Streaming Platforms Use a Hybrid Model for Users With Low Budgets: Report

Streaming Platforms Use a Hybrid Model for Users With Low Budgets: Report

Video streaming platforms are increasingly looking to complement their SVoD (subscription video-on-demand) offerings with AVoD (advertising video-on-demand) programming, and for India’s price-conscious customers, the hybrid model is the most effective, according to a new report from professional services network Deloitte.

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According to the analysis, SVoD revenue in India is predicted to climb at a CAGR of 19% from $1.2 billion in 2022 to $2.9 billion in 2027, while AVoD revenue may grow from $1.15 billion to $2.42 billion during the same period at a slightly lower CAGR of 16%.

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Increase in AVoD Revenues

But, OTT service providers in developed countries are likely learning from how the Indian OTT market has changed and adapted for price-conscious Indian clients as they move quickly to offer AVoD tiers. Customers in India were eager to choose the option of watching content across many platforms for a lesser price, therefore, AVoD revenues increased at a far faster rate than in established markets. In 2022, there will be 428.3 million OTT subscribers in India. According to Deloitte, only 30% of these, or 130.2 million viewers, are SVoD. The revenue from India’s OTT market was approximately $2.35 billion in 2022 and is projected to be close to $5.3 billion by 2027.

Pursuing the highest-quality content at the most affordable price determines demand-side dynamics. This is particularly true in the context of India, where the fragmented market has led to price wars between international behemoths, national and regional firms, and smaller competitors. According to the survey, larger multi-national players invest $5–7 million in marquee series, but smaller regional platforms typically invest $0.4–0.5 million in every season of content. Over $500 million was spent on original content by Indian OTT platforms in total in 2021. However, despite rising content production investments, ARPUs are still low.