Despite increased regulations, OTT platforms see large growth in India

OTT Platforms

By Sreedev Krishnakumar


With the introduction of IT Rules, 2021, over-the-top (OTT) platforms in India have lost the free-reign over content that they used to enjoy before. Despite the increased regulation, OTT platforms are seeing large growth in subscription base and revenues.

As per a report released by RBSA Advisors, India’s OTT market will reach US$ 15 billion in 10 years. The report says that the video and audio OTT markets will reach $12.5 billion and $2.5 billion respectively by 2030.

COVID-19 pandemic has been a major factor in the rapid growth of OTT platforms in India. In fact, India was the fastest growing OTT market in the world with 28.6% compound annual growth rate in 2020 as per PricewaterhouseCoopers. The penetration of cheap broadband internet in the country has also compounded to this growth.

This growth in market is also reflected in the revenues of the OTT platforms. Online video platforms saw increase on subscription revenues by 142% in India in 2020. Disney+ Hotstar and Netflix accounted for 78% of the total $639 million in subscription revenues by the end of last year. Disney+ Hotstar also had largest subscription share of 41%.

Apart from the big names, regional players in the market too has been seeing rapid growth. Several new OTT platforms catering to regional language audience have come up all over India in the last two years. With the pandemic, these platforms too saw an increase in subscription rates as theaters and cinema halls were shut down. Aha, a Telugu streaming platform which was launched in February 2020, garnered 1.5 million paid subscribers and more than 40 million users in just over a year.

Regional OTT platforms such as Aha has been coming up all over India in the last two years

This trend of increasing regional language content consumption can be seen throughout the country. Regional platforms such as Neestream in Kerala and Hoichoi in West Bengal and Oho in Gujarat have been successful in carving out a place of their own. Their growth is also fueled by a dearth in regional language content in global platforms.

According to a report by FICCI-EY, share of consumption of regional languages other than Hindi on OTT platforms will reach 50% by 2025. As the demand for such content keeps increasing, global platforms like Netflix and Amazon Prime Video will also be forced to invest more in regional language content.

Increasing regulatory constraints

The initial growth of OTT platforms in India was also due to the versatility in content that they were able to offer to the viewers. As they didn’t come under any legal oversight mechanism, these platforms didn’t have to worry about their content being flagged by government censors.

The lack of oversight mechanisms emboldened content creators to present controversial topics that might not pass the comparatively-regressive examination of the Censor Board of India. This also led to more outrages and controversies plaguing OTT platforms as their viewership base increased.

While shows such as Leila and Sacred Games were labeled as ‘hinduphobic’ and had to face calls of boycott from right-wing accounts over social media, Tandav was also met with several FIRs filed against it and the Ministry of Information and Broadcasting itself intervened and raised concerns with its creators for hurting ‘religious sentiments’. Several FIRs were filed even after the creators of the show issued an unconditional apology and cut off the contentious scenes from the show.

The Tandav controversy increased the demand for the censorship of OTT platforms. The government catered to this demand by including OTT platforms in the recently notified Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

The IT Rules mandates a three-tier redressal mechanism for digital platforms which will allegedly be constituted in a way that will give the government immoderate control over their content.

Advocacy groups such as the Internet Freedom Foundation also argues that the ‘Code of Ethics’ mandated by the new rules will have a ‘chilling effect’ on the freedom of speech of content creators.

Such allegations are given credence by the reports that OTT platforms have canceled or postponed several of their upcoming shows and movies in an exercise of caution.

Disney+ Hotstar had to delay the release of its show Kamathipura, based on the red-light district in Mumbai. Meera Chopra, the lead actor of the show, tweeted in March that the show would only release after making ‘necessary changes’ required to adhere to the new rules. The show was finally released in April with a new name, ‘The Tattoo Murders’. Similar reports have surfaced regarding shows and movies that are due to release on other streaming platforms as well.

Increasing investment despite content regulation

Despite the increased regulatory restrictions on its content, OTT platforms seems to be ready to spend even more in creating content for India. According to the FICCI-EY report, streaming services are expected to spend ₹1,920 crores to create original Indian content by the end of this year. This would be a 17% increase in spending from 2019 and is mainly due to the increasing competition in the market.

167, 931 years of video content will cross the Internet each month by 2022

As Indians are spending large amounts of time watching content online, more global companies are coming in to carve out their own share from the pie. Apple TV, Discovery+, Lionsgate Play have all launched in India in the last two years. In order to establish themselves amongst Indian audience, these platforms are also planning to create more Indian content.

According to a Livemint report, Lionsgate Play plans to create 50-60 fresh titles over the next 12 months and plans to dub all their international content to Indian languages.

It is perhaps these high stakes which has prompted OTT platforms to hastily comply with IT Rules. In fact, even before the IT Rules were notified, 17 OTT platforms had come up with their own ‘self-regulation toolkit’. As per a reply by Information & Broadcasting Minister Anurag Thakur in the Parliament, more than 40 OTT platforms have already given requisite information under the rules to the ministry.