proportion of consumers using OTT for watching news is
also significantly fewer (8 percent for OTT against 24 percent for TV).
Question: Please rate on how each of the following statements associate with Cable/DTH TV
In the above graph, we can see that the primary purpose of TV viewing is family
entertainment. 69% of respondents say that they watch TV to enjoy with family and friends.
Around two-thirds either disagree or are neutral about the convenience offered by traditional
television. Only 30% agree to the statement that television allows for private viewing. The
proportion of respondents do not feel heavily constrained by the choice of content available
on TV, as 44 percent state that they have many options to choose from while watching
conventional TV.
33
In the above figure, we see the ratings given by respondents to each of the statements. A
rating of 1 is ‘strongly disagree’, 3 is ‘neutral’ and a rating of 5 is ‘strongly agree’.
The bar graph that respondents associate TV most strongly with the communal aspect of
television viewing – the ability to watch and experience content with friends and family. On
the flip side, they also feel that the nature of television viewing does not allow for personal
watching and convenience.
Question: Please rate on how each of the following statements associate with OTT platforms
34
89% of respondents moderately or strongly agree that the quality and variety of content
available on OTT platforms is high, illustrating that this is one of the primary reasons why
consumers are adopting such platforms rapidly. 80% feel that OTT platforms give a feeling
of control, as opposed to only 28% feeling the same for conventional TV. When it comes to
cost effectiveness, we observe that 23% do not agree that OTT platforms are cost-effective.
This is not significantly different from the 17% of sample that feels the same about TV. This
goes on to show that OTT platforms, at least in their current state, should not be concerned
about pricing as one of the key factors influencing consumer’s decision. 85% also feel that
viewing on OTT platforms is convenient when compared to only 32% reporting the same for
TV. Similar trend is also seen when it comes to privacy offered by OTT platforms.
However, only 45% (against 69% for TV) agree that these platforms can be used for
watching with family and friends.
As can be seen here, the statement that elicited the strongest response is that OTT ‘provides
high quality and variety of content’, with almost everyone agreeing strongly to this. The
downsides of OTT is that entertainment becomes more personal and cannot be enjoyed with
family members. Another noteworthy observation is that consumers do not find OTT more
expensive than traditional cable TV. The graph shows that the respondents rated ‘cost-
effective’ with a mean score of 3.43 in the case of OTT, whereas the corresponding mean
score for TV is 3.38. This statistically insignificant difference does not conclude that OTT
platforms face a cost-barrier to adoption by the masses.
Question: How did you come to know about OTT platforms? (You can choose multiple
options)
35
Word-of-mouth seems to be the dominant way of adoption of OTT services, as around 30%
agreed that they started using a particular service because their friends recommended it to
them. Advertising has also started to play a key role (28%), followed by bundled offerings
(17%) wherein telecom operators bundle either their own OTT platform or third-party
platforms with phone/broadband subscription plans.
Question: What device do you use to watch OTT? (You can choose multiple options)
Mobile is the most commonly used devices to access these platforms, and TV is the least
popular. This can be attributed to the low adoption of smart TVs in Indian households
presently. However, this can be expected to change as smart TVs become less expensive and
consumption expenditure of households increase.
Question: Which OTT platform you often watch? (You can choose multiple options)
36
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100
80
60
40
20
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fli st Ze Li oo ay la ne ow
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We received 482 total selections from 152 respondents for this question. YouTube is widely
the most watched platform, with 130 out of 152 respondents stating that they have accessed
it. Amazon Prime, Netflix and Hotstar have similar number of people watching their content.
The niche and local players, such as Eros Now, ALT Balaji can be seen to be struggling to
attract viewers. The entire market behaves like an oligopoly of major international players
vying for the consumers attention. One reason why domestic players are unsuccessful may
have to do with the variety of available content. As we saw in the previous graphs, consumers
adopt OTT platforms primarily because of the diversity that these platforms offer and lack of
international content on these local platforms could have driven users off from subscribing to
them.
Question: Why don’t you spend more time watching OTT content? (You can choose
multiple options)
37
This question was asked to those respondents who said that they do not watch content on any
of the OTT platforms and stick to traditional print and TV media. Only 5 percent of
respondents selected this option. Hence, the results obtained in this graph is inconclusive due
to the low number of respondents. However, broadly, we can see that adoption is hindered
not because the technology is confusing, but because watching entertainment content on OTT
is not a part of regular schedule for these people.
Demographics
58 percent of our respondents are male, and 42 percent are female. The age group 22-32 is
represented the most in our sample, with approx. 47 percent of respondents. 15 percent of the
152 responses also came from those who are >45 years old.
Question: What is your age group?
Question: What is your highest education qualification?
38
Question: What is your current occupation?
Question: In which City category do you reside presently?
Majority of our survey’s respondents are from Tier-2 cities (49%). Tier-3 cities and rural
areas accounted for 13% and 4% of the total number of respondents respectively. When it
comes to family income, 53% of the respondents have a total household income greater than
8 lakhs per annum, indicating a high disposable income to spend on entertainment and other
needs. This is consistent with the earlier findings which stated that respondents rate OTT
platforms as high as cable TV on cost-effectiveness.
Question: What is your annual income (Rs)?
39
Question: What is your family income (Rs)?
Survey II: Analysing shift in consumer behaviour due to COVID-19 pandemic
A sample survey is presented in Exhibit 5. The survey begins with asking respondents on
their OTT viewing habits and moves on to compare popular OTT platform among the
responders and compare the data against OTT platforms for which they have purchased the
subscription.
The survey then asks whether the respondent observed any shift in pattern of their OTT
consumption. The survey further delves deeper into emerging trends of releasing Bollywood
movies directly onto the OTT platforms. After this, a set of questions are asked to know more
about the age, gender, demography, and family background of the respondent. This is done to
ascertain whether a correlation exists between demographic attributes and behavioural
patterns.
40
Findings
We received responses from 142 respondents selected from a representative sample of urban
OTT consumers.
Questions: How many hours did you spend on OTT platforms per day? (Before Lockdown)
To perceive how captivating OTT Channels were to consumers before lockdown. The above
inquiry was asked, the discovering reports that 18 percent uses it for more than 4 hours per
day. Over 45 percent of them seem to use up to 2 hours. 29 percent of customers devote 2-4
hours on OTT platforms.
Questions: Approximately by how many hours has your consumption increased or

