The online video market in India – Audience and Opportunity

Dan kicked off this series of global online video market blogs with an introduction to China...

Dan kicked off this series of global online video market blogs with an introduction to China, specifically how online video is consumed and the attitudes of consumers toward revenue models.

I’m taking an in depth look at the online video landscape in India and how it’s different to most online global markets. We’ll see who the people engaging online are, what it is they’re doing online, and how they access internet. More specifically I want to take a look at how, if at all, online and mobile video is being consumed in India and attitudes to online advertising and why the opportunity for digital growth in India is one of the largest in the world. In part one I’ll be focusing on the Indian internet audience and discovering what access they have and what’s unique about their online habits – so let’s get started.

Let’s talk size

To be able to truly talk about the online market in India it’s essential to get some perspective on the size of the audience we’re examining. With a population of over 1.2bn people, India has the world’s second largest population behind China. Of those 1.2bn people only 243m use the internet and 185m do so on their mobiles. Whilst this means the majority are disconnected from digital, there are still a legitimately large number of individuals active online. An important factor to consider is the largest proportion of users are aged between 15 and 34 and engaged in online video. This is something that will be explored further in part two.

 

Issues dictating the current market

While age is an important influencing factor in online engagement, one that is perhaps even more influential is economic status and location. Current statistics show that while the total population of India is 1,264,360,000, a huge 857,195,000 of those live in rural areas. With urban dwellers having the best connectivity and highest share of wealth, it is that minority of Indians that is ‘plugged in’ to e commerce. As mobile and desktop technology becomes more affordable and broadband speeds increase, more of those in rural areas will slowly start to gain access to the internet, using the technology to search, engage in social media and watch online video. For now though, the wealth divide is certainly accountable for the lack of Indian families and individuals able to use the internet and it won’t be until that wealth is more widely dispersed that we will see a majority population participating in the digital market.

India is ‘notable as the third richest country in the world with a GDP (PPP) of well over $5 trillion. Yet, this country also struggles with wealth inequality, gender inequality and city slums. According to data reported in 2010, over 68% of India’s population lives on less than $2 a day, and during the last decade over 28% of the country’s whole wealth was held by the top 10% of the population. India is home to some of the world’s wealthiest billionaires, and the country’s economy is expanding.

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From little things big things grow

One of the unique things about the way Indian audiences access the internet is that shared-access is almost as prevalent as work and home internet access, meaning a lot of people are going to internet cafes and hubs to get online. It’s a matter of access, broadband speeds and, as mentioned above – income that dictates the ability for users to participate in the digital economy. This may be one of the indicating factors as to why although internet users between the ages of 15 and 34 is very dominant in India, the amount of time that all users are actually online is far less than markets across the globe. If you need to leave the home or workplace to access internet, then it would be logical that you would be spending less time online than those who can connect wherever they are, whenever they want.

As broadband becomes available to more people and network speeds increase, and more affordable smartphones and tablets are marketed to poorer classes, the amount of users, and importantly, time current users spend online is predicted to increase. So while right now internet users may not be interacting the way most leading economies are, it’s a very opportune market and one that will expand rapidly as smartphones become affordable and reliable networks are provided along with other mobile infrastructure.

From users to devices

So far I’ve spoken about the audience in India, who is connected and how much time they spend online but the other important factor is the devices they use.

While a large proportion of India’s internet users are connecting via their mobile, the device itself is worth taking a closer look at.

A whopping 70% of page views come from mobile devices and an even bigger proportion of Facebook users are accessing their favorite social network via their mobile device. It’s not a surprising statistic but when we go back to looking at who and where these audiences are, it’s easy to see how these numbers could skyrocket within the next few years.

Investment in mobile infrastructure within India could mean more people have access to basic internet via their devices and those with higher incomes, will start to make more frequent use of trending mobile uses such as retail.

While there are currently 886 mobile subscriptions/connection in India, only a small amount of these are smartphones and even less have 3G connections. According to Nielsen’s report The Mobile Consumer, only 10% of Indian phone users have a smartphone and 80% have basic feature phones.

This means the online activities that most users are able to achieve on their phones is minimal.The good news is that the cost of smart devices in steadily decreasing and internet speeds are being improved so the wider adoption of smartphones and data plans is coming.

Progression, innovation, affordable tech

In my next blog on online activity in India I’ll be looking a little closer at how devices impact the market, what content is most popular, interaction with online video, and the kind of advertising used as well as attitudes in response to online advertising that exist.

We will consider what  the landscape might look like when technological infrastructure is put in place because with innovations such as Google’s Project Loon already happening, widespread connectivity could be a reality sooner rather than later – at least, that is the hope.

Posted by simonholliday