Mumbai: The country's over-the-top (OTT) market is estimated to reach $5 billion by 2023, driven by rising affluence, increasing data penetration in rural markets and adoption across demographic segments including women and older generations, a BCG report said on Tuesday.
The report named 'Entertainment Goes Online' expects the advertising-based video on demand to be 43 per cent of the OTT market, subscription video on demand and transactional video on demand to constitute 32 per cent, while international market to account for 25 per cent.
"With development of regional content by various players, the rural market is poised to become a significantly large opportunity for players. OTT is riding the wave of increased data consumption and Internet access in rural India, has opened a new distribution channel that is viable for regional and niche content," it said.
The report pointed out that around 16 per cent of media consumption in the country is already on digital media. "Relative to developed countries, India is lagging. However, for the Indian youth, already 25 per cent of media consumption is digital. This indicates that the growth in India is likely to catch up," it said.
While traditional media continues to be the media of choice for consumers with an overall share of 84 per cent, India is seeing an increase in the share of digital in media consumption. BCG said this will most likely influence the impact and growth of digital advertising as well. It added that the digital consumption in the country has been additive and not cannibalising traditional media consumption. Over 80 per cent of users use three apps or less, and the share of users using over four apps is low, according to the report.
"Investment for original content by OTT players is increasing at a fast clip. In addition to live sports rights, the nature of shows produced is also evolving tent pole properties built for OTT are at a cost per hour of 3-4X cost of traditional TV content," it said.