At 26%, rural areas witness higher growth in OTT audience in 2022: Ormax report

With 20% growth, India now has over 42 crore OTT viewers.

The Indian OTT audience universe has witnessed a 20% growth, rising to over 42 crore viewers, reveals the ‘Ormax OTT Audience Sizing Report 2022’. At 26%, rural areas have witnessed faster growth than urban areas (15%).

"A large share of the growth in audience base, has come from rural areas and small towns. The metro cities have reached saturation levels, with more than 79% OTT penetration. Platforms will have to rely on the smaller markets for the next phase of growth," said Shailesh Kapoor, founder & CEO, Ormax Media.

While the top six metros contribute only 10% to India’s OTT universe, they contribute 33% to the total paid subscriptions. Bengaluru, Delhi and Mumbai are the top three metros, with more than eight million active paid subscriptions each.

"This is because there are more SVoD audiences in the metros. Also, the average number of subscriptions is higher in the metros," Kapoor adds.

As OTT grows, platforms can't rely on the top 10-20 cities for their growth, and have to start creating the right content and marketing strategies for smaller towns to come into the fold.

"OTT content is still metro-skewed and targets urban pockets. There will be a need for more mass content, in terms of treatment, genre and storytelling, so that it can become more relatable to the smaller towns. It will be important from a subscription point of view," mentions Kapoor.

However, the penetration in these areas isn’t good enough for advertisers to leverage it to reach rural audiences.

"Rural penetration is only 18%. For someone targeting the rural audience, 82% of the population is still not on OTT. It is still not big enough to be a mainstream medium. Once it crosses 25-30% over the next couple of years, it will begin to compete with television and other mass media, at least the AVoD part. However, the penetration in small towns has crossed 50%. It is no longer a niche medium," adds Kapoor.

Conducted by media consulting firm Ormax Media, the research, based on a sample size of 13,500 people across urban and rural areas, was conducted from July to September 2022.

In 2021, the Indian OTT audience universe stood at over 35 crore viewers, with a penetration of close to 26%. The penetration has now increased to 30%, which means that three out of 10 Indians watched online videos at least once over the last one month.

"This growth is reflective of the post-pandemic normal reality. This was the first normal year," Kapoor says.

The report also reveals that there are currently 119 million active paid OTT subscriptions in India, across 49 million paying (SVoD) audiences, i.e., an average of 2.4 subscriptions per paying audience member. Male audiences form 65% of these paid subscriptions. In metros, the average number of subscriptions is 3.6. In mini-metros, it is 2.9. In small towns, it is 2.1 and in rural areas, it is 1.4.

"From an SVoD perspective, the most significant finding has been that the average number of subscriptions has remained static. This data point holds immense strategic value, as it suggests that growth will come from more people paying for subscriptions, than the same people paying for more subscriptions," says Kapoor.

"Now, the platforms need to look outside the metros for the next level of growth. They also need to convert free users into paid ones. That is going to be a challenge, as the country is not used to paying for content."