While Internet traffic has risen substantially as a result of the digital transformation push triggered by Covid-19, three types of data traffic showed exponential growth during the pandemic: the traffic from collaborative communication tools, from streaming services, and from online gaming each saw huge growth. Since lockdown, people have relied on the Internet more than ever for business, entertainment, and for personal use.
Far from experiencing a post-crisis slowdown, this growth continues unabated: OTT & VOD traffic rose by 139% from Jan 2021 to Aug 2021. Traffic from social and online media grew by 144%, and online gaming traffic grew by 137%. Since the migration of enterprises and education sectors to the virtual environment, online activities are here to stay – and the trend in traffic increases will only continue. Needless to say this growth in Internet traffic will require a reliable, secured digital infrastructure to support it.
At the end of March 2021, the total number of Internet users in India was 825.30 million as per TRAI (Telecom Regulatory Authority of India). Among the above Internet users, 325 million users were estimated to be active viewers of either ad-support or paid streaming. Additionally, reports by the Broadband India Forum suggested that over 65% of the OTT consumption during the lockdown was from rural India. If that speaks of the past, reports by RBSA Advisors indicate that the Indian OTT market is expected to grow to $4 billion in 2025 and up to $12.5 billion by 2030. With 40+ OTT platforms in India, OTT has become a mainstream platform for content for the Indian audience.
Observing the rise in demand of OTT content consumption, International OTT players like Netflix, Amazon, Disney, etc. are investing in the Indian market with more and more regional language content. The accelerated drive towards digitalization triggered by the pandemic, along with the unlimited data plans, affordable devices, and convenient subscription plans, have been major factors in the growth of the OTT platforms in India.
Huge investments in new OTT services for significantly changing behavior
OTT players are partnering with telecom companies like Airtel, Jio, and VI as observed in the recent past, making content available to the customer in terms of bundled offerings and other distribution channels, demonstrating the potential of growth through collaboration. This collaboration has been seen across many telecom players within the Indian ecosystem, as well as standalone OTT players who have grown significantly during this pandemic, thereby clearly indicating that this is a key focus area not only for revenue generation but also for giving focus to OTT as a segment.
While YouTube is the 4th most used app in India, many broadcasters are launching their own digital platforms for the discerning consumer. These platforms have been aggressively pushed by various marketing , for example Zee 5 and Sony Live.
As a result, the volume of organizations adding additional 100GE ports to support the high demand has grown exponentially. Smartphone prices dropped, giving a wider section of society access to online platforms. This rise in millennial consumers has also had a positive impact on the digital India campaign. The effects of globalization coupled with large telecom companies dropping data costs resulted in significant growth in data consumption. The Covid-19 pandemic has disrupted big screen entertainment, with digital streaming platforms successfully taking its place.
OTT streaming now including regional languages, with rural consumption on the rise
Given India’s vast geography, OTT platforms have been able to bring a lot of content in regional languages, from movies to series. This has enabled them to expand their reach to a wider audience while also boosting revenues, all within a short period of time. As per industry analysts, 40% of OTT viewership today is accessing regional content.
The first independent OTT platform in India, Big Flix, launched by Reliance Entertainment in 2018, featured movies in 9 Indian languages. From there, The OTT sector has grown to proudly own more than 40 providers in India, each giving its customer a wide range of content across multiple languages.
With the exponential growth of the OTT market, organizations like Netflix and Amazon find multiple opportunities and have thus in addition to international content also begun to launch India-centric productions locally. Recent statistics from Netflix India indicated upcoming projects included seventy Indian originals and ninety additional programs in English and regional languages together. Furthermore, the availability of content in both original as well as dubbed languages has inflated OTT consumption across the Indian subcontinent, also stimulating value propositions for OTT players.
India is not a homogeneous market, but one that is made up of smaller and diverse OTT players that capture their unique viewers in terms of regional languages. Indian regional content has also got relevant viewership in communities that reside in countries like the USA, the UK, Dubai Malaysia, Singapore, etc. This vast market potential has further fueled the development of content in multiple Indian languages.
Importance of latency in OTT streaming
Although OTT is largely considered in terms of the streaming of video entertainment and online gaming, over-the-top applications also play an important role in this sector, including video conferencing tools and educational platforms for real-time communication and the streaming of video content. These applications are also taking leaps ahead in terms of their service offering. Recent multiple acquisitions and foreign investments on Edtech players like Byju’s and Unacademy have raised $2.32 billion and $354 million respectively.
All the above applications have one thing in common: Latency. Latency is what causes the lag experienced in long-distance video conferencing, live streaming etc. While video on demand is not as heavily affected by latency as real-time communication is, constant buffering will negatively impact user experience, resulting in lost viewership or subscribers.
While it is easier for broadcast networks to circumvent the issues that arise out of latency, OTT platforms are constantly challenged with finding reliable and cost-effective methods of achieving this. The primary and best option is connecting with an Internet Exchange Point. The aim of an Internet Exchange Point is to provide a platform for networks of all segments to exchange traffic and keep local traffic local. This means that the OTT provider can connect with the long tail of the Internet – the ISPs taking their content out to the edge, to regional users. By keeping traffic local, the distance the data needs to travel – and therefore the latency – is vastly reduced, improving the performance of the content and the experience of the user. It thus is necessary for major players to understand the benefits of interconnection services and the importance of having a presence in a secure and resilient digital infrastructure to gain a competitive edge.
In recent months the world has undergone major changes. Under normal circumstances, the growth of the OTT ecosystem would have continued at a steady pace and the adaptation would have been slower. Internet penetration is only set to increase in rural areas, and thus the investments made by international players in generating regional content will only continue to grow. Even after everything has gone back to normal, and with the option of returning to the old normal, people have adapted to this new normal and the trend will continue to grow from here.
While every platform has its own advantages and disadvantages, OTT as a platform is here to stay and is growing rapidly in this digital age.
-This article has been written by Mr. Sudhir Kunder, Country Director, DE-CIX India
Disclaimer: The views expressed are the author’s own and APAC News Network is not responsible for any of them.
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