How OTT Will Drive Innovation in 2018 in India
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How OTT Will Drive Innovation in 2018 in India

By Bharat Berlia August 02, 2018 - 14,140 views

With nearly 500 million internet users, a figure that is growing at a rate of 8%, India is one of the largest drivers of digital innovation across the world. India’s potential as a market for global media and entertainment sector is unprecedented, and a liberal investment environment is helping foreign players to enter the Indian market easily.

The government’s Digital India Initiative is helping even the most remote villages to stay connected. Indian culture values entertainment and the growth potential for media houses and entertainment giants are enormous. Over-the-top (OTT) media services have already entered India, and services such as Netflix, and Amazon Prime have a growing number of users across the country. Surprisingly, OTT is growing popular even in smaller towns and villages where internet speed has been questionable, to say the least.

In such a scenario, OTT is going to drive innovation in India simply because of the sheer value of the market that India offers. In this article, let us take a look at how OTT is set to change the entertainment and digital scene in India.

What do the numbers say?

When we look at statistics related to internet usage in India, it is quite unavoidable to feel overwhelmed by the sheer figures. These figures indicate that video consumption in India is growing at the speed of light, and much of the aspirational rural and small-town users have already begun to stream media using high-speed mobile internet connections. With a rural to urban migration pattern, accessing high-speed internet connections is not only easy but also a reality already in the making.

  • Of the half a billion internet users, there are at least 180 million active online video viewers.
  • In 2017, the OTT market in India was valued at 37 billion rupees. OTT market in India is expected to grow at 17.3% in the next five years.
  • People have already begun to supplement TV viewing with multiple OTT platforms such as Amazon Prime and Netflix.
  • India is a diverse country with more than 22 official languages. Content in these languages is set to grow at an unprecedented rate.
  • By 2020, there will be more than 700 million smartphone users in India

Here are the top 7 areas where OTT is going to spur innovation :

  1. Personalized content

The concept of personalized content is relatively new in India. However, OTT is set to change all that, and we can see that already happening. Netflix, Apple Music, Amazon Prime, and other OTT-based services have begun to offer personalized content to a market that was mostly used to the hand-me-down equivalent in media content. Personalization spurred by OTT will likely have cultural and social ramifications but in a positive manner. Indian media consumption has been dominated by proscriptive relaying of content without much choice for the actual viewer or consumer. OTT will change that and help Indian users to choose what they want, and watch they will most likely want to watch or listen.

Newer players will make use of data insight to change algorithms and develop apps and media content that will actually appeal to individual users. In other words, OTT will help propel the process of individualization of Indian entertainment and media consumption.

  1. Streaming of video and audio

More than 70% of revenue earned by the Indian music industry now comes from digital streaming. Affordable and high-speed internet connections have helped the music industry to make use of online platforms to offer music as OTT. Similarly, Indian movies and TV shows have a huge potential to reach the market via OTT. Most people in India have begun to replace their televisions with smartphones for media consumption. As smartphones usage tends to be an individual affair, as opposed to a family watching TV, individualization, and personalization of music and movies will grow.

There is a potential market for larger screen smartphones in India. Innovation in device manufacturing and accessories is an area that manufacturers and distributors should look at. Accessories such as smart headphones, artificial intelligence, and IoT-based media consumption devices, etc. have a promising future in India, thanks to OTT.

  1. Mushrooming of online gaming

Video games in India are quite popular, throughout of reach for most ordinary citizens. Xbox, Nintendo, and PlayStation were all out of reach for ordinary and rural Indians, and their usage was limited to affluent urban users. The advent of affordable Android-based smartphones have democratized online gaming and brought gameplay to millions of smartphone users across the country. OTT has a huge role to play in bringing video game content to Indian users. Potential opportunities in online gaming include video games developed in various languages of India, indigenous game development, and streaming of global video games on subscription models. 4G speeds, OTT, and affordable subscriptions have already begun to help users across India play video games.

Most video game players use smartphones priced $300 or below, and there is a market for large-screen smartphones in this particular demographic. It is no wonder that the gaming industry in India is expected to become a $1 billion industry.

  1. Content in various languages of India

Right from sports, music, and movies to online gaming, content in regional languages is likely to be the focus of media houses, whether national or international. SonyLIV, for instance, believes that a large proportion of its OTT offering will depend on media consumption in languages other than English, such as Tamil, Bengali, Kannada, etc. In fact, Sony has plans to attract 200 million users from various linguistic states of India, subverting the idea of homogeneous media consumption.

While music and movies already have an OTT presence for various languages of India, OTT-based TV services hold promising opportunities as well. As discussed earlier, the gradual replacement of TVs with smartphones will likely open up opportunities for TV content creators and aggregators as well. Innovation in this area will focus on making TV-streaming in regional content quicker and more accessible. Mobile app streaming via OTT is another area that might open doors to innovation.

  1. Improvement in digital infrastructure

While OTT is likely to open doors to a lot of content creators, broadcasters, and aggregators, it is also going to open up opportunities for people working towards improving digital infrastructure. OTT will propel software and web development opportunities, while also helping digital marketing agencies to take up new projects. Existing digital infrastructure in India is rather dismal, even if we consider high-speed 4G, the upcoming 5G, and broadband connections in urban areas. Telecom infrastructure is woefully outdated, and it will need to be updated and upgraded to handle the burgeoning internet traffic that is likely to arise from 700 million smartphone users by 2020.

While Indian languages offer bountiful opportunities for innovation, currently there are issues with keyboards, fonts, and language input. Innovation in the field of improving user-experience for content in Indian languages is very important. Low data speeds are still a challenge, and OTT usage will force telecom operators and service providers to improve existing infrastructure and enhance speeds.

  1. The growth of messaging, voice calling, and video communication

OTT isn’t limited to media or entertainment consumption. While internet television and music, movies and video game streaming are associated with OTT, messaging apps and voice calling services come under the category of over-the-top services as well. OTT messaging includes WhatsApp, WeChat, iMessage, and others that bypass mobile network operators to provide messaging services. Similarly, VoIP services such as Skype, Viber, and others come under the OTT umbrella as well. These kinds of services are set to explode across India, with most users choosing these free-to-use applications instead of paying separately for them.

Opportunities for other utility-based services to be delivered via OTT model are huge. However, developers will need to focus on enhancing user experience and user interface, while working towards making OTT-based services load quickly on slow internet connections.

  1. Enhanced user-generated content

With smartphone usage is expected to explode, there are a lot of opportunities in the field of user-generated content. Much of the OTT-enabled services will likely see innovation in the area of helping people create and share content in the language of their choice. Innovation will revolve around building applications that are user-friendly in terms of content creation and sharing. With this in mind, video and music editing applications may prove to be important areas to consider.

There is a tendency to look for viral content, which usually tends to be user generated. Developers and OTT providers will benefit from trying to innovate existing platforms, while also developing newer and better platforms to create and share. This also brings to our mind the importance of direct-to-consumer access and helping consumers to monetize the content they create. While the monetization of user-generated content is already available in the form of AdSense and other platforms, OTT providers will need to innovate further to make it more appealing to Indian users.

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