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Telcos to cater to over 375 million OTT subscribers by 2021, says FICCI-EY report

July 23, 2019
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According to a report by FICCI and EY, digital media is expected to overtake film entertainment in India by 2019 and print media by 2021. Further, the digital medium is expected to reach a valuation of $3.2 billion in 2019 and $5.1 billion in 2021. In contrast, the film segment, which was valued at $2.5 billion in 2018, is estimated to be valued at $2.8 billion in 2019, while print media, which was valued at $4.4 billion in 2018, is estimated to reach $4.8 billion in 2021.

The report noted that Indians spent 30 per cent of their time on smartphones using entertainment platforms. It expects the country to have 30-35 million paying over the top (OTT) video subscribers and 6-7 million paying audio subscribers by 2021. Further, viewers watch time could grow 3-3.5x over the next five years, resulting in a massive inventory growth. However, advertising revenues will grow by only around 2x. The cost per mile will correspondingly fall during the period for non- premium inventory, it said.

Meanwhile, the advertising-led model for digital mediums was valued at $2.2 billion, while the subscription-led model was valued at $0.2 billion in 2018, the report said. However, by 2021, the advertising-led model is estimated to reach $4.3 billion while the subscription model will reach $0.8 billion.

The report also stated that telecom operators would become the new multi-system operators (MSOs). While 60 per cent of total consumption today is through telco bundles, it is estimated to grow to over 75 per cent by 2021 and cater to over 375 million subscribers, it added.

Overall the Indian media and entertainment sector is expected to grow to $33.6 billion by 2021. During 2018-2021, the growth will be driven by online gaming and digital media, it said, adding that TV will retain its pole position as the largest segment in terms of revenue. Indian online gaming subscriber base grew from 183 million in 2017 to 278 million in 2018, the report said. It added that the revenue from the online gaming segment is expected to increase from $0.7 billion in 2018 to $1.7 billion in 2021. Moreover, the television segment grew at 12 per cent in 2018 to reach $10.6 billion and is estimated to reach $13.7 billion by 2021.

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