According to IHS Markit consumer surveys, when choosing video services in India, three in four connected consumers feel localised content is as important as price – especially the inclusion of local Indian content and the quality of subtitling and dubbing of foreign video content.
Fateha Begum, associate director, connected devices and media consumption, notes that pay-TV subscriptions in India are expected to reach 166 million home by the end of 2018 and are expected to add a further 22 million over the next five years. In comparison, online video services are will add 25 million subscriptions over the same period, exceeding 35 million subscriptions by the end of 2022.
When it comes to choosing connected video services in India, IHS Markit findings reveal more than three-quarters (76 per cent) of connected consumers in India feel local Indian content is important – with 74 per cent citing the importance of quality subtitling and dubbing. Pricing was consistently the top factor across all markets surveyed.
India’s well-established domestic film and TV market poses the largest barrier to growth for international video platforms such as Netflix and Amazon, which are increasing their efforts in the market. Hotstar Premium continues to lead the over-the-top (OTT) video market. Its success is largely attributed to its premium content strategy and accounts for one in four OTT subscriptions in India.
Pricing is also a key feature, as pay-TV average revenue per user (ARPU) averages $3.70 in India, which is nearly half of the basic entry price for Netflix.
Excluding pricing, the second-most important factor varies by market. For example, in Australia, which is a mature pay-TV market, the range of content falls 20 percentage points below pricing. In Japan, the availability of local content, quality of subtitling and dubbing were only half as important as pricing.
While in the past couple of years, global OTT companies increased their focus on the Indian video market, including investment in local content, they face fierce competition from India’s rich and well-established local OTT players. India’s successful domestic film and network TV markets pose challenges for newcomers lacking the bulky local content libraries of their more entrenched local competitors. Despite launching its Sacred Games TV series in 2018, featuring Bollywood star Saif Ali Khan, Netflix still has a long way to go to grow its subscriber base in this large and diverse market.
Star India launched Hotstar, its advertising video-on-demand (AVoD) service, in 2015, followed by Hotstar Premium, its video subscription service, which launched the following year. The service is forecast to grow its Indian subscriber base by 60 per cent in 2018, accounting for 25 per cent of all online video subscriptions in the market. Its success has largely been supported by content investments, including premium sports, local-language content and international content from HBO, Disney and Fox.
Although pricing is the most important factor in a video service across all country markets surveyed by IHS Markit, Indian consumers were most likely to cite price as an important factor in their video service decisions. Pay TV ARPU reached an average of $4 in the satellite heavy market, while local OTT subscription services cost less than $1 per month on average. In comparison, the basic monthly Netflix package in India is currently priced at around $7.