Fuelled by increasing smartphone penetration and affordable data pricing in the country, the number of “digital only consumers” of content is set to more than double to 4 million by 2020, a report by Ficci-EY has said.
The report titled ‘Reimagining India’s M&E sector’ estimates that there are around 1-1.5 million “digital only consumers” in India today, who do not normally use traditional media.
“…this customer base (is expected) to grow to around 4 million by 2020 and generate significant digital subscription revenues for the media and entertainment (M&E) sector,” it added.
It noted that the proliferation of digital infrastructure will enable shifts in consumption patterns, which will be based not as much on geographic, gender and age criteria but more on the ability to pay.
Tactical digital consumers — who consume both paid television (cable and DTH) and have at least one OTT subscription (like Netflix, Hotstar or Amazon Prime Video) or are driven by sachet pricing of content — would provide high volume-lower value subscription base to content distributors.
“This segment could, on the back of digital and micro payment systems being rolled out in the country, reach as high as 20 million households by 2020 (from six million now),” the report said.
By 2020, India is expected to become the second largest online video viewing audience globally, given by the exponential growth of video consumption over digital media.
By 2020, the largest segment of consumers will consume traditional media (either pay or free) and free OTT (over the top) content on the back of falling data charges and growing free Wi-Fi access.
“We expect these consumers to cross 500 million by 2020. Over time, a portion of these consumers could start paying for small bites of content using their UPI and BHIM mobile apps,” the report said.
Overall, the M&E industry is poised to touch USD 31 billion by 2020.
“With the fall in broadband pricing triggered by Jio, the gap between the cost of watching an hour of TV on broadband and traditional cable or DTH has significantly reduced,” it said.
It also pointed that increasing affordability of smartphones along with availability of data packs providing 1.5 GB per day for around Rs 5, have made it affordable for consumers to watch content on the go.
While currently, it is still more expensive to watch TV using broadband (than traditional routes like cable TV), the fall in broadband price pose a threat to the cable and DTH industry.
“A number of distribution companies are investing in broadband to mitigate this risk, leading to increased ARPUs (average revenue per user) and margins,” the report said.
This is published unedited from the PTI feed.