India’s OTT boom: Big streams, bigger monetisation hurdles

India's entertainment landscape is shifting from cinemas to smartphones. Cheap data and affordable devices have fueled an 'OTT gold rush' transforming how over half a billion Indians consume content. But this digital boom isn't a guaranteed win. Turning viewers into paying—and staying—customers is a complex battle against piracy, tight margins, and fierce competition.

It is not only about the best shows but also about mastering the Indian rupee, understanding a diverse market, and constant innovation. Intense competition puts immense pressure on platforms to convert viewers into revenue, one click and view at a time. This is the core challenge: monetisation.

Turning viewership into sustainable revenue in India's OTT market is a complex balancing act. Currently, platforms rely on a mix of strategies, including subscription fees (often tiered), advertising revenue, and, to a limited extent, transactional models. However, each approach faces significant hurdles.

While subscriptions offer recurring revenue, Indian consumers’ value-consciousness creates a ‘subscription squeeze’. The willingness to pay for digital content remains lower than in western markets. A platform might attract users with a blockbuster show, but if the overall library isn’t compelling, those users may turn away, making it difficult for the channel to recover the content and customer acquisition costs. Furthermore, content leakage and piracy contribute to the erosion of potential subscription revenue.

While advertising is essential, platforms must balance revenue generation with user experience. Furthermore, the ad tech capabilities of many Indian OTT platforms lag behind those of global giants like YouTube. This limits their ability to effectively target ads, optimise ad placements, and provide advertisers with the granular data and performance metrics they demand. This means a significant portion of potential ad revenue remains untapped.

To stand out, platforms need exclusive, high-quality content. The battle for these rights is incredibly expensive, creating a high-risk investment cycle for platforms. This significantly impacts the smaller players, for whom securing brand sponsorships becomes significantly more difficult.

For sustainable success

Surviving, and thriving, in India’s OTT market requires a deep understanding of the Indian consumer, a willingness to experiment, and a relentless focus on delivering value. The most successful platforms are deploying a multi-pronged strategy, centered around three core pillars: irresistible content, irresistible pricing, and irresistible engagement.

Content, community, and personalisation

'Content is king' is a cliché, but in India, it is also an understatement. It is not enough to simply offer a vast library; platforms need a curated library, filled with content that resonates with Indian sensibilities. This means investing in high-quality, exclusive series and movies that tell Indian stories, in Indian languages. The success of shows like Sacred Games, Mirzapur, and Panchayat proves that viewers will pay for content they can't find anywhere else.

OTTs must also focus on regional content and expand their offerings in Tamil, Telugu, Bengali, Marathi, and all other regional languages. This isn't just a translation; it's original content reflecting India's diverse cultures.

The most sophisticated platforms employ data analytics to understand viewing patterns, identify emerging trends, and personalise recommendations. This data-driven approach can bring improvements in content acquisition as well as creation, maximising the chances of success.

However, creating great content is only half the battle won. Platforms must build communities around their shows to foster loyalty. This means they have to invest in social media engagement, live Q&As with creators, and using AI to personalise the user experience—keeping viewers hooked and reducing the churn.

The pricing strategies

The Indian consumer is a master of value. Reaching a mass audience requires a pricing strategy that acknowledges this reality. The one-size-fits-all subscription model is largely obsolete. Instead, successful platforms embrace a tiered pricing model. They offer a range of subscription plans – from premium, ad-free options to more affordable, mobile-only plans – to cater to different income segments. OTTs may even think beyond the subscription box and explore alternative payment models.

These may include micro-transactions (paying per episode) or ‘sachet pricing’ (daily or weekly passes), to cater to viewers who may be hesitant to commit to a full subscription. Lastly, they can explore budling options through partnerships. For instance, partnering with telecom operators to offer OTT subscriptions as part of mobile data packages is a win-win, providing convenient access for consumers and a massive distribution channel for platforms.

The monetisation mix

Relying solely on subscription revenue is a precarious strategy in India. The most forward-thinking platforms are diversifying their income and transforming advertising from a potential annoyance into a (potentially) valuable service.

• Making ads smarter, not just frequent: This is where technology, particularly machine learning, is becoming a game-changer. Platforms are moving beyond basic demographic targeting to create hyper-personalised ad experiences, offering granular audience segments, intelligent ad insertion to minimise disruptions, and focusing on outcomes (app installs, website visits) that offer advertisers higher ROI.

• Beyond traditional advertising: Platforms are getting creative to generate income and engage users: affiliate marketing (subtly integrating product links within the platform), merchandise (capitalising on popular content), and brand integrations (collaborating with brands to weave their messages organically into storylines) and content licensing.

The initial hype surrounding India’s OTT market has subsided. Now comes the real test: building sustainable, profitable businesses in a dynamic but challenging environment. Platforms can no longer simply replicate strategies from other markets; they must understand the Indian consumer, innovate relentlessly, and balance content, pricing, engagement, and monetisation with flawless execution.

The ultimate differentiator will be the ability to leverage data—not just collect it, but transform it into actionable insights through advanced analytics and machine learning. This intelligence is no longer optional; it is essential for personalising the user experience, optimising pricing and advertising, making smarter content decisions, and shaping the future of viewing. The winners in this high-stakes game will possess the sharpest vision—a vision powered by data, fueled by AI, and focused on delivering a truly personalised and profitable experience.