In today's blog, the first entry in our two-part series, we pinpoint the challenges OTT providers currently experience in trying to succeed in India's vast and rapidly emerging OTT market.
India is the second largest TV market in Asia, second only to China. By the beginning of 2018, the nation accounted for 530 million of the world's smartphone users compared to the distant 229 million in the United States for the same period. India is a market any over-the-top (OTT) broadcaster would want to target. But that's easier said than done.
OTT providers who want to capture audiences on every device across India need to prepare for the tough hurdles unique to the region. Here are some of the concerns broadcasters face and some potential solutions for mitigating them, while trying to launch an OTT service in India.
India has more than 800 TV channels, according to The New York Times. These channels broadcast in more than 15 languages, from English to Urdu. Each channel also focuses on a different aspect of Indian culture or subculture. According to the India Brand Equity Foundation, few of these channels are especially profitable, and with such niche target audiences, it's no wonder. Cable TV's business model has traditionally relied on the presence of a large general audience for ad revenues, not small niche targets.
A shake-up to the traditional business model for ad monetization is expected in India as more OTT's enter that market. Unlike cable TV, OTT scales easily and can thrive in niche markets by providing "everything for someone" as opposed to cable's "something for everyone." To date, more than 100 OTT players exist in India. However, the market is so fractured by interests, cultural groups, and regions, that local OTT providers can hardly grow subscribership. For this reason, no single provider has yet emerged as a front-runner, even though the race is heating up as Amazon and Netflix look to expand their offerings in the country.
Even when an OTT provider has landed on a fairly profitable niche, the second hurdle lies in content delivery. Smartphone ownership may be booming in India, but data networks aren't keeping up. According to Ookla, a global leader in comprehensive world-wide analytics, as of February 2018, India is ranked 109th for mobile internet speeds. Slow connections mean that international OTT providers can't realistically deliver the same high-quality viewer experiences to Indian audiences they're able to offer elsewhere around the globe.
However, network speed is on the increase. Several ambitious projects, like the fiber optic broadband effort in the Indian state of Telangana, are working to get high-speed internet to millions of Indian smartphone users, even in rural areas. More generally, a government effort is aiming to get 5 million Wi-Fi access points online by 2020 and 10 million by 2022, bringing higher speeds and better quality to a projected 600 million additional Indian users.
All of this is good news and a sign that the Indian audience for OTT will only continue to grow in the next few years. It also means that OTT providers need to simultaneously operate in the future as well as the present. Meaning, as they focus on delivering content in a way that won't overload today's infrastructure, they need to also be building with tomorrow's improved infrastructure – and user's future expectations for heightened quality – in mind. Even if content providers find success today, it will be short-lived if they aren't considering the extreme changes that are happening in India's evolving mobile landscape.