decreased.
Amongst all the responders, 77% suggested that their consumption increased during the
lockdown while only 4% reported a decrease. As seen in figure, we see that 65% of the
respondents said their consumption increased by more than 2 hours, for the rest 35% the
consumption increases by 1 hours.
41
Questions: How many hours do you spend on OTT platforms per day? (After Lockdown)
Latest trends suggest that there has been significant increase in the consumption of OTT
content since the lock down started. The consumption pattern changed significantly in the last
six months. But when respondents were asked about the daily habits of OTT consumption
after the lockdown, 42% reported they watch OTT content for less than 2 hours in
comparison to 45% before lockdown. While 55% reported a watch time of more than 2 hours
which is significantly greater than pre Covid-19 behavior where 47% reported such behavior.
Questions: Which OTT platforms you watch often? (After Lockdown)
Other
Eros Now
ALT Balaji
Daily Motion
Sony Liv
Zee5
Apple iTunes
Voot
Netflix
Amazon Prime
Hotstar
YouTube
0% 20% 40% 60% 80% 100%
42
Questions: Which OTT platforms subscription have you purchased? (Before Lockdown)
Other
Eros Now
ALT Balaji
Daily Motion
Sony Liv
Zee5
Apple iTunes
Voot
Netflix
Amazon Prime
Hotstar
YouTube
0% 20% 40% 60% 80% 100%
Questions: Which OTT platforms subscription have you purchased? (After Lockdown)
Other
Eros Now
ALT Balaji
Daily Motion
Sony Liv
Zee5
Apple iTunes
Voot
Netflix
Amazon Prime
Hotstar
YouTube
0% 20% 40% 60% 80% 100%
While understanding the Indian consumer behaviour, we found it interesting to note that more
than 50% of the respondents have used more than one OTT platforms. Amazon prime,
Hotstar and YouTube are amongst the top 3 followed by Netflix. Out of total respondents
43
more than 70% subscribed to one or more OTT platforms. We were amazed to find that
percentage of respondents who subscribed to Hotstar and Amazon Prime increased
significantly where percentage of Netflix subscribers decreased post lockdown. We speculate
this might be due to high subscription cost which certain subscribers were not able to afford
during the pandemic.
Questions: Name the OTT platforms you started viewing (or time of viewing increased
significantly) during the lockdown? (You can choose multiple options)
Respondents were asked if they started to watch new OTT platforms during the lockdown,
more than two – third of the respondents suggested an inclination towards top 4 OTT
platforms in India. One unusual entry into this list is Voot, with more than 15% respondents
switching to the platform for entertainment. On further research, we attribute this outcome to
the release of blockbuster web series “Asur: Welcome to Your Dark Side” on Voot during the
lockdown.
Questions: Do you think mainstream movies should be released on OTT along with cinema?
44
Questions: In future, if a movie releases in Cinema and on OTT together, where would you
prefer to watch?
When respondents were requested to give their input if movies should be released on OTT
along with Cinema, more than 72% of them supported the idea. We further tried to enquire
about their preferences of watching a movie on OTT or cinema, more than 50% choose to
watch on OTT as compared to 32% who are willing to go to cinema. We tried to capture the
willing to pay of respondents who favoured OTT for new movie releases, it was found that on
an average user are willing to pay up to Rs 95 per movie.
45
Statistical Analysis [Survey I: Shift from cable TV to OTT]
One of the questions in our survey gave a set of 7 statements and asked the respondents to
select their level of agreement/disagreement with them. This was done to ascertain
consumer’s feelings toward cable TV and OTT. For example – one statement was “promotes
private and personal nature of viewing”. The respondent was asked to select an option from a
list of ‘Strongly Agree’, ‘Agree’, ‘Neutral’, ‘Disagree’ and ‘Strongly Disagree’. The same
question was asked for both TV and OTT to estimate the differences in opinion.
By building a multi-variate regression model on the dataset, we can predict how would an
individual feel about the various factors, such as ‘convenience’, ‘privacy and personal
viewing’, ‘cost-effectiveness’ etc. The demographic variables (age, gender, occupation, place
of residence, educational qualification, personal income, household income) can be used as
predictors of behaviour/attitude.
While our sample size would limit the applicability of our results in estimating the
consumer’s attitude accurately, what can be conclusively stated is the statistical significance
of the predictor variables.
We decided to pick 4 behavioural traits – convenience, privacy, quality/variety and cost.
The following statements in our survey captured these traits:
 Convenience: Provides convenience of time and place

