The OTT scene in India has been going steady, and growing at a strong pace on the back of increasing penetration, more content choices and a flourishing regional market.

The OTT subscribers base in India is expected to reach 50 million by the end of 2023 from 45 million at present, according to a report by Media Partners Asia (MPA). The report also predicts that the OTT market is set to become a Rs 12,000-crore industry by 2023 at a compound annual growth of 36%.

Apart from attracting new consumers, OTT brands have a series of challenges to deal with in 2023 such as to retain their loyal customer base, reduce expenses and boost the platform’s profitability.

Hybrid revenue models

The survival of OTT platforms 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 has 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. Meanwhile, Amazon Prime Video has launched its mobile plan priced at Rs 599 per year.

“Reaching out to a wider base through hybrid revenue models, offering different pricing tiers and deployment of various technologies to provide consumers with a more personalized and customized experience will be key in the coming year,” Anand added.

Collaboration: Flavour of the season

An increasing number of OTT players now prefer collaboration over competition. ZEE5 and ALTBalaji, who joined hands almost three years ago to co-create content, have shown the way to others.

“The collaboration on content creation doesn’t only help share the rising cost, it also helps partners to understand consumer insights better and results in higher monetisation for both,” says Divya Dixit, an independent consultant, who has worked with Alt-Balaji and Zee5 earlier.

Making OTT series has been a costly affair compared to TV serials. As against Rs 15-20 lakh that is spent on one episode of a TV serial, OTTs often require Rs 50-70 lakh per episode, says Dixit. The acquisition of films, too, has been digging a big hole in their pockets.

OTT platforms are now looking to bring down content acquisition costs and that includes actors’ fees. Such rationalization help to slash the cost of both Content and Consumer Acquisition, Dixit says. 

Bundling of Apps

Bundling of OTT apps by market leaders is another trend that is set to grow in 2023, Dixit insists. While Amazon Prime onboarded more than 13 channels to its platform, Tata Play Binge, OTT Play and a few other market players are also offering several apps under their bundle.

It's a win-win situation for small and big players both. The smaller platform with less content may struggle to sustain an SVOD model, the big platform reaches new geographical areas riding on small players.

The availability of multiple streaming platforms under one roof has resonated well with the price-sensitive Indian market.  An EY report estimated that 322 million subscribers consumed bundled content.

Changing consumer behaviour

With things returning to normal and consumers looking for unique and more immersive content, OTT service providers are typically facing challenges of viewership and subscription fatigue.

According to Deloitte’s Annual Digital Media Trends survey, nearly 47% of U.S. consumers are frustrated by the growing number of subscriptions required to watch what they want.

The sense of being overwhelmed with OTT has started affecting Indian consumers as well, OTT experts say.

Gautam Talwar, Chief Content Officer - MX Player, noted, “Two important aspects that will determine the OTT growth in 2023 - the first is consumer behaviour which will be driven by their decision of how fast and how sticky they will be in choosing streaming as their preferred option for entertainment. Secondly, the degree of differentiated content offerings from various platforms versus other forms of