In 2008 when India was warming up to social media, another revolution was taking place, albeit quietly, in the subscription-driven, online movie-on-demand service market.

Reliance Entertainment launched the first Indian movie-on-demand platform called BIGFlix which allowed users to pay and stream or download movies at any time.

In 2010, a domestic tech company called Digivive launched India’s first over-the-top (OTT) mobile app called nexGTv, which provided access to both live TV and on-demand content. It was the first app to livestream the Indian Premier League (IPL) matches on smartphones in 2013 and 2014.

OTT streaming gained momentum in India when both DittoTV (Zee) and Sony Liv were launched around 2013.

Fast forward to 2022 and what we witness in nearly a decade-long period is over 40 OTT platforms — both Ad-based Video on Demand (AVOD) and Subscription Video on Demand (SVOD) services — streaming content 24/7 in India, gaining new users and threatening traditional cable and linear TV.

In two years of the pandemic, the OTT growth has exploded with heavy investments in original content, pricing innovations, low data costs and the rise of short-form content.

According to a Deloitte report that came out in February this year, the Indian OTT space is expected to grow at a CAGR (compound annual growth rate) of more than 20 per cent to reach $13-$15 billion over the next decade.

The OTT market currently makes up only 7-9 per cent of India’s entertainment industry.

The pandemic, however, accelerated SVOD adoption owing to right bundling and pricing innovations, along with the availability of premium original content.

There are currently about 102 million SVOD subscribers and this number is estimated to reach 224 million by 2026.

However, AVOD is expected to continue to pull in more revenue than SVOD in the country, increasing its current rate of $1.1 billion in 2021 to $2.4 billion in 2026, according to Deloitte’s Technology, Media, and Telecommunications (TMT) 2022 report.

Over the same period, SVOD is expected to grow from its current $0.8 billion to $2.1 billion in 2026.

SVOD subscriptions may also be affected by the bring-forward effect of Covid-19 as the currently accelerated growth rate may taper with the pandemic subsiding.

Jehil Thakkar, Partner, Media and Entertainment Leader, Deloitte India, told IANS that the wide adoption of smartphones combined with cheap data as well as the diverse content available to address all tastes is one of the key factors that led to the growing adoption of OTT platforms in India.

“Pricing too has been an influencer as low prices and some free options have always encouraged sampling and adoption in the country,” Thakkar said.

According to experts, the market for providing video streaming services in India is highly fragmented with more than 40 streaming players vying for the customer’s wallet.

Global streaming service providers such as Amazon, Disney-owned Hotstar and Netflix compete with domestic service providers such as Zee5, Voot, SonyLiv and MX Player), as well as a host of regional players.

In a latest move, most major streaming players have launched mobile-centric plans targeting price-sensitive millennials and Gen Z customers.

These plans also capitalise on low data rates ($0.09 per GB) and widespread smartphone user base (more than 600 million) in the country.

Industry experts say that the demand for OTT streaming content based on geo-demography is on the rise, both within India and internationally from the considerable Indian diaspora.

According to Gaurav Gandhi, Director & Country Manager, Amazon Prime Video India, one out of every five viewers for Indian Amazon Originals is from outside the country.

In a recent blog, Gandhi said that the local language titles on Prime Video are viewed in over 4,000 cities and towns in India besides being watched in 170 countries.

“Our Indian Amazon Originals enjoy incredible popularity both in the country and outside India International viewers already account for between 15 and 20 per cent of total audiences of these local language films,” he informed.

In India, the pandemic acted as a boon for streamers as the closure of cinemas forced content owners to look at online distribution platforms.

OTT platforms invested an estimated $665 million in content in the country last year, with Netflix, Amazon Prime Video, and Disney+ Hotstar leading the pack with a combined spend of $380 million, according to data shared by Deloitte.

Others, led by Zee and Sony, are also gradually scaling their investments as they aim to catch up.

Currently, each paying customer in India has, on an average, 2.4 subscriptions of OTT platforms.

However, given the price sensitivity, Indian customers may not continue to pay for multiple OTT streaming services in the near future.

“App aggregation and bundling can play an important role in expanding the market by bringing considerable value to consumers in terms of affordability, useability (single sign-on, single window content discovery, etc.), and compatibility with existing devices,” according to the Deloitte report.