 Privacy: Promotes private and personal nature of viewing
 Quality/Variety: Provides high quality and variety of content
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 Cost: Is cost-effective
Our model will not state how much importance a particular demographic, say retired elders
who stay in Tier-2 cities, gives to the above traits. However, it will tell us how that
demographic feels about cable TV and OTT vis-à-vis these traits and the significance of that
relationship.
Before we began building our model, we checked the predictor variables for multi-
collinearity. We did this using a simple bivariate correlation check to see whether any given
pair of variables had a high Pearson’s correlation. Using this method to perform a
multicollinearity test has some limitations, notably –
 There is no standard cut-off number that can be used to state confidently that
multicollinearity does not exist, and variances won’t be inflated
 It can be the case that while no two variables exhibit a high degree of correlation, a
linear combination of three or more variables are still multicollinear
Personal Household
Gender Age Education Occupation City Tier
income income
Gender 1.000
Age -0.019 1.000
Education 0.060 -0.114 1.000
Occupation 0.147 0.624 -0.187 1.000
City Tier 0.214 0.203 -0.386 0.129 1.000
Personal income -0.220 0.303 0.030 0.129 -0.186 1.000
Household income 0.040 -0.013 0.416 0.274 -0.238 0.203 1.000
As can be observed, there is only one pair (age and occupation) where the correlation is
higher than 0.40. As the correlation is 0.624 and not very high, we can safely ignore this and
move ahead with building the model. However, an interesting observation here is that we do
not observe a high positive correlation between personal and household income (0.203). As
personal income is a contributor to household wealth, this seems surprising. But a closer look
reveals that our sample is over-indexed on students. Since students predominantly have no
sources of income, we do not observe a correlation between the two variables.
Significance testing #1 (cable TV)
Dependent Variable: Convenience
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Regression Statistics
Multiple R 0.444097187
R Square 0.197222312
Adjusted R Square 0.113350016
Standard Error 1.083315796
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 3.006 0.881 3.413 0.001 1.248 4.764 1.248 4.764
Gender -0.371 0.279 -1.329 0.188 -0.927 0.186 -0.927 0.186
Age -0.120 0.178 -0.672 0.504 -0.476 0.236 -0.476 0.236
Education -0.297 0.175 -1.700 0.094 -0.647 0.052 -0.647 0.052
Occupation 0.324 0.131 2.476 0.016 0.063 0.586 0.063 0.586
City Tier -0.029 0.186 -0.153 0.879 -0.401 0.344 -0.401 0.344
Personal Income -0.031 0.098 -0.314 0.755 -0.227 0.165 -0.227 0.165
Household Income 0.341 0.120 2.852 0.006 0.102 0.580 0.102 0.580
The coefficient for ‘Household Income’ is 0.341 and its p-value is <0.1, meaning that
household income is a statistically significant predictor of attitude towards cable TV when it
comes to convenience. Individuals with higher household income tend to agree strongly that
cable TV provides a high level of convenience of time and place. ‘Occupation’ is also a
significant predictor (coefficient of 0.324 and p-value <0.1). Higher scores on occupation (in
our rating scale, this translates to greater availability of free time) correlate strongly with
ratings on convenience. Common understanding dictates that those with more leisure time
would consider cable TV as convenient, and that is what our results show as well.
‘Education’ correlates negatively (-0.297 coefficient) meaning that consumers with higher
education levels tend to find cable TV inconvenient.
Statistically significant predictors: Education, Occupation, Household Income
Significance testing #1 (OTT)
Dependent Variable: Convenience
48
Multiple R 0.224
R Square 0.050
Adjusted R Square -0.057
Intercept 4.521 0.682 6.628 0.000 3.157 5.884 3.157 5.884
Gender -0.222 0.211 -1.052 0.297 -0.643 0.200 -0.643 0.200
Age -0.075 0.137 -0.551 0.584 -0.349 0.198 -0.349 0.198
Education 0.082 0.131 0.627 0.533 -0.180 0.344 -0.180 0.344
Occupation -0.029 0.099 -0.297 0.767 -0.227 0.168 -0.227 0.168
City Tier 0.138 0.140 0.984 0.329 -0.142 0.418 -0.142 0.418
Personal Income -0.003 0.075 -0.046 0.963 -0.153 0.146 -0.153 0.146
Household Income -0.037 0.093 -0.395 0.694 -0.222 0.149 -0.222 0.149
None of the independent variables have p-values greater than 0.1. Hence, demographic
