The Indian OTT landscape is rapidly evolving, driven by market consolidation, shifting revenue models, and innovative content strategies. According to the latest FICCI-EY report, several trends are shaping the future of the industry.
I. M&A Activity and Strategic Partnerships on the Rise
Mergers, acquisitions, and collaborations are set to accelerate as smaller and regional OTT platforms seek to optimize content portfolios while managing marketing and operational expenses.
- Smaller players will increasingly adopt Transactional Video-on-Demand (TVOD) models, enabling films that did not secure an initial OTT release to reach audiences through alternative streaming platforms.
- Partnerships between platforms, content creators, and distributors will become more common as companies work toward improving profitability and audience reach.
II. Increased Focus on Subscription Revenues
With India’s digital ad rates significantly lower than global benchmarks and rising content production costs, OTT platforms relying solely on ad revenues are facing profitability challenges.
- To address this, platforms are expected to push subscription-based models by offering exclusive and premium content.
- New monetization strategies will emerge, including discounted linear and OTT bundles that help retain TV audiences while growing OTT penetration.
- Differentiation through exclusive content, personalized experiences, and dynamic pricing models will be key to driving subscription growth.
III. Enhanced Asset Monetization and Exploitation
OTT platforms are moving towards a 360-degree content monetization approach, expanding revenue streams beyond traditional video streaming.
- Franchise content and intellectual property (IP) will be leveraged across multiple platforms, including Free TV, gaming, music, and merchandising.
- Multi-window content distribution will become a norm, with premium content being released across platforms like YouTube, Meta, e-commerce portals, and Direct-to-Consumer (D2C) platforms alongside mainstream OTT apps.
- The TV++ cost model will gain traction, focusing on increased episode counts while keeping investment levels steady, thereby maximizing audience engagement.
- Innovative film windowing strategies will emerge, offering super-premium SVOD options alongside theatrical releases in select markets.
IV. Evolution in Content Performance Measurement
As digital and linear TV audiences merge, measurement metrics must evolve to provide a more comprehensive performance analysis.
- Content success will be measured using a hybrid digital-linear model, aggregating viewership across multiple platforms.
- Performance-based content deals will become standard, with incentives tied to total consumption across digital and linear formats.
- Advertisers will demand standardized Cost Per Mille (CPM) metrics across digital and traditional media, pushing agencies to adopt trans-media advertising models.
V. Customer-Centric Content Discovery
With an increasing number of OTT platforms, discoverability remains a key challenge. Platforms will focus on improving user experience through AI-driven content discovery mechanisms.
- Cross-platform recommendation engines will gain popularity, helping users navigate content across multiple OTT services seamlessly.
- A common user interface (UI) on connected TVs will emerge as valuable digital real estate, generating carriage and placement revenues for aggregators.
Challenges and Opportunities in News OTT
The report highlights that News OTT ad revenues will continue to face challenges unless platforms build loyal app-based audiences. Key developments include:
- The potential emergence of an industry-wide news app to consolidate customer acquisition efforts and enhance lifetime value.
- Platforms with high web-based or transient traffic (e.g., online news portals) will encourage app downloads and explore strategic collaborations for audience engagement.
- The shift from platform-based to creator-based models will define the next phase of news media, though this transition may drive up talent costs.
Growth Projections and Market Trends
The Indian video OTT market is poised for substantial growth:
- Household penetration is expected to rise from 47 million in 2024 to 65 million in 2027.
- Total OTT subscriptions are projected to reach 144 million by 2027, with an average of 2.2 subscriptions per household.
- Bundling of OTT services by ISPs and telcos will scale up, mirroring the role previously played by Distribution Platform Operators (DPOs) in the television industry.
- JioHotstar is positioned to be the universal “first subscription pack,” particularly due to its expansive film library and premium sports content, with IPL pricing playing a crucial role in driving adoption.
Content Trends and Audience Preferences
- Bundling strategies could push total OTT subscriptions to 10–11 million by 2027.
- Genre diversification will be crucial, as over 60% of current content is focused on crime and action. Expect a rise in content catering to women, youth, and elderly audiences in 2025 and 2026.
- Freemium models will be tested, but India’s low ad rates may need correction for sustainability.
India’s OTT ecosystem is entering a transformative phase, with subscription-based models, aggressive bundling, and innovative content monetization strategies shaping the future. Platforms that successfully differentiate themselves and secure top-tier consumer preference will emerge as long-term market leaders.
