Online video consumption has skyrocketed amid the coronavirus pandemic as ‘work-from-home’ becomes the norm. India’s online video user base has scaled to more than 350 million people, growing 24% over 2018 to 2020, nearly twice as fast as markets such as China and Indonesia, a new research has revealed.
According to a report titled ,“Online Videos in India— The Long and Short of It”, released by Bain & Company—video content is the now, but short form video content is the future. The report suggests that by 2025, India will be home to 650 million users who consume short-form videos.
Interestingly, usage per active user has also grown dramatically—the daily time spent per active user on online videos has simultaneously grown by 60% to 70% over 2018-20. Majority of time spent on smartphones is on entertainment, primarily watching videos, said the report.
Arpan Sheth, partner and global leader of Bain & Company’s Vector Solutions Group, in a statement, said,“India has a large digital community, with about 640 million Internet users and 550 million smartphone users which is rapidly growing and spending more time online. Smartphone users spend about 4.8 hours on their devices daily, of which a staggering one hour on average is spent consuming videos. Despite this rapid boom, there exists massive headroom for growth—online video user penetration in India is nearly 60% of Internet users, compared with more than 90% in China.”
Short-form videos (SFV) are between 15 seconds and 2 minutes, and long-form videos (LFV) are more than 2 minutes long. The lines across these segments are increasingly blurring, as platforms expand their offerings to capture a greater share of consumer time in catering to broader consumer needs and occasions to enhance stickiness. For instance, Instagram now has Reels, IGTV, and IG Live. YouTube has recently introduced YouTube Shorts in India.
It is worthy noting that the SFV market has taken off over the past two years, growing 3.5 times in user base and 12 times in total time spent by all users on SFV platforms.
Shyam Unnikrishnan, partner and a leader in Bain & Company’s Consumer Products, Retail, Strategy and Digital practices in India, said: “The SFV ecosystem which essentially comprises users, creators and advertisers are key to driving economics for the platform. Brands are increasingly using short video platforms to reach their target customers. New monetisation models, such as video commerce, live streaming, and in-app purchases, will become increasingly commonplace in the coming years. Players need to invest in developing an advanced, tech-enabled platform to link users, creators, and advertisers and deliver a seamless experience to all.”
India’s short video user base has historically been largely men from Tier-2 and smaller towns, but this is evolving quickly, with the medium gaining traction in metros and amongst women as well.
Rapidly growing access with cheap and ubiquitous data, easy-to-use platforms, and a high proportion of vernacular content will only aid short video scale-up in India. At least 200 million Indians watched SFVs at least once in 2020, with daily active users spending up to 45 minutes a day on these platforms, the report claims. India has more than 50 million users who have created and posted at least one short video.
The report notes that by 2025, three in four Internet users, or 600 million to 650 million Indians, will consume short-form videos, with active users spending upto 55 to 60 minutes per day.
The Indian SFV market is now occupied by a mix of specialist made-in-India short form video apps like Moj, Josh, MX TakaTak, Roposo, Zili. These apps have more than 100 million downloads each.
Content creators are active on multiple platforms and are increasingly monetising their follower base through brand collaborations and commerce. All this is giving rise to a robust creator economy—an enabling ecosystem of players helping creators with content creation, monetisation, financing, and business management.
Sriwatsan Krishnan, partner and a leader in Bain & Company’s Private Equity and Alternative Investor practice in India, said: “Market leaders will have to focus on three areas to develop a large, engaged community of users and creators. First and foremost, they will have to make substantial investments in technology to deliver a hyper-personalised experience to users, optimise user interface (through faster app and video load time, etc.), and expand access via vernacular interfaces. Winners will simultaneously focus on creator enablement and lock-in on one side, and creation of scalable monetisation engines on the other. Successful players will need access to large amounts of capital to achieve these goals and deliver on their potential.”
Long-form videos (LFVs) are viewed by nearly 400 million users, almost twice as penetrated as SFV. The format has seen substantial growth, with users and usage increasing nearly 1.5 times from 2018 to 2020.
The report reveals that active users today spend more than 2.5 hours per day on long-form content. Frequent COVID-19 imposed lockdowns and stay-at-home advisories during the pandemic further propelled these numbers.
LFV is poised to grow to 600 million to 650 million users in India by 2025. This growth will be driven by a steady increase in the Internet user base; access to cheaper, faster data; the introduction of more affordable plans, including the advent of freemium models; and a proliferation of content.