differences do not account for how consumers perceive the convenience of OTT platforms.
Another thing to note here is that close to 95 percent of the variability of the model is not
accounted by the seven predictors that we have used, implying that further studies need to be
conducted to ensure an optimate variable choice set.
Dependent Variable: Privacy
Multiple R 0.384
R Square 0.148
Intercept 2.077 0.846 2.454 0.017 0.388 3.765 0.388 3.765
Gender -0.421 0.268 -1.571 0.121 -0.956 0.114 -0.956 0.114
Age -0.196 0.171 -1.143 0.257 -0.538 0.146 -0.538 0.146
Education 0.054 0.168 0.322 0.749 -0.281 0.390 -0.281 0.390
Occupation 0.334 0.126 2.654 0.010 0.083 0.585 0.083 0.585
City Tier 0.214 0.179 1.197 0.236 -0.143 0.572 -0.143 0.572
Personal Income 0.016 0.094 0.164 0.870 -0.173 0.204 -0.173 0.204
Household Income 0.193 0.115 1.677 0.098 -0.037 0.422 -0.037 0.422
‘Occupation’, with a p-value of 0.01 shows statistically significant relationship with attitudes
towards privacy. As the coefficient is 0.334, the highest among all the predictor variables, it
can be stated that retired and voluntarily unemployed consumers tend to agree strongly with
the statement that cable TV allows for private viewing. Essentially, this means that this
segment would not prefer switching to OTT platforms primarily because of privacy concerns.
49
We also observe ‘Household Income’ to be significant at ~90% confidence, but not at 95%
confidence. Hence, we can conclude that household income is a weaker predictor than
occupation when it comes to satisfaction with cable TV on matters of privacy. Further tests
on different samples would have to be carried out to establish this relationship with greater
confidence.
Dependent Variable: Privacy
Multiple R 0.281
R Square 0.079
Adjusted R Square -0.025
Intercept 4.485 0.583 7.688 0.000 3.319 5.652 3.319 5.652
Gender 0.182 0.180 1.006 0.318 -0.179 0.542 -0.179 0.542
Age -0.064 0.117 -0.544 0.588 -0.298 0.170 -0.298 0.170
Education 0.005 0.112 0.041 0.968 -0.220 0.229 -0.220 0.229
Occupation -0.111 0.085 -1.308 0.196 -0.280 0.058 -0.280 0.058
City Tier -0.044 0.120 -0.366 0.716 -0.283 0.196 -0.283 0.196
Personal Income 0.065 0.064 1.024 0.310 -0.062 0.193 -0.062 0.193
None of the independent variables are good predictors of an individual’s attitude towards
privacy (for OTT) with strong confidence. The strongest predictor is ‘occupation’, but at 80%
confidence, the relationship is inconclusive.
Dependent Variable: Quality/Variety
Multiple R 0.402
R Square 0.162
50
Intercept 3.342 0.748 4.467 0.000 1.849 4.836 1.849 4.836
Gender -0.363 0.237 -1.532 0.130 -0.836 0.110 -0.836 0.110
Age -0.298 0.151 -1.966 0.053 -0.600 0.005 -0.600 0.005
Education 0.036 0.149 0.239 0.812 -0.261 0.332 -0.261 0.332
Occupation 0.307 0.111 2.754 0.008 0.084 0.529 0.084 0.529
City Tier 0.126 0.158 0.793 0.431 -0.191 0.442 -0.191 0.442
Personal Income 0.110 0.083 1.323 0.190 -0.056 0.277 -0.056 0.277
‘Age’ and ‘occupation’ correlate strongly with the satisfaction users have with the quality and
variety of content available on cable TV. Those who are older and are voluntarily
unemployed (such as housewives) or retired, feel that the diversity of content available on
cable TV is good enough for their viewing.
Dependent Variable: Quality/Variety
Multiple R 0.412
R Square 0.170
Intercept 4.569 0.542 8.428 0.000 3.485 5.653 3.485 5.653
Gender 0.049 0.168 0.292 0.771 -0.286 0.384 -0.286 0.384
Age -0.105 0.109 -0.969 0.336 -0.323 0.112 -0.323 0.112
Education 0.101 0.104 0.974 0.334 -0.107 0.310 -0.107 0.310
Occupation -0.121 0.079 -1.545 0.127 -0.278 0.036 -0.278 0.036
City Tier -0.052 0.111 -0.464 0.644 -0.274 0.171 -0.274 0.171
Personal Income 0.074 0.059 1.241 0.219 -0.045 0.192 -0.045 0.192
We do not observe any strong correlation between the predictor variables and the outcome
variable in determining the attitude of users towards quality and variety of content available
on OTT platforms.
Dependent Variable: Cost
Multiple R 0.315
R Square 0.100
51
Intercept 2.704 0.867 3.119 0.003 0.974 4.434 0.974 4.434
Gender -0.170 0.275 -0.620 0.537 -0.718 0.378 -0.718 0.378
Age -0.011 0.175 -0.065 0.948 -0.362 0.339 -0.362 0.339
Education 0.054 0.172 0.315 0.754 -0.289 0.398 -0.289 0.398
Occupation 0.183 0.129 1.423 0.159 -0.074 0.441 -0.074 0.441
City Tier -0.111 0.184 -0.607 0.546 -0.478 0.255 -0.478 0.255
Personal Income -0.043 0.097 -0.443 0.659 -0.236 0.150 -0.236 0.150
Only ‘Household Income’ is a statistically significant predictor (p-value of 0.079) of attitude

