Market Insight

In India, localized content is as important as pricing when choosing a video service

December 18, 2018  | Subscribers Only

Fateha Begum Fateha Begum Associate Director, Connected Devices & Media Consumption

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  • According to the latest IHS Markit consumer surveys, when choosing video services in India, three in four connected consumers feel localized content is as important as price -- especially the inclusion of local Indian content and the quality of subtitling and dubbing of foreign video content.
  • India’s well-established domestic film and TV market poses the largest barrier to growth for international video platforms like 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 $3.7 (USD) in India, which is nearly half of the basic entry price for Netflix.

Our analysis

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, the latest consumer survey from IHS Markit reveals more than three-quarters (76 percent) of connected consumers in India feel local Indian content is important – with 74 percent citing the importance of quality subtitling and dubbing. Pricing was consistently the top factor across all markets surveyed.

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 percent in 2018, accounting for 25 percent 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.

The importance on localized content to Indian consumers highlights the prominence and success of India’s network TV and Bollywood content. It also presents several hurdles global players must overcome in order to increase their subscriber bases in the market. To succeed and grow in India’s content-hungry market, these global players need to provide the correct mix of content at the right price.


Asia Asia Pacific India
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