How regional content is gaining popularity amongst the Indian audience

In a line, to say the future is here sums up Deloitte’s projections for the Media and Entertainment sector for 2022. The acceleration came with a renewed focus on tech adoption, while smartphones acted as a catalyst for digital penetration across the tier-2 and 3 markets in India. The country is poised to have 1 billion smartphone users by 2026 and will be the second-largest smartphone manufacturer in the next five years. With data pricing ensuring accessibility to all, the media sector innovated in an unprecedented manner to take digital penetration to the next level.

Evolving consumer behaviour in view of the pandemic increased digital content consumption in India. Audiences began experimenting with genres and languages with regional content breaking out of its traditional boundaries. In fact, there has been exponential growth in the number of non-Hindi language platforms catering to regional audiences given the growing demand. The share of regional language consumption on OTT platforms will cross 50-55% by 2025, crossing Hindi. This growth will spur marketers to tap into audiences outside the English and Hindi speaking ones.

Cheap data has been a major catalyst for both change and innovation in this sector with the pandemic driving it further over the last two to three years. Projections that we had made for 2025/26 have been met already with this consumption and adoption. That has also changed strategic thinking, leading to increased investments and deal-making to take advantage of these changing consumer patterns.

Alongside regional, the popularity of international content in India is such an encouraging development. The ability to attract a wider audience through subtitles and dubbed content, has seen Indian audiences consume a greater variety of content including Korean, Spanish, and Israeli shows, spurring Indian tastes and influencing our content as well. Even though consumption takes place largely among SEC A and urban audiences, there are shows that are breaking through to wider India and are influencing the way even Indian entertainment is made making it palatable to the rest of the world. The way the treatment is done, the way the stories are told, appeals to many countries around the world and expands the boundaries for our own industry. This increases our markets as well as our soft power. In the medium term, regional content will continue to grow at 10-13% growth for print and TV.

These OTT trends have forced many streaming companies to revise their original strategies. Pricing for streaming services will remain competitive as service providers attempt to stabilise and consolidate their customer base. In a rapidly evolving market, streaming players will focus on customer acquisition instead of customer churn. As prices stabilise and content libraries become nuanced and structured, the focus will shift to the minimization of churn. Though, fierce competition is likely to persist in the short-to-medium term with more than 40 service providers in the fray. Streaming market projected in our TMT 2022 report is poised to grow at 20-22% CAGR to reach US$12-15 billion over the decade.

All of this does not mean that traditional media is dead or dying. Linear television will continue to live alongside streaming, because India is still a majority 90% plus single TV household country, where families will watch TV together, as for individual content they will move to their mobile phones and watch streaming content so we will as a market, exist in both universes simultaneously. For advertisers, linear TV is still the cheapest way to reach a mass audience for an awareness campaign or a branding campaign. Therefore, the value proposition for traditional media still exists. As for print media—India is still one of the few countries where print is still growing, especially regional media.

As the regional content eco-system evolves and matures, the quality of content will rise to meet consumer expectations which are being formed by exposure to international content. This exposure will see an upward trajectory in terms of production standards, and creative inputs and is likely to lead to becoming the largest piece of the Indian entertainment ecosystem.

About the author:

Jehil Thakkar, Partner and Media & Entertainment sector leader, Deloitte India