towards cost-effectiveness of cable TV. A coefficient of 0.21 indicates that an increase in
household income relates to stronger perceived ‘value-for-money’ for cable TV.
Dependent Variable: Cost
Multiple R 0.401
R Square 0.161
Intercept 2.813 0.937 3.001 0.004 0.939 4.686 0.939 4.686
Gender -0.414 0.290 -1.428 0.158 -0.993 0.166 -0.993 0.166
Age -0.304 0.188 -1.618 0.111 -0.680 0.072 -0.680 0.072
Education 0.347 0.180 1.925 0.059 -0.013 0.707 -0.013 0.707
Occupation 0.343 0.136 2.522 0.014 0.071 0.614 0.071 0.614
City Tier 0.403 0.192 2.093 0.040 0.018 0.787 0.018 0.787
Personal Income -0.074 0.103 -0.718 0.476 -0.278 0.131 -0.278 0.131
When it comes to perception of cost-effectiveness of OTT platforms by individuals, we

observe that ‘City Tier’, ‘Occupation’ and ‘Education’ are excellent predictors of this
behaviour, with the three variables having p-values of 0.04, 0.014 and 0.059 respectively.
Additional Note:
In the significance tests conducted above, we can observe that the r-squared value is low, at
around 0.15-0.20. At the same time, we also see that some of the predictor variables have a
statistically significant relationship with the outcome variable. Statistical significance implies
that changes in the predictor variable corresponds to a shift in the dependent variable. A high
r-squared value means that our model is able to explain a good chunk of the variability in the
dependent variable.
A combination of significant results with a low r-squared value essentially means that the
predictor variables are correlated with the outcome variable, but they do not explain most of
52
the variability in the outcome. Hence, a low r-squared figure by itself does not discount the
statistically significant relationship.
Conclusion
We observe that OTT platforms, on an average, provide a much higher degree of control and
private viewing along with convenience. However, as our analysis indicates, certain segments
of the population such as housewives and retired people are satisfied with the convenience
offered by traditional TV too. Hence, these segments are not drawn to OTT services on
53
factors of convenience and privacy alone. It is the younger segments who report the biggest
increase in satisfaction for factors related to convenience, privacy and variety when they
switch to OTT.
As the uncaptured market for the millennials and Generation Z declines, OTT platforms
would have to devise innovative ways to increase their market share and reach out to other
segments. Our results indicate that sentiment towards cable TV is more favourable in Tier-2/3
cities and small towns. Hence, OTT platforms serve as a complementary addition to the
regular sources of entertainment in these places and do not act as a substitute. The behaviour
of ‘cord-cutting’ that is frequently cited in the media to portend the demise of traditional TV
is incorrect, as far as Indian consumer’s behaviour is concerned.
The popularity of platforms like YouTube and Hotstar, especially in smaller cities, is majorly
attributed to their business model (freemium) and ease of accessibility. We also see that
regional OTT providers have failed to make a significant dent in the Indian streaming market.
Surprisingly, consumers prefer watching vernacular content on big-name platforms rather
than local OTT services (popularity of Telugu movies on Prime Video being an example).
Our regression model also indicates that demographic variables account for less than one-
fourth of the variability observed in consumer attitude towards cable TV and OTT. Hence,
any segmentation done purely on demographic variables (as can be seen in the available
industry reports) is bound to mis-represent viewing preferences and habits. This goes on to
show that no two customers within a segment are strictly alike, and OTT platforms would
have to increasingly rely on personalization and customization to suit the needs of their
consumer base. Personalization can be provided by giving better content recommendations.
Customization can be provided by allowing for more privacy control, greater number of
subscriptions plans etc.
The success of Hotstar in India (with over 300 million Monthly Active Users) shows that it is
not technology or recommendations alone that drive a platform’s growth. Contrary to the
developed market, Indian consumer needs an anchor around which their OTT experience is
built. Our results hint that for many, this anchor is word-of-mouth. When some new content
becomes viral and is watched by many, OTT platforms witness higher adoption rates (Hotstar
achieved outsized appeal due to IPL matches being streamed live on the platform). The
strong network effects due to viral/popular content is more important in India than in other
markets. Outcomes of our experiment and survey II, also validate above mentioned theory.
54
Significant adoption of Voot can be attributed to the sole block buster web series called Asur:
Welcome to Your Dark Side, which got viral during the pandemic and attracted masses to the
platform. Certain responses also suggested that customer retention of top OTT platforms
depends greatly on its recommendation engine. Millennials and Generation Z who spend
plenty of great amount of time on such platforms, prefers to stick to OTT platforms who
recommend content according to their interest. Results suggest that Netflix has top class
recommendation engine which helps it stand out from other platforms and demand premium
from consumers.
During the lockdown, consumption of OTT content increased inorganically for multiple
platforms like Hotstar, YouTube, Amazon Prime, etc. In most cases, the trend was visible in
terms of increase in number of subscribers for most OTT channels except Netflix. Results
suggest that while average consumption doubled per person, people left the platform.
Massive cause for such behaviour could be high priced subscription plans of Netflix. The
total sum up cost of top 4 OTT platforms is still less than that of Netflix. For price conscious
Indian consumers, Netflix need to change its strategy if it was to increase its penetration in
Indian subcontinent. Therefore, the need for OTT platforms to regularly create content that
can capture the consumer’s attention with affordable plans in a fragmented market is a sure-
fire way to increase market share.
Exhibits
EXHIBIT 1: Netflix Business Model Canvas
55
EXHIBIT 2: Disney+ Business Model Canvas
EXHIBIT 3: Sample questionnaire for In-Depth Interviews
In-depth interviews conducted were laddering in nature, following are common question
which were asked during the interviews:
56
 Do you have electronic devices like television, mobile, laptop, etc?
 Do you watch television?
 Which DTH or cable subscription do you have?
 What kind of genre you prefer to watch on television?
 Have you ever used any OTT application?
 Which all applications have you used?
 Which mode do you prefer for viewing TV or OTT?
 Why do you favour one over the other? What are the major contributing factors
behind your decision?
 Have your viewing habits changed during the lockdown?
 Would you like to spend more time for your entertainment?
 What are the key pain points resisting you?
 What all OTT platforms have you subscribed to?
 What content you prefer to watch on OTT?
 What factors contribute towards the content you consume?
 Do you watch new released movies in cinemas?
 Would you prefer watching them OTT?
57
EXHIBIT 4: Sample questionnaire (Transition from traditional TV to OTT)
58
If ‘Yes’ to the above question, then –
59
If ‘No’ to the question highlighted in red box, then –
60
Common set of follow-up questions for the two branches -
61
62
EXHIBIT 5: Sample questionnaire (Analysing shift in consumer behaviour due to COVID-
19 pandemic)
How many hours do you spend on OTT platforms per day?

1. 0 - 2 hours
2. 2 - 4 hours
3. 4+ hours
Which OTT platforms you watch often? (You can choose multiple options)
1. YouTube
2. Hotstar
3. Amazon Prime
4. Netflix
5. Voot
6. Apple iTunes – For Video Purchase
7. Zee5
8. Sony Liv
9. Daily Motion
10.ALT Balaji
63
11.Eros Now
12.Other __________
Have you purchased membership or subscription of any OTT channel?

1. Yes
2. No
Which OTT platforms subscription have you purchased? (You can choose multiple options)
1. YouTube
2. Hotstar
3. Amazon Prime
4. Netflix
5. Voot
7. Zee5
8. Sony Liv
9. Daily Motion
10.ALT Balaji
11.Eros Now
12.Other __________
Is there any change in your OTT usage since the lockdown?

1. Increased
2. Decreased
3. No change
Approximately by how many hours has your consumption increased or decreased.

1. 1 Hour
2. 2 Hours
3. 3 Hours
4. 4 Hours
5. 5 Hours
6. 6 Hours
64
Name the OTT platforms you started viewing (or time of viewing increased significantly)
during the lockdown? (You can choose multiple options)
1. YouTube
2. Hotstar
3. Amazon Prime
4. Netflix
5. Voot
7. Zee5
8. Sony Liv
9. Daily Motion
10.ALT Balaji
11.Eros Now
12.Other __________
Have you ever preferred waiting for a movie to release on OTT rather than watching it in the
cinema?
1. Always
2. Many times
3. Never
Do you think mainstream movies should be released on OTT along with cinema?
1. Yes
2. No
In future, if a movie releases in Cinema and on OTT together, where would you prefer to
watch?
1. OTT
2. Cinema
3. Doesn’t Matter
What is your willingness to pay to watch a new release on OTT platform?
65
Rs ❏
What is your gender?

