Market Insight

Indian TV advertising and online video revenues growing fast, fueled by demand for unique content

January 25, 2018

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Following is information and insight from IHS Markit about the Indian TV and online video market. 

TV commercials remain the largest contributor to India’s advertising revenues

While digital advertising is growing fast in India driven by online video services, TV commercials remain the biggest contributor to total advertising revenues in the country with a 44.2 percent share in 2017.

TV commercials are forecast to grow at a compound annual growth rate of 14.9 percent between 2018 and 2021, bolstered by the country’s ever-increasing demand for TV content and cyclical factors, such as sports events and general election. In view of the increasing demand, TV broadcasters have been keen to invest in content, having increased TV programing expenditure by 12.8 percent in 2017 to drive traffic to both linear and digital platforms.

India’s subscription-based online video market is forecast to grow rapidly in coming years, driven by increasing smartphone adoption and affordable mobile data plan. The number of subscribers will triple its size in 2017 to 18 million in 2021, while subscription revenue will quadruple to about $400 million (29.7 billion rupees) by 2021. The country’s online video advertising revenues amounted to $300 million in 2017 and will grow more than three times to $1.0 billion in 2021. This will boost the overall digital advertising revenues to $5 billion in 2021.

Demand for exclusive video content increases

Recently global over-the-top (OTT) platforms such as Netflix and Amazon have entered the Indian market, which poses opportunities to local content owners and distributors. Independent production houses are also benefiting from rising demand for exclusive content from linear TV groups and online platforms, as well as local video streaming services.

Like most developing countries, consumers in India have the lower propensity to pay for content. To encourage users to pay for the services, most online video service providers, which also compete with Facebook, YouTube, Amazon and Netflix, are looking to develop video content by investing in content production and acquisition. 

Mobile operators are also increasingly focusing on content by acquiring and forging partnerships with production companies, hoping to push data consumption to drive revenue.

The Indian TV broadcasters and online video service providers are experiencing intense competition as global players, such as 21st Century Fox, Sony, Netflix and Amazon, increase their investment in the country. This would indicate that the market could undergo a consolidation in the near future. 

Research by Market
Media & Advertising
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