An Analysis of Consumer Preferences

Towards OTT Platforms

Ajit Kumar 19008

Arnav Agrawal 19023
Dhruv Guptaa 19055
Dibyans Agrawal 19056

Shaheed Sukhdev College of Business

Studies
K.N. Katju Marg, Rohini Sector 16
New Delhi 110089
Table of Contents

Serial No. Chapter Page No.

1 Executive Summary 1
2 Introduction 2
3 Objectives of Research 4
4 Research Methodology 5
5 Data Collection 5
6 Sample Profile 6
7 Findings and Analysis 8
8 Conclusion 20
9 References 23
10 Appendix 24
Executive summary
The way people consume media is evolving with the rapid changes in technology and
increasing rate of internet penetration across India. The rise of over-the-top internet media
services has begun to disrupt the media space. OTT channels provide the ability to watch,
at your own leisure, the movies and TV shows that you like. Though television is used by
most of the country's people, we can see a shift towards OTT channels such as Netflix,
Amazon Prime, Hotstar and many more. Although relative to television, some of these
services can charge a premium rate, they provide several benefits that make them an
exciting choice.

This research project aimed to understand the OTT sector better, to study the consumer
preferences towards the OTT video industry in India, and the underlying influencing
factors and the variables which impacted the usage of OTT video platforms. The study
also focused to investigate the influence of COVID-19 pandemic on consumption of OTT
platforms in India, as it led to the reshaping of consumer content preferences.

Keywords: OTT services, COVID-19, Lockdown, Pandemic, Viewership

1
Introduction

Over-the-top (OTT) video streaming services that offer direct streaming services to the
viewers have been gaining popularity throughout the world in the past few years. OTT
video platforms have seen a substantial rise in video on demand (VoD) compared to
traditional video, as the viewers can access the media content of their choosing
anywhere, at any time. The OTT video industry in India is expected to increase at a
phenomenal CAGR of 28.6% between 2019 and 2024.

Emerging economies such as India are lagging behind, relative to developed countries.
In emerging economies, people are sceptical of spending on OTT platforms and prefer
the usage of free content available online. However, since the past few years, India has
also seen a paradigm shift from traditional television to OTT platforms. According to a
BCG report, 16% of India’s media consumption is already on digital platforms.

The evolution of OTT platforms is led by a change in people’s preferences, change in

technology, convenience and more. The emergence of Netflix, Hotstar, Amazon’s Prime
Video, Sony Liv, etcetera, has begun to question conventional television dominance. A
large part of this build-up has to do with the majorly young population and the immense
growth in internet penetration that has occurred in the past decade. With the spread of
accessible internet services and cheap mobile phones, the entertainment industry has
expanded from the conventional media of print and more recently television, to internet
media.

An abrupt increase in usage of OTT platforms has been seen because of the outbreak of
COVID-19. The pandemic gained widespread attention by early March 2020 in India. The
prevalence of lockdowns due to the COVID-19 pandemic has snowballed the popularity
of OTT platforms. Staying at home, coupled with movie theatres being shut down has
greatly contributed to this rise. Just between March and July 2020, India’s OTT sector
witnessed a 30% rise in the number of paid subscribers. A lot of people have subscribed
to OTT platforms to get quality content with quantity and without any advertisements.
There are a lot of variables such as annual income, age, no advertisements and
convenience that have impacted the growth of OTT platforms during the outbreak of
COVID-19.

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Figure 1 – Number of OTT Video subscriptions in millions

Source: https://www.ibef.org/blogs/india-s-ott-market-witnessing-a-rise-in-number-of-paid-subscribers

There's no re-thinking in the way that the OTT business will be the substance of the Media
and Entertainment Industry in the coming years. The most common forms of OTT are
advertising video on demand (AVoD) and subscription-based video on demand (SVoD).
SVoD has registered a 55-60% YoY growth in India in 2020, with more than half of these
new users likely to continue using the service. It is expected to be the prime revenue
driver of OTT video in India, at a CAGR of 30.7%. The report said tier-two, three and four
towns have taken the lead in availing OTT services by clocking 1.5 times the number of
new OTT (over-the-top) users as compared to metro and tier-one cities during the
pandemic. In any case, the high development in Indian crowd leaning toward the online
media entryways makes the subcontinent an OTT showcase with incredible potential.

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Objectives of Research

1. To study the consumer preferences towards the OTT video industry in India.

2. To analyse the influence of the COVID-19 pandemic on the consumption patterns

of OTT video platforms.

4
Research Methodology

The research is a conclusive market study to arrive at findings by conducting planned and
structured primary research via surveys. The perception of consumers was determined
based on the analysis of our findings. Survey responses were obtained from a single
sample of respondents only once. Hence, the single cross-sectional descriptive research
design was appropriate for this research process.