1. Male
2. Female
3. Transgender
What is your age group?

1. Under 15
2. 15-22
3. 22-32
4. 32-45
5. Above 45
What is your current occupation?

1. Student
2. Business Owners (Self Employed)
3. Salaried
4. Retired/ Pensioner
5. Voluntary Unemployment (Housewives, Househusbands etc.)
In which City category, your reside at present?

1. Tier 1 Cities ( Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai,
Ahmedabad, Pune)
2. Tier 2 Cities ( Like Gurgaon, Bhubaneswar, Jamshedpur, Ranchi, Tiruchirappalli,
Srinagar, Surat, Jaipur, etc)
3. Tier 3 Cities
4. Rural India
What is your annual income (Rs)?

1. Not applicable
2. 0 - 50,000
3. 50,001 – 2,50,000
66
4. 2,50,001 – 8,00,000
5. 8,00,000 +
67
Appendix: Major findings from recent articles/reports that is not covered in Literature Review
# Title of report/article Link Findings

Singtel recently decided to close down Hooq (a streaming platform) as it wasn't able to
Hooq's downfall: find a viable business model
https://www.campaignasia.com/article/hooqs
Can other OTT
1 -downfall-can-other-ott-platforms-avoid-the-
platforms avoid the same-fate/459222
Hooq had changed its model in order to target the masses, by using a 'freemium' model
same fate? instead of a subscription based one. However, due to high content costs and unwilling of
emerging-market consumers to pay, the service lost money.
The current pandemic has accelerated the trend of providing free content in a bid to get
consumers to spend more time with the streaming platform and finally spend on
subscription plans
Covid-19: Streaming https://www.livemint.com/news/india/covid-
services experiment 19-streaming-services-experiment-with-free- Another way of monetising is through incorporating ads and selling consumer data. Some
2
with free offers as offers-as-people-stay-home- feel that Indian consumers are willing to consume ads and share their personal data for a
11585036708397.html
people stay home reduced subscription cost
Pay-per-use instead of monthly subscription plans can also be looked into as an alternative
revenue model in India, as per recent research
Most free subscribers https://www.business-
62% of respondents to a survey stated that they'd be willing to switch from being a free
of music OTT apps standard.com/article/companies/most-free-
3 user to a paid one if the subscription costs less than 25 rupees a month, and gives them the
ready to try paid subscribers-of-music-ott-apps-ready-to-try-
paid-models-report-120040601201_1.html option to download content and an ad-free experience
models
4 Rise of on-demand https://www2.deloitte.com/content/dam/Del Around 75% of Indian internet users are <35 years old
oitte/in/Documents/technology-media-
68
On average, Indian internet users spend 14% of their time and 17% of monthly spending
on entertainment. Users care more about having access to a wider library than owning the
telecommunications/in-tmt-rise-of-on- content forever
content
demand-content.pdf
The most popular subscription model is giving a vast catalogue for free to consumers
(with advertisements) and charging them for premium catalogue. Examples include
Hotstar and Spotify
The impact of
Covid-19 on the https://www.zdnet.com/article/the-impact- OTT video streaming subscription rates grew by 7x in March '20 YoY. However, this rate
5
subscription of-covid-19-on-the-subscription-economy/ fell drastically for sports-only subscription plans
economy
6 Netflix is losing to https://www.businessinsider.in/business/new Over 16 million Indians login to Hotstar everyday. For Netflix, the number is only 1.7
s/netflix-is-losing-to-hotstar-zee5-amazon-
homegrown OTT million.
prime-video-india-as-the-country-remains-
players in India
addicted-to-soaps-and-
movies/articleshow/74111720.cms Netflix is finding it difficult to compete against legacy content creators such as Zee5,
SunNXT due to less amount of content available. Zee5 boasts 1153 shows with 3147
movies, SunNXT has 390 shows with 4087 movies while Netflix only has 82 shows with
789 movies in Indian languages
Netflix is also facing tough competition against Prime Video. Amazon is following a
strategy where it is quick to stream South Indian movie releases and therefore has built a
sizable subscriber base in South India.
69
However, when one looks at the financials, Netflix fares much better in terms of profits.
Netflix reported an increase of 700% growth in its India revenue in 2019 to 466 cr, with a
profit of 5.1 cr. Whereas, Hotstar's losses widened by 42.5% to 554 cr. Zee5's profits grew
by 6.7% to 412 cr.
Western programming only commands a minuscule half a percent share of viewership on
Indian television, compared with over 60 percent for domestic entertainment. Similarly,
Hollywood and foreign films manage a less than 10 percent share at the box office.
Netflix didn't cater to the semi-urban, rural crowd and also lost its appeal to the younger,
