Disney+ Tops 50% of Indian SVOD Subscriber Market

In the lucrative — and booming — Indian subscription streaming VOD market, Disney+ is beating industry veterans Netflix and Amazon Prime Video handily. New data from London-based research firm Omdia (formerly IHS Markit) finds the service accounted for 50% of all SVOD subs in India in 2020. India represents 30% of Disney’s 100+ million SVOD subs globally.

Online video subs revenue grew 142% primarily due to the global pandemic, with revenue rising from $265 million in 2019 to $639 million at the end of 2020. Disney+ Hotstar and Netflix accounted for 78% of the total online video subscription market revenue.

Disney acquired Indian digital platform Hotstar through its $71.3 billion acquisition of 20th Century Fox assets two years ago.

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Over the past year, Disney+ Hotstar has tripled its subscriber base from 8 million to 25.6 million. This growth is partly down to the bundling of Disney+ and Hotstar, as well as the postponement of the start of the Indian Premier League (IPL) cricket from April to September as well as competitive pricing plans and exclusive rights to foreign content such as “Game of Thrones.”

Netflix India also grew its subscription base significantly, rising to 4.4 million, up from 2.4 million in 2019.

“The COVID-19 pandemic accelerated the growth rate of an already dynamic and robust OTT market,” analyst Constantinos Papavassilopoulos said in a statement. “The basic elements that will propel the market to further growth in the near future are already there: very affordable mobile broadband prices, high penetration of smart-phones, a population eager to consume more content, an ever-growing investment in Indian originals and a plethora of choices with more than 40 OTT services operating in the country.”

Indeed, India is a market obsessed with mobile access to media. The world’s No. 2 population has more than 1.1 billion cellphone subscribers. Omdia says 82% of Indian online video services are accessed through smartphones, with only 39% accessing content through dedicated TV apps.

Disney+ Hotstar offers three content packages. The VIP plan (INR 399 per year) offers dubbed local language content, while Premium (INR 299 per month) offers both English and dubbed version of content. In terms of device access, the VIP plan only allows its subs to watch on one screen in HD while Premium plan allows subscribers to watch on two screens simultaneously in Full HD.

Separately, India was the launch site for Netflix’s first mobile-only SVOD plan, while Amazon bowed a $1.20 priced Prime Video plan. Lionsgate launched a branded SVOD service in India, dubbed Lionsgate Play, to go along with its Starz Arabia streaming service.

In 2021, Amazon and Netflix will continue their large investment in original Indian content, with the two services set to invest around $340 million, representing 52% of the total content investment. Omdia expects that close to 400 original titles (mostly series) will be produced this year by foreign and local Indian OTT services.

By offering affordable streaming plans and partnering with large telecoms such as Jio Reliance, Bharti Airtel and Vodafone India, Omdia expects that mobile-only SVOD subscriptions will continue to grow over the next couple of years. However, these plans face increased challenges from traditional pay-TV services, which are aggregating OTT video with their core linear TV service.

Report: Most Adults Willing to Pay $15 for Early Access to Movies

Transactional movie revenue across pay-TV and digital platforms, excluding premium VOD, increased 14% in 2020, exceeding $6 billion for the first time, according to new data from London-based research firm Omdia.

Despite the growth in TVOD revenue due the pandemic, consumer spending was unable to offset declines in box office revenue caused by shuttered theaters. Total spending on movies in theaters, TVOD and packaged media was down 43% compared with 2019, but remained flat with the addition of subscription streaming video, i.e. Netflix & Co.

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As a result of the pandemic, many studios have put greater emphasis on their own direct-to-consumer streaming services as well as experimenting with traditional release windows. This approach has meant that some studios with a D2C platform are able to use new release movies to drive SVOD uptake and generate recurring revenue. However, SVOD availability not only breaks the transactional video window but significantly reduces the lifespan of a movie, according to Omdia.

In a survey, more than 57% of U.S. online adults stated that they were willing to pay extra for early access to new movies with the average maximum spend totaling $15.16 — about $1 more than the average cost of a digital retail movie. However, among households with children, 71% are willing to pay no more than $20.07 for PVOD. Among respondents who frequented theaters more than six times annually before the pandemic, most are willing to pay no more than $28 — about the cost of a family movie ticket.

It is clear that the demand for content is continuing to increase across all consumers and whilst studios are reacting to this demand by providing more new content to SVOD, there is a balancing act that needs to continue,” analyst Fateha Begum said in a statement.

Indeed, about 93% of respondents who sampled PVOD in 2020, nearly 50% said they were willing to repeat the transaction. However, for studios to match the $10.7 billion box office in 2019 through PVOD, each household would have to make at least 5.5 PVOD transactions equating to 700 million transactions within one year. This rises to 17 PVOD transactions per family for households with four children.

“PVOD presents a great opportunity for studios however, it is not a magic cure to recoup lost revenues through the global pandemic,” Begum said. “It should not be viewed as an alternative to the cinema but an accompaniment.”

Increase in Demand for content:

In 2020, consumer demand for online video content increased across all business models. The year saw an influx of new TVOD users, a rise in VOD consumption as well as increased SVOD conversion and uptake. Contrary to popular belief, consumers that engage more with subscription online video services are more likely to visit the cinema than the average consumer, as well as being more likely to purchase or rent via digital video stores.

