Online video streaming platforms such as Hotstar, Zee5 and SonyLiv that run on an ad-supported model, are set to take away some of the TV ad dollars, according to a new report.

According to Deloitte report, US could be forced to follow the Indian market in adopting ad-led video streaming model aggressively being adopted by several Indian video streaming apps such as Hotstar, Zee5 and SonyLiv. The shift is set to pull away some of the TV ad revenues towards these new services.

Ad-supported video services

Deloitte Global predicts that revenue from ad-supported video services will reach an estimated $32 billion in 2020. Asia (including China and India) will lead with $15.5 billion in revenue in 2020, nearly half of the global total.

“Due to existing subsidization, ad - supported platforms will be able to target a larger market and reach larger MAUs. These platforms are in the process of convincing advertisers to shift some of the TV ad budgets to streaming video by placing forward innovative ad models and personalised content," the report said.

Hotstart is leading the pack in the adoption. Nearly 50 per cent of Indian smartphones have Hotstar’s mobile app installed on them. Thanks to ads, Hotstar provides much of its content for free, which has helped to quickly scale its viewers while generating revenue, the report said.

In China, India, and throughout the AsiaPacific region, ad-supported video is the dominant model of delivering streaming video to consumers. Sometimes it is combined with subscription services; in other cases, revenue comes from ads alone. It’s a big business that’s poised for growth.

Currently, India has an audience base of 350 million and is predicted to grow to 500 million in 2020, according to Deloitte. This will give an expected rise to mobile data traffic at a CGAR of 40 per cent to reach 5.5 exabytes per month in 2021 and video is likely to contribute to 75 per cent of this data traffic. Out of the 75 per cent new video audience, rural India is expected to drive the growth of the digital content.

Furthermore, with an increasing smartphone penetration in rural India, regional content in the OTT space is likely to attract greater investment from large production houses. Revenue from regional content is also expected to increase from Rs 9.2 billion in FY 2018 to Rs 12.5 billion in FY 2019-20.

Jehil Thakkar, Partner, Deloitte India said “We have witnessed the demand and supply of OTT platform content growing, combined with India’s online viewership to touch 500 million. In 2020, the growth is going to be steady and now Content Distribution Networks will want a slice of the market.”

comment COMMENT NOW