A recent report by Nielsen says that the time spent on smartphones has gone up from 23.6 hours to 25 hours in a week.(Zee5)
A recent report by Nielsen says that the time spent on smartphones has gone up from 23.6 hours to 25 hours in a week.(Zee5)

Why brands are jumping on to the OTT bandwagon?

From smartphones to smart TVs, India has been the fastest to warm up to digital media and this has paved the way for massive growth of OTT segment. While most of these platforms offer ad-free content, almost all original series feature an abundance of product placements and brand integrations. If you have still not given a thought to OTT as an advertising platform, it’s time you do!
UPDATED ON APR 21, 2020 03:58 PM IST

Prerna Sahay (28), an HR professional, is constantly hooked on to her phone these days. Ever since the Covid lockdown was announced, work has been affected and she finds herself spending most of her time binge-watching shows on popular Over The Top (OTT) platforms! There are many like Prerna, who consume digital content almost all the time, but the Covid-19 crisis has amplified the numbers. What’s more, most millennials consume this content on their smartphones!

A recent report by Nielsen says that the time spent on smartphones has gone up from 23.6 hours to 25 hours in a week. Besides, the number of video on demand users ‘ stands at 96 percent, while the time spent on VOD is at 219 minutes.

In the last few years, India’s digital economy has come of age. According to a report ‘India’s Trillion Dollar Digital Opportunity’ by the Ministry of Electronics and Information Technology, India can create up to USD 1 trillion of economic value from the digital economy in 2025.

With more than half a billion internet subscribers, India is one of the largest and fastest-growing markets for digital consumers. Its digital consumer base is the second largest in the world, and is growing at a rapid pace. What’s more, this inclusive digital model is gradually narrowing the digital divide within the country and bringing the benefits of technology to all segments of people.

From smartphones to smart TVs to even adoption of UPI apps (post demonetisation), India has been the fastest to warm up to digital media. The country is the torch bearer of this change, and is giving rise to the influx of video streaming platforms.

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

SOURCE:Ministry of Electronics &IT Report on India’s Trillion Dollar Digital Opportunity

Besides, regional content is a new frontier for growth. Indian language internet users are expected to grow to 536 million., with 9 out of 10 new internet users in India likely to be Indian language users paving way for rapid users growth on OTTs with strong language content offering.

Entertainment driving growth of OTT platforms

The introduction of OTT technology marked a clear shift in India’s media consumption patterns a few years ago, but it was in 2019 when this movement was accelerated. Today, OTT players offer a wide variety of content, making the experience as immersive and engaging for consumers.

With abundant choice and convenience to consume content on-the-go, binge watching shows and movies has become the new normal. OTT platforms also enable targeting the right mix of viewers based on their profiles and viewing habits, helping to build strong customer-driven relationships.

Of course, this trend is being driven by data availability and affordability. From being a data sparse country only a few years ago, India today tops the world in data usage at 9.8 GB per month, according to a report by Ericsson. Indians are spending nearly 3 hours a day on their smartphones, and more than 30% of this time is spent on entertainment.

According to a PwC report titled Global Entertainment & Media Outlook 2018-2022, data consumption in India is set to grow, as mobile connections will reach 850 million people by 2022. Interestingly, entertainment is the main purpose among 84% active mobile internet users in India. The numbers speak for themselves - app downloads in India grew by 190% since 2016; there were 40 billion app downloads by 2019.

What’s more, in 2018, a survey by Mint showed that the share of millennials watching online entertainment (48%) exceeded the share of those watching cable TV (43%).

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

The share of OTT in the entertainment space has only grown over the years. Share of voice (SOV) is a measure of the market your brand owns compared to your competitors. It acts as a gauge for your brand visibility and how much you dominate the conversation in your industry.

The number of monthly users on OTT platforms continues to grow, with ZEE5 and Hotstar contributing to 50% of overall unique visitors and monthly visitors. The OTT sector in India grew by 59%, according to an EY and FICCI report, aptly titled ‘Billion screens of opportunity’.

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

Besides, Hotstar, ZEE5, Netflix and Sony Liv are the top OTT platforms, where consumers are spending more than 8 mins per session Vs OTT average of less than 6 mins/ user session.

Digital advertising: A window of opportunity

The Indian Advertising Industry has grown at a rate of 9.4% over 2018 to reach Rs. 68,475 crore by the end of 2019, according to the Digital Report 2020. Further, digital advertising currently stands at 13,683 crore with a growth rate of 26% from 2018. The millennials today are not influenced by traditional advertising methods, which is why it is critical for brands to try hard and appease them, either through original content or being innovative in their approach.

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

The growth of the OTT segment has paved the way for the promotion of corporate brands. While most of these platforms offer “ad-free” content, almost all original series feature an abundance of product placements and brand integrations. Consumers, mostly millennials, don’t object to them since they don’t really feel like traditional ads.

Some platforms also offer a combination of video advertising that includes pre-rolls, mid-rolls, non-skippable and skippable ads. According to EY, advertising is expected to form 95% of the total revenues in the digital media industry.

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

That’s not all - among all the industries, FMCG makes the highest contribution of 22% (Rs. 3,745 crore) to the digital media industry. FMCG spends the highest share of its digital media budget on Online Video (36%) followed by Social Media (27%) and Display (23%).

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

The top FMCG brands that spend on OTT include Kwality Walls, Bisleri, GoodKnight, Parle products, Himalaya Wellness, All Out and Parachute Advanced, among others. Here is the complete list:

Why brands are jumping on to the OTT bandwagon?
Why brands are jumping on to the OTT bandwagon?

The bottomline

The OTT space is consistently witnessing a spurt in the number of users. Consumption patterns increasing by 5x, growth in connected devices, as well as affordability in owning a device, will make OTT the preferred choice of brands!

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