TV subscription falls as more viewers opt for streaming platforms

TV subscribers in India fell from 153 million last year to 150 million this year

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Video killed the radio star, as the slyly prophetic hit song from the 1980s went. And now, it seems, streaming services on devices could sound the death knell for the starry days of television.

For the first time in many years, TV subscribers in India are falling—even as those subscribing to digital streaming platforms like Netflix and Hotstar have seen a rapid rise. The number of cable and satellite TV homes in the country fell from 153 million last year to 150 million this year.

The sudden change has been highlighted in the just-unveiled Media & Entertainment report by global consultancy firm KPMG. Though this trend of TV viewers discontinuing their cable/satellite subscription opting in favour of streaming services (termed OTT or Óver The Top' platforms) is gaining traction in the US as well as developed markets and is called 'çutting the cord', this is the first time data has emerged of the possibility of a similar trend taking place in India.

The fall in TV subscribers could be as high as 15 million households, according to the report. “There was an erosion in the active subscriber base in the last quarter,” the report notes about TV subscriber base in the country. “The potential reasons for this decline were non-renewal of subscription, transition of subscribers to alternate sources of entertainment like OTT platforms and certain blackouts due to the implementation of the New Tariff Order (NTO).”

The report takes pains to indicate that the 'çutting the cord' effect was only minimal, based on industry discussions. However, it does point out the rapid rate at which OTT platforms have increased in recent years—there are 300 million OTT users in India as of March this year—and rising. The report cites increased demand for content being facilitated by high speed and affordable internet, growth in smartphone penetration, increase in broadband users as well as the spread of smart TV.

With gripping original content, as well as access to a host of TV feeds, and the ease of watching at the time of your convenience and on whichever connected device you choose, it is a no-brainer that streaming platforms are increasing in popularity by the day. In India, users also attribute the incessant commercial breaks on satellite channels also as one of the reasons they switch to platforms like Netflix, which does a good job of marketing its edgy, well-crafted original content, along with a host of mainstream TV series as well as marquee films. It is perhaps sensing this trend that conventional TV biggies like Star, Zee and Sony have all got on the OTT bandwagon with their own platforms which offer a feed of their live TV, as well as back programming. Apple is set to start its OTT service, Apple TV, in India this November, according to reports.

“Digital is likely to be the second largest segment (in the media space) and attract the highest marketing spend among all media formats,” points out Girish Menon, partner & head (media & entertainment) of KPMG in India. “Evolving technologies are also presenting opportunities for companies in the media and entertainment industry to achieve greater operational efficiencies.”

The report also quotes the phenomenal rise of OTT's like Netflix in the US, where it is estimated that more than one-fifth of the American population will stop watching pay TV in favour of OTT platforms in less than three years. “A decline in Pay TV subscribers was also noted from 2017 to 2018 in developed economies like Japan and Australia,” the report notes. Will India be next?