Data Collection

Primary data
Primary data was collected via unsupervised questionnaires using Google forms. These
were sent to respondents who live in India via digital platforms including WhatsApp,
LinkedIn and other social media platforms wherein data was only used for academic
purposes. Convenience sampling i.e., a type of non-probability sampling was conducted
to draw samples from the population close at hand, in the month of March 2021.
Respondents were asked questions regarding their preferences related to price, type of
content, quality and convenience for the OTT platforms along with demographic questions
like age, occupation, gender etc., in the form of multiple-choice questions, matrices and
scales.

Number of respondents - 152

Secondary data
With the support of the Internet and other media outlets, secondary data will be obtained.
Information will also be gathered from industry reports and websites of OTT media
channels.

5
Sample Profile

Age

Figure 2 - Age

The majority of our respondents were from the 18-22 years age group, followed by 36-50
and 23-35 years, with a few respondents each below 18 years old and above 50 years
old.

Gender

Figure 3 - Gender

There were more male respondents than female respondents with a negligible number of
respondents who preferred to not specify their gender.

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Occupation

Figure 4 - Occupation

The majority of our respondents were students, followed by working employees. Self-
employed respondents and home-makers made up most of the rest of the respondents.

City of Residence

Figure 5 – City of residence

Just over half of our respondents reside in tier-1 cities, followed by tier-2 cities and a small
portion from tier-3 cities.

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Findings and Analysis

The following six figures show the respondents’ agreement with the given statements on
a scale of 1 to 5, 1 being strongly disagree, 2 being disagree, 3 being neither agree nor
disagree, 4 being agree and 5 being strongly agree.

Figure 6 - Content available on OTT platforms is better than that on traditional media like TV

A majority of our respondents (82.9%) agree that the content available on OTT platforms
is better than that on traditional media like TV.

Figure 7 - OTT services provide more regularly updated and new content than traditional media like TV

A majority of our respondents (77.7%) agree that the OTT services provide more regularly
updated and new content than traditional media like TV.

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Figure 8 - OTT services provide more value for money than traditional media like TV

A majority of our respondents (65.8%) agree that the OTT services provide more value
for money than traditional media like TV. However, a comparatively higher proportion did
not agree, as compared to the other questions.

Figure 9 - OTT services provide more convenience and flexibility than traditional media like TV

An overwhelming majority (91.5%) of our respondents believe that OTT services provide
more convenience and flexibility than traditional media like TV.

Figure 10 - OTT services provide a better overall user experience than traditional media like TV

The majority (86.2%) of the respondents believe that OTT services provide a better
overall user experience than traditional media like TV.

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Figure 11 - Less censorship and regulation of content on OTT, as compared to TV, is an advantage for OTT

Almost 70% of our respondents believe that less censorship and regulation of content on
OTT, as compared to TV, is an advantage for OTT. On the other hand, more than 8%
disagree with this statement, the highest among all the questions.

Figure 12 - Cumulative response from all six questions

The cumulative response from the 6 questions above comparing OTT and DTH services
can be determined on a scale of 6-30 (both inclusive) by simply adding up all the
respondent’s respective opinions on each 5-point question. The resulting histogram
visualizes this cumulative response and illustrates that the highest number of respondents
gave a score of 26 or 27 out of 30, with the vast majority being skewed towards the mid
to upper 20s. Therefore, it can be inferred that the general consensus on OTT services
being a better choice than DTH services is majorly positive. This can be further confirmed
using the following table:

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 Table 1 - Average level of agreement with each statement

Figure 13 – Types of content

The OTT platform is used by our respondents mainly to watch or consume Movies and
Web Series followed by TV shows, Documentaries, Sports and News.

Figure 14 – Genres of content

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The content consumption encompasses different genres for our respondents with
Comedy and Thriller/Mystery being the first choice for almost everyone followed by
Drama and Action.

Figure 15 – Devices used to consume OTT content

Laptop/PC, Mobile phones and Smart TVs are most preferred devices for consumption
of OTT content.

Figure 16 – Importance of different attributes while choosing a particular OTT service

• Almost every respondent believe that subscription rate is either extremely or

slightly important while choosing an OTT platform.
• The OTT platforms must provide mobile friendly experience to the users and the
respondents tend to choose a particular OTT platform if they provide good
experience in mobile.
• When any respondent wishes to choose OTT platform over other platforms, the
customer gives preference to navigation of content in their application and wishes
the whole process to be easy and handy.

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 • Most of the respondents believe that recommendations from the OTT Platforms
must be appropriate and as per the content consumption pattern of the user.
• The respondents believe that original or exclusive content is the major aspect
before choosing any OTT platform or switching over other platforms.
• The respondents had a mixed response to regional language content.

