"Reliance Jio to gain 420 million subscribers by 2023": MPA's Vivek Couto

Vivek Couto, owner and co-founder of research and analysis firm, Media Partners Asia, spoke about the digital video space in India, APAC. At the recently concluded digital video convention, vdonxt asia Couto mentioned that India is a very attractive market when it comes to digital video. "... with 10 million paying SVOD customers and a significantly growing online video advertising market," said he.

Vivek Couto

According to him, it is because of the size of Indian market, a number international players are working hard to have strong businesses locally. "Facebook is already making significant changes in the way they operate in India with the new team and how it reports directly to the US. Disney is as well. Grabbing that consumer and advertising pie in India is very important as China is somewhat restricted," he said.

Couto believes a lot has changed since September 2016, following the launch of Reliance Jio. "Reliance has invested close to 40 billion dollars to become the largest distribution platform in India for both linear and nonlinear video. In that period alone Reliance added $50 billion to its market cap," he said. Couto shared his observation, "The level of disruption from Reliance in the telco space was such that many CEOs of telecom companies have said, what Reliance did in two years most telcos plan to do that in 10 to 20 years."

"Jio gained 100 million subscribers within 170 days of its launch, went pay in July, that didn't substantially hinder that growth. In September 2018 they crossed 250 million subs. It is projected to maintain that growth momentum in our opinion and MPA expects it to cross 420 million subscribers by 2023," added Couto. "That growth is followed by the increase in investment in video ecosystem: partnering with OTT platforms for premium video content such as IPL, then equity investment in television and movie production studios (Balaji and EROS), then launching Jio TV, Jio Cinema, sub-brands like Jio Originals and Jio Cricket," he asserted.

According to him, India is following the same trajectory where the IP owners try and monetise their platforms and content. The issue however, he believes is technology, "Scaling the tech is proving out to be quite challenging for IP owners. Some are raising red flags in South East Asia and doing deals with YouTube, some are going on their own and hoping they will get a big investor coming in while some are going on their own and may be they will get the Chinese in at some stage," he opined.

Sharing the market estimates, the owner and co-founder of the research and analysis firm said, "At the end of 2017 the online video market in Asia Pacific was $16 billion and is expected to be a $48 billion opportunity by 2023. 30 to 32 billion ($) from advertising, $18 billion from subscription. Now if you look at India in context to the overall APAC market it's share is only 5 per cent. If you strip out China because of the complexities and regulations then India counts to close to 20 per cent share."

As per MPA estimates, in revenue terms India's online video market was around $750 million in 2018, heavily skewed towards AVOD, "That AVOD segment alone is expected to grow at 27 per cent CAGR over the next five years to be around $1.6 billion by 2023. The subscription segment has started to open up slowly and is expected to add about $800 million to make the online video market $2.5 billion opportunity by 2023," he concluded.