After being a burgeoning sector over the last few years, India’s over-the-top (OTT) sector is on a slow growth ahead due to a change in Indian Premier League digital rights resulting in free streaming of the tournament, says the latest report of Ampere Analysis.

As per the report, the OTT subscription revenue in the world’s largest consumer market grew by 30-80 per cent annually between 2019 to 2022. Its pace dropped to a mere 10 per cent in 2023 when IPL rights changed hands from Disney+ Hotstar to JioCinema.

The report noted that the subscription revenue of Indian OTT players is set to reach $1 billion in 2023. In contrast, Chinese OTT subscription revenue hit $10bn in 2022.

As per the report, Disney+ Hotstar lost the IPL digital rights as part of its drive towards profitability and is on track to “shed 10 million subscriptions in the territory in 2023”. This will reduce the company’s revenue market share from more than 40% in 2022 to less than 30%.

JioCinema, a low-profile streaming app till a year ago, has emerged as the biggest disruptive OTT platform this year after Viacom18, which owns the app, won the digital media rights of the IPL for a whopping Rs 23,758 crore last June for 2023-27.

While the app became a household name when it announced streaming FIFA 2022 for free and thus acquired millions of urban customers with the offerings, its free IPL streaming strategy broke records for IPL 2023 viewership and helped it to grow pan-India.

Gearing up to expand its reach, the platform has now acquired content from top studios in the world including HBO, Warner Bros and NBCUniversal.

OTT players in India continue to show strong growth trends driven by multiple factors including increasing connected TV penetration, greater content choices and an increasing local language play.

It is noteworthy that the Indian OTT subscriber base is expected to reach 50 million by the end of 2023, according to a report by Media Partners Asia (MPA).

The OTT platforms’ survival in the country depends on both ad-free and ad-based models with almost equal weightage. While the ad-based model (AVOD), which accounts for nearly 60 per cent of the overall OTT revenue, has a low entry barrier and is scalable, SVOD makes financial forecasting easier since users are locked in, and incoming revenue can be easily tracked.

At present, platforms are trying various subscription models to sustain. For instance, Netflix introduced its ad-based cheaper plans (in markets other than India) for the first time after relying on an ad-free subscription plan for years.

India being the mobile-first market, most platforms have launched affordable (AvoD) plans that suit the masses. For instance, Netflix India and Disney+ Hotstar’s monthly mobile plan is currently priced at Rs 149 per month.

However, on JioCinema, the content is totally free except for the international content acquired from HBO and Warner Brothers.

Hotstar, Netflix & Prime Video to drive the sector

The report also predicts that Netflix is set to overtake Amazon Prime Video in revenue in 2023, generating almost $200m, and is forecast to reach 11m subscriptions in 2025. Netflix had dropped its subscription fee in India in 2021 December by 60 per cent, yet it clocked a 25 per cent increase in revenue in 2022 year on year.