Table 2 - Average level of importance given to each attribute

The importance given to each parameter was coded from 1 to 5, 1 being not at all
important and 5 being extremely important. The above table shows the average
importance thus given to each attribute by the respondents. We can see that subscription
rate and exclusive/original content were most important while regional language content
was the least important attribute for our respondents.

Figure 17 - Most used OTT platform

The most used OTT platform among the options given in the questionnaire was Netflix
with 55.3% followed by Amazon Prime Video (24.3) and Hotstar (14.5%). While the
popularity and viewership of platforms like Sony Liv, Zee 5 etc. have substantially
increased but they still lag behind in the category of most used or preferred OTT platform.

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 Figure 18 - Services subscribed to

67.8% of the respondents are subscribed to both DTH and OTT platforms while 32.2% of
the respondents are subscribed to only OTT services.

Figure 19 – Additional OTT platforms used before the Covid-19 lockdown

Before the lockdown, Amazon Prime Video was the most subscribed OTT platform by our
respondents, closely followed by Netflix. 75% of our respondents were using Amazon
Prime Video before the lockdown. 5% of our respondents were not using any OTT
platform before Covid-19.

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 Figure 20 - OTT platforms used after the Covid-19 lockdown

40% of our respondents did not start to use any additional OTT platforms after the
lockdown. Additionally, all of these respondents were using at least 1 OTT platform before
the lockdown.

Figure 21 - Hours spent consuming OTT content before the Covid-19 lockdown

Before the lockdown, the majority of our respondents (53.3%) spent less than 1 hour on
OTT platforms, with 35.5% spending 1 to 3 hours, smaller portions spending between 3
to 8 hours, and no respondents spending more than 8 hours per day.

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 Figure 22 - Hours spent consuming OTT content after the Covid-19 lockdown

After the pandemic hit, there was a substantial overall increase in the number of hours
per day spent on consuming OTT content. Most notably, the number of respondents
spending 3 to 5 hours per day on OTT quadrupled due to the lockdown. The 5 to 8 hours
and more than 8 hours per day categories also saw an increase in respondents.

Figure 23 - Preferred pricing model

The platforms which gained the most users after lockdown were Hotstar and Sony Liv. It
is to be noted that Hotstar’s integration with Disney+ was launched during Covid-19 in
April 2020, possibly driving the acquisition of new customers.
On the other hand, Jio TV and Netflix gained the least number of customers among our
respondents after the lockdown.

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Figure 24 - Preferred payment interval

48% of respondents for this questionnaire wish to pay the subscription fees for the OTT
platforms annually while 25% of respondents wish to pay monthly and just over 26% had
no preference for the payment intervals with 0.7% of respondents choosing quarterly
payments.

Figure 25 - Price willing to pay per year before the Covid-19 lockdown

Before Covid-19 Pandemic 34.2 % of respondent were paying 0-500 rupee in total for the
subscription of OTT platform, 33.6 % of respondent were paying 500-1000 rupee in total
for the subscription of OTT platform, 19.1% of respondent were paying 1000-1500 rupee
in total for the subscription of OTT platform, 5.3 % of respondent were paying 1500-2000
rupee in total for the subscription of OTT platform and 7.9 % of respondent were paying
more than 2000 rupee in total for the subscription of OTT platform.

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Figure 26 - Price willing to pay per year after the Covid-19 lockdown

Since the Covid-19 pandemic lockdown the respondents are more willing to pay and
subscribe for the OTT Platforms with the increase in expensive payments options
compared to the situation before lockdown.

To determine the relationship between age of respondents and their preference of content
available on OTT platforms over traditional media like TV, Chi-Squared test is used.

Hypotheses:
Hₒ : Age of respondents and their preference of content available on OTT platforms over
traditional media are independent
H1 : Age of respondents and their preference of content available on OTT platforms over
traditional media are associated

Contingency Table:
The following contingency table was formed containing age groups and the agreement
with the statement ‘The content available on OTT platforms is better than that on
traditional media like TV’.

Table 3 - Contingency table

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Expected Values:

Table 4 - Expected values

Calculation of Test Statistic:

Table 5 - Calculation of test statistic

Degrees of Freedom = (Number of rows – 1) x (Number of columns – 1) = 4 x 4 = 16

(𝑓0 −𝑓𝑒 )2
Value of test statistic, χ2 = ∑ = 32.876
𝑓𝑒

Table value of χ2 at α = 5% and df = 26.296

Since the value of chi-squared is greater than the table value, we will reject the null
hypothesis at 95% level of significance.

Therefore, the respondents’ belief that OTT platforms provide better content than TV, is
dependent on their age.

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Conclusion

This study was a novel attempt to analyse the acceptance of the new emerging digital
media among the people of India. This new media platform is growing rapidly and is
gaining momentum as the day passes. The younger population is attracted towards the
OTT platform services due to foreign content, video on demand, more regularly updated
and new content and convenience. The new generation has moved on from the traditional
broadcasting system to mobile gadgets.