Omdia found that willingness to pay for premium titles increases with the number of online video subscriptions, in particular among those consumers with 4 or more video services. This highlights the opportunity for studios to use new release movies to generate incremental TVOD revenues while driving subscriptions and retention on D2C services.

“In response to the global pandemic, studios have been able to experiment with theatrical windows and release times, but once things go back to normal, we anticipate that whilst consumer demand remands for new releases, release windows will go back to resemble those pre pandemic,” Begum said.

Report: Pre-Pandemic Consumer Movie Spending Won’t Return Until 2023

With ongoing efforts to inoculate Americans against the coronavirus, theater operators hope to see a return of moviegoers. New data from Omdia finds consumer spending won’t return to pre-COVID-19 levels until 2023.

Before the pandemic, the average household spend for movies in the United States was more than $80 per year. However, due to the global lockdown restrictions caused by the pandemic, cinema spending has suffered, box office revenue was down $30 billion in 2020 (from almost $42 billion), compared with 2019.

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Omdia predicts that it will take up to three years for moviegoing spending to return to pre COVID-19 levels. Studios will continue to delay large tentpole releases such as the newest James Bond release No Time to Die as they wait out the pandemic to capitalize on consumer’s eventual return to the cinema, according to Omdia.

In the meantime, consumers will look to other windows for premium content and Omdia expects models such as online video subscriptions to benefit from the advances in their spending habits.

The report found moviegoers are subscribed to 50% more SVOD services than infrequent moviegoers, rent twice as many new movie releases (both physical and digital), purchase three times as many new releases and are around three times as likely to pirate content from unauthorized sources.

The report found moviegoers present the greatest growth opportunity for studios across all content access points, particularly through paid subscription channels with 13.9% growth year-over-year in subscriptions per household to SVOD services.

“Whilst Cinema closures have effectively halted box office revenue, they have not hampered consumer demand for new content, especially in cases of government mandated lockdowns,” Max Signorelli, senior analyst for media and entertainment at Omdia, said in a statement. “We are seeing consumers look to all subsequent video options to access premium entertainment with an increasingly appetite that will remain post pandemic. As movie release delays show, content producers can reliably bet on people returning to the cinema when able to do so.”

Report: Linear TV Remained Dominant Form of TV Viewership in 2019

Despite declines in viewership, linear television remains the dominant form of TV viewing for consumers across the United States and other major economies, according to data from Omdia.

Linear TV accounted for 63% of television viewing in the U.S. in 2019, compared with 16% for long-form viewing and 12% for DVR time-shifted content. Linear TVs’ share of viewing declined from 67% in 2018. Similar trends occurred in most of the other countries tracked by Omdia. The report covered TV viewership trends in the United States, Australia, the Netherlands, Spain, Italy, Germany, France and the United Kingdom.

Average linear TV viewing time declined in all but one market, with decreases ranging from four minutes in Italy to 19 minutes in the U.S. The Netherlands was the only market to not see a decline in linear viewing, remaining unchanged from last year.

“Although traditional linear television viewing is undergoing a broad-based decline, this form of entertainment remains central to most people’s viewing habits,” analyst Rob Moyser said in a statement. “As a result, linear still accounts for the majority of viewing in all countries tracked. In some countries, linear still strongly dominates viewing, totaling 90% in Italy, for example.”

On the non-linear front, online long-form video is the main platform driving growth in 2019. Online long-form was a key area of growth across all markets, driven largely by online subscription video services such as Netflix and Amazon Prime Video. Growth of online long-form video content in 2019 ranged from 55% in Australia to 10% in the Netherlands.

Growth in over-the-top subscribers, D2C launches, and a rise in connected TV and pay-TV partnerships are fueling the increase in online, long-term video viewing.

However, the fastest-growing segment of the non-linear view market is social media. Social media viewing across the countries tracked increased by 10 minutes in 2019, a growth rate that surpassed all other forms of non-linear television video. The U.S. led social media viewing, with 49.3 minutes in 2019. The advance of social media was partly propelled by the massive growth of Chinese video-sharing service TikTok.

“TikTok’s success was one of the breakout stories of 2019, with the social media app growing at historic rates,” Moyser said. “This rate of increase was so huge it quickly became the most popular social media platform for video viewing in Germany and the second most popular app in three other northern European countries: The United Kingdom, France and the Netherlands.”

Time spent viewing video content on social media platforms increased by 10 minutes in 2019 to an average of 41 minutes per-person per-day across the eight markets analyzed. In comparison, all other forms of non-linear viewing increased by a cumulative of seven minutes over the year.

Other developments noted by the report include:

  • Average total daily viewing time for the markets analyzed rose to 306 minutes per-person, per-day in 2019, an increase of four minutes year-on-year.
  • TV viewing saw a massive rise in consumption in March and April 2020 following the implementation of lockdown measures across the countries covered. Italy had the highest total for viewing time in Europe in March at five hours and 46 minutes.
  • Italians spent 346 minutes a day in front of the TV screen in March 2020, an increase of 34.1 percent on the same period last year, the highest total for viewing time in Europe.