urban market as it didn't offer the same content library in India as it does in the US and
How Netflix lost big https://www.wired.com/2017/01/how-
7 other developed markets. <15% of the titles available on Netflix US is available for
to Amazon in India netflix-lost-big-to-amazon-in-india/
streaming in India
While other players such as Amazon have kept their services price-competitive (Prime
Video is offered at $15/year in India as part of Prime; the service costs $99/year in US),
Netflix didn't lower their prices for the Indian market ($7.5/month in India against
$10/month in US)
8 Mobile Marketing https://bestmediainfo.com/2020/02/entertain 451mn active users in India. Internet penetration is around 36%.
ment-is-the-purpose-for-84-of-45-crore-
Ecosystem Report
active-mobile-internet-users-says-mobile-
2020 1.16 bn mobile subscribers in India; around 700 million unique ones
marketing-ecosystem-report-2020/
The time spent on mobile devices has also increased 3.7 hrs a day (an increase of 25%
compared to 2017)
70
Globally, data charges stand at USD 8.53 per GB. In India, much cheaper at USD 0.26 per
GB
Over 84% mobile active users claim entertainment to be the primary purpose of internet
Entertainment companies still rely heavily on print advertising, with ~40% of their
advertising revenue spent on the same.
Entertainment firms https://www.livemint.com/news/india/entert Newspapers also become more important when the target customer belongs to Tier 2 and 3
9 use print media to ainment-firms-use-print-ecosystem-to-woo- areas
woo audiences audiences-11582133211185.html
It is believed that message retention through print media is greater due to the relatively
scarce and limited amount of print media ads when compared to the annoying presence of
digital ads everywhere
Future-proofing 20% viewership rise in digital streaming platforms and an even higher 37% increase in TV
media and https://timesofindia.indiatimes.com/blogs/th viewership during Covid19
entertainment: What e-abstract-truth/future-proofing-media-and-
10
India can learn from entertainment-what-india-can-learn-from- The Indian govt. has classified 'Media & Entertainment' as a champion sector. The scheme
south-korea-and-singapore/
South Korea and aims to increase service exports from India. The budget for the scheme’s implementation
Singapore is 5000 cr.
India's OTT industry increased by 240% between 2016 and 2019.
The billion-dollar
opportunity the https://yourstory.com/2020/05/billion-dollar-
11 ~14 million consumers are expected to consume entertainment through 'digital only'
Indian OTT industry opportunity-indian-ott-industry-missing
means. 363 million consumers would use bundled content (TV + telco-bundled content)
is missing
by 2022.
71
55% of Indians
https://brandequity.economictimes.indiatime
prefer OTT 31% of Indian consumers, preferred to watch original and platform exclusive content
s.com/news/media/55-of-indians-prefer-ott-
12 platforms vs 41% (Web Series /short films). Sports was the choice for 30%, movies at 19% and TV shows at
platforms-vs-41-that-still-prefer-dth-
that still prefer DTH: momagic-survey/70858815 18%.
MoMAGIC survey
The digital segment is the fastest growing segment in the Indian Media & Entertainment
industry (growing by 43.4% YoY in 2019)
The primary way to generate revenues for OTT platforms has traditionally been through
advertising revenues. However, as the cost of creating original content increases,
platforms are looking at other avenues for revenues. Some innovative pricing tactics are
India's Media and https://assets.kpmg/content/dam/kpmg/in/pdf sachet pricing, content bundling, regional packs etc. However, the key challenge to such
13 Entertainment /2019/08/india-media-entertainment-report- monetisation measures is availability of affordable cable subscription on TV, price
Report 2019 2019.pdf sensitivity, content fragmentation and consumer readiness. To combat these concerns,
OTT platforms go the collaboration/syndication route, with partnerships across telcos,
DTH operators, cab aggregators and other hardware platforms.
Some platforms have experimented with interactive content to engage with viewers.
Example - Black Mirror Bandersnatch on Netflix and social interaction features when
watching IPL matches on Hotstar
14 India's Streaming https://thenextweb.com/in/2020/02/07/indias 200m listeners use music streaming platforms in India. Gaana (over 150m monthly active
-streaming-music-market-is-now-200-
Music Market is users) and JioSaavn (100m MAU) top the list in terms of popularity
million-strong-but-hardly-anyones-paying-
Now 200 Million
for-it/
Strong But Hardly Times Internet’s CEO, Gautam Sinha, says that “Gaana has more than 2 million paid
72
subscribers of its premium service, Gaana+”. Service costs 99 rupees a month and gives
users the feature to download songs for offline consumption.
Anyone's paying For

