India’s Over the top (OTT) media service market is set to increase to 550 million users by 2022-23 from 300 million in December 2018 as users shift to mobile viewing from televisions or computers, as per a report.
Hotstar is the top player in India with a share of 28% in the Indian OTT market as of August 2019. It had nearly 62 million monthly active users as of August 2019, thanks to local content and digital rights to stream IPL matches. It is the only service with content partnerships with the top three global studios – HBO, Fox, and Disney.
But, the ground reality is Hotstar saw its losses increase by nearly 20%. Novi Digital Entertainment, which owns the video streaming platform Hotstar, has posted a two-fold increase in its revenue for the financial year 2018-19 to Rs 1,112 crore while its losses widened to Rs 554 crore from Rs 389 crore a year ago.
The company’s losses widened mainly on account of increase in content acquisition costs, which rose to Rs 673 crore from Rs 415 crore a year ago and advertising costs, which rocketed 200% to Rs 402 crore. Total expenses rose 73% to Rs 1,677 crore.
In March 2019, Star India and Star US Holdings provided $153 million funding to Hotstar ahead of the IPL tournament.