According to research, the OTT sector is expected to replicate what multiplexes did to the VCR/VCP/VCD segment in the early 2000s and would grow from Rs 2,590 crore in 2018 to a Rs 12,000 crore business by 2023.
The over-the-top (OTT) industry is anticipated to expand from Rs 2,590 crore in 2018 to Rs 11,944 crore by 2023, representing a compound annual growth rate of 36%.
The analysis warns that this could result in a recurrence of the 1980s VCR/VCP/DVD boom industry's abrupt demise, given the exponential growth of multiplexes across metro and urban areas during the early 2000s.
With over 40 players and unique media content available in all languages, OTT has already taken 7-9% of the revenue and market share of the entertainment sector. It is also steadily expanding.
Quoting various industry reports, Soumya Kanti Ghosh, the group chief economic adviser, said there are over 45 crore OTT subscribers today in the country and this is expected to reach 50 crore by end-2023.
Affordable high-speed mobile Internet, a doubling in Internet users, a rise in the use of digital payments, and lower prices provided by international players like Disney+Hotstar (14 crore subscribers), Amazon Prime Video (6 crore subscribers), Netflix (4 crore), Zee5 (3.7 crore), and Sonyliv (2.5 crore) that offer plans at prices that are 70–90% less expensive than those in the US are the main drivers of this significant growth.
The OTT space is also seeing a number of local and regional players with players like Sonyliv Voot, Zee5, AltBalaji, Hoichoi etc catering to regional demand.
Since more than 50% of people use OTTs for more than 5 hours a month, the rise of OTT is predicted to reduce the earnings of movie theatres. Major studios have also come to the realisation that producing streaming movies and TV shows is much more profitable than making traditional movies, particularly if they develop their own streaming platforms.
He also warns that options such as Smart TV and Chromecast coming into the picture have impacted the traditional mode of entertainment the most.
The growth of multiplexes in metro areas and major cities in the early 2000s effectively eliminated the DVD market and single screens. And the influx of OTT platforms is expected to have the same impact on multiplexes as it had on the DVD business in the early 2000s.
The Covid-led lockdowns, which entirely closed theatres—something even the two World Wars couldn't accomplish—were the biggest contributor to the disruption.
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