Spotify charges 119 rupees/month while rest of competitors like Jio Saavn, YouTube
It
Music and Apple Music charge the same as Gaana
Late last year, YouTube had 0.8 million paying subscribers in India.
About 55 per cent of OTT users come from the five metro cities, with Tier-1 cities
accounting for another 36 per cent.
How OTT content is https://www.theweek.in/news/biz-

The top five metros account for more than 65 per cent users of Amazon and Netflix.
15 consumed across tech/2019/06/20/how-ott-content-is-
India consumed-across-india.html
While Sony LIV was the topper when it came to Tier-1 cities, ErosNow has the largest
share (59 per cent) of its users in the 25-39 age bracket in Tier II/III cities. Voot has the
highest penetration of female users.
16 Streaming services https://www.bloombergquint.com/gadfly/net While Netflix’s annual rate of churn, or customer turnover, is 10% to 20%, it may be as
flix-s-cash-bonfire-won-t-work-for-disney-
face an economic high as 50% for other streaming services.
hulu-comcast
reckoning after
covid-19 >40% of US consumers who had recently signed up for a streaming service said that they
would use it more than their present consumption rate after life returns back to normal in a
post-covid19 world.
Companies can try 3 ways to ensure market share - ad-based freemium model, bundling
content in partnership with other content producers/services and finally, making the
73
platform a two-way, interactive platform - wherein users can comment, share and discuss
their favourite shows/music/movies
New platforms are entering the mix - launch of Quibi and Peacock (owned by Comcast)
After Coronavirus, https://www.bloomberg.com/opinion/articles
/2020-04-14/coronavirus-will-leave-
17 Entertainment Will
entertainment-world-changed-forever? Even though Quibi isn't backed by major media giants, it witnessed 1.7m downloads in the
Never Be The Same sref=jO7iaJLA
first week
Netflix added 15.8m new subscribers in Q1 2020 and 10m in Q2 '20
Spotify CEO said "Every day looks like a weekend", referring to the changed consumption
patterns of customers. Previously, most services expected a spike in the morning and
evening, and a lull in the afternoon during the weekdays. During weekends, the spike in
Content consumption https://medium.com/@LauraChau/content-
consumption-habits-in-the-age-of-covid- viewing occurred in the afternoon. Post Covid19, every day is showing the same trend as
18 habits in the age of
beyond-just-netflix-while-you-work- the pre-Covid weekend.
Covid19 aef639b4e912
Increase in popularity of co-streaming, such as Netflix Party
OTT services are ensuring that their apps are available on as may platforms as possible,
including PS4, Switch and other media devices
19 Streaming TV is https://www.theguardian.com/tv-and- Many owners of popular TV shows are not renewing rights as they aim to capture the
radio/2019/jun/27/streaming-tv-is-about-to-
about to get very lucrative streaming market with their own offerings. This will fragment the market and
get-very-expensive-heres-why
expensive hence marks the end of the golden era of streaming.
NBCUniversal is removing shows from Netflix as it plans to entice viewers to its own
platform, Peacock. Friends has already disappeared from Netflix and is aimed to be
74
released on Warner Media’s own streaming platform that will cost $15/month.
In the past few years, people have lamented over the overabundance of choice available in
terms of quality content. This is about to change. Money, not time will become the new
limiting factor.
The Netflix model has proved great for viewers, but it probably won’t survive for long.
The content creators are getting greedy and scared, which is why they are taking their
shows off and pushing it on their own platforms, resulting in a split in the subscriber base.
The providers will have to recoup the money they are spending to take on Netflix – such
as the $500m that NBCUniversal spent to get The Office back, the $250m Amazon is
spending on a Lord of the Rings series and the $500m that Warner just spent to win the
services of JJ Abrams – which means that subscription prices will rise
75
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http://www.warc.com.iima.remotexs.in/content/article/warc-datapoints/ott-advertising-
doubles-its-share-of-digital-impressions/132727
BroadbandTechReport (April, 2018) OTT more a complement than a competitor to pay TV

https://www.broadbandtechreport.com/wireless/multiscreen/article/16449793/ott-more-a-
complement-than-a-competitor-to-pay-tv
ET Brand Equity (August, 2019) 55% of Indians prefer OTT platforms vs 41% that still
prefer DTH: MoMAGIC survey
https://brandequity.economictimes.indiatimes.com/news/media/55-of-indians-prefer-ott-
platforms-vs-41-that-still-prefer-dth-momagic-survey/70858815
Euromonitor (June, 2020) Digital disruptors: The global competitive landscape of digital
streaming services, WARC
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disruptors-the-global-competitive-landscape-of-digital-streaming-services/133733
Financial Times (November, 2019) Malaysian OTT market looks beyond subscriptions, FT
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prices-subscriber-survey-1234697737/
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https://www.forbes.com/sites/jessicabaron/2019/07/03/the-key-to-gen-z-is-video-
content/#5da799893484
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Evolution of The Entertainment Ecosystem in India and Challenges Ahead

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Evolution of the Entertainment Ecosystem in India

and Challenges Ahead

PROJECT COURSE: TERM IV

Mentor: Prof. Sanjay Verma

Abhishek Kumar (19102)

Pratyush Kumar (19348)

Indian Institute of Management Ahmedabad

Business Models, Key factors and Growth Areas 10

Consumer Behavior and Usage Patterns 20

Primary Research & Findings 25

Time has led to transformation of entertainment repeatedly, whereas most form of

What are OTT media services?

Service providers of an OTT can be well-defined as a facility provider presenting ICT

Emergence of OTT Services

Figure 5: Different Types of Content developed and syndicated by OTT platforms

Monetize with the right model

 AVOD – Advertising Video on Demand

Disadvantages: Advertisements usually ruins overall customer experience. It can possibly

 TVOD - Transaction Video on Demand

 SVOD – Subscription Video on Demand

 Hybrid Video on Demand

Disadvantages: Not exactly a disadvantage, but a weakness is customer retention. If users do

Key Differentiators of an OTT Platform

 Understanding Customer Behaviour

 Distribution, Promotion & Marketing

 Setting the right price point

 Improving connectivity and fall in data prices

 Increased smartphone penetration

 Increase in supply of content

The demographics of consumers is also witnessing a transformation. In 2016, 29 percent of

Typical Classification of Consumers Based on Their Behaviour

Indian Consumer Usage Patterns

2) A set of in-depth interviews to understand shift in consumer behaviour and their

Respondents were chosen to be as representative of users of traditional TV and OTT

Selection of Respondents for Surveys

Online questionnaires were created and circulated on digital communication platforms to

Selection of Participants for Experiment

Data Analysis Adopted

The details of the 20 interviews are tabulated below:

S Age Gender Occupation Income Bracket Location

1. Happy – When a person is happy, he likes to watch content which is trending or

Insights from the experiment

Survey I: Analysing why consumers shift from television to OTT

Question: What is your age group?

Question: What is your highest education qualification?

Question: In which City category do you reside presently?

Question: What is your annual income (Rs)?

Survey II: Analysing shift in consumer behaviour due to COVID-19 pandemic

Questions: Approximately by how many hours has your consumption increased or

Questions: Which OTT platforms you watch often? (After Lockdown)

0% 20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100%

We decided to pick 4 behavioural traits – convenience, privacy, quality/variety and cost.

The following statements in our survey captured these traits:

 Convenience: Provides convenience of time and place

Significance testing #1 (cable TV)

Dependent Variable: Convenience

Statistically significant predictors: Education, Occupation, Household Income

Significance testing #1 (OTT)

Dependent Variable: Convenience

Significance testing #2 (cable TV)

Dependent Variable: Privacy

Significance testing #2 (OTT)