MUMBAI: Financial services firm Edelweiss Capital’s research division’s latest report on the impact of OTT on television in India is surely going to delight the cockles of executives in broadcasting companies and probably raise the hackles of those in the video on demand space. The report says that, even as consumers are bound to increase their spends and time spent on video – either on handheld devices or on their smart TVs or their laptops, this will have a negligible impact on traditional linear TV’s fortunes.
Cord cutting or cord shaving which has been rampant in the US as cable TV and DTH viewers shift from their expensive services to cheaper VOD options or to cheaper TV packages is not something that is going to pop up in a hurry in India, says the Edelweiss report. The Indian cable TV and DTH segments are marked by low monthly rentals of Rs 300-450 as compared to the US where DTH and cable TV fees have soared.
“The Indian OTT market is at a nascent stage and is quite like the US was seven years ago,” it points out.
However, it is optimistic about the growth of the OTT sector. Currently, the challenge is broadband speed, the report points out, with the average home clocking 3.5 mbps, which is not enough to offer lag-free HD video streaming. It reveals that this will change with cheaper data and broadband options fueling VOD and OTT taking consumption of video content up from 3.5 hours to five hours daily.
Consumers are going to open their wallets and spend Rs 600-700 per month from the current Rs 300-450 per month to view video content across various platforms in the next five years, the report says. “In the case of India, it is largely a single-TV home market where not everyone in the family gets to watch what they want during prime time which will aid the OTT space,” the report adds.
But, VOD and OTT is only going to complement traditional television and not erode it is the report’s guidance.
The brokerage house is quite clear that TV advertising is also going to hold its ground because its viewership is going to continue to be steady. And, there is going to be no loss in revenues on account of VOD/OTT and the heady growths in digital video consumption and digital advertising.