The survey was conducted across India and the data gathered was segregated, refined
and then classified and tabulated for analysis. The data which was collected through a
structured questionnaire via digital media was analysed using various tools in MS Excel.

All the respondents in our study were aware of OTT platforms and using it as an
alternative to or along with cable broadcast and DTH. 67.8% of the respondents are
subscribed to both DTH and OTT platforms while 32.2% of the respondents are
subscribed to only OTT services. The acceptance of the platforms was remarkable,
signifying a greater changeover in the near future.

OTT platforms are quite popular among the users as 53.3% spend less than 1 hours,
35.5% spend 1 to 3 hours consuming it. 7.9% spend 3 to 53.3% 5 to 8 hours, no user
spends more than 8 hours. Considering this, an average user spends approximately 3
hours on the medium. Further insights into the consumer attitude towards different
aspects of OTT platforms are as follows:

• Content: 82.9% respondents agree that the content available on OTT platforms is
better than that on traditional media like TV. 77.7% agree that the OTT services
provide more regularly updated and new content than traditional media like TV.
The major consumption is related to movies and web series, those too belonging
to comedy and thriller genres.

• Convenience: 91.5% of our respondents believe that OTT services provide more
convenience and flexibility than traditional media like TV. Laptop/PCs and mobile
are the most preferred platforms for viewing OTT content, even if the same content
is offered through smart TVs, which represents a shift being created by the OTT
industry in the way we approach the concept of entertainment.

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 • Interruptions and Regulation: Lower frequency or intensity of advertising on OTT
platforms is appreciated by consumers. Furthermore, almost 70% of our
respondents believe that less censorship and regulation of content on OTT, as
compared to TV, is an advantage for OTT. On the other hand, more than 8%
disagree with this statement, the highest among all the questions under
consideration.

• Pricing: 65.8% of respondents agree that the OTT services provide more value for
money than traditional media like TV. 48% of respondents prefer to have
subscription-based pricing model while 32.9 % of respondent prefer to have
Freemium (Limited free content, paid complete access) pricing model and 19.1%
of respondent prefer to avail bundled offers (e.g.: with mobile data packages). 48%
of respondents for this questionnaire wish to pay the subscription fees for the OTT
platforms annually while 25% of respondents wish to pay monthly and just over
26% had no preference for the payment intervals with 0.7% of respondents
choosing quarterly payments.

55.5% of our respondents started to use at least one additional OTT service after the
Covid-19 lockdown and 86.2% of the respondents believe that OTT services provide a
better overall user experience than traditional media like TV.

The most used OTT platform among the options given in the questionnaire was Netflix
with 55.3% followed by Amazon Prime Video (24.3%) and Hotstar (14.5%). While the
popularity and viewership of platforms like Sony Liv, Zee 5 etc have substantially
increased, they still lag behind in the category of most used or preferred OTT platform.

Before Covid-19 an average user spent approximately 3 hours per day on OTT platforms,
but Covid-19 Lockdown has led to a change in consumption patterns of the users. We
found out that 70.3% of people experienced an increase in their daily usage of OTT
consumption. Users on an average experienced 3 to 4 hours of increase with 20.4%
spending less than 1 hour, 40.1% spending 1 to 2 hours consuming it. 28.3% spend 3 to
5 hours, 9.9% 5 to 8 hours, 1.3% spend more than 8 hours on OTT platforms.

As per our analysis, subscription rate and exclusive/original content were the most
important factors for consumers while deciding upon an OTT platform while regional
language content was the least important attribute for our respondents. Also, the users
prefer that the content of their preference is easily available on the platform in terms of
navigation and the recommendations given by the platform. These are some important
factors for the platforms to focus on to expand market share in the post Covid-19 scenario.

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Yet, OTT players have been able to touch just the tip of the iceberg, there is immense
potential to dive deeper into the regional Indian market in times to come. With just 40 OTT
platforms and limited regional content, this medium has created a new niche for itself in
India, with Covid-19 playing a very significant role in its mass adoption.

OTT services are being perceived as an aspirational medium of content consumption and
with all the noise in the right circles, they are fast converting the fence-sitters across age
groups and demographic regions. Covid-19 brought with itself some factors which
became the new normal, like working from home, which have seemed to offer flexibility
of schedules to many. A random walk and tea time with a colleague have been replaced
with a 20 to 30 minute quick episode of one's favourite series available on an OTT
platform. All researches point to the growing duration of online video content consumption
year on year and Covid-19 has proved to be a turning point in furthering this behaviour
change.

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References
Global Entertainment & Media Outlook 2020–2024, 2020, PwC

Media & Entertainment Report, 2020, BCG, CII

India's OTT Market: Witnessing A Rise in Number of Paid Subscribers, 2020, IBEF

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Appendix

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