Long & short of video use: India 2 times faster than China, says Bain & Co

Online video user penetration here is about 60% of Internet users versus over 90% in China

If you are among those who took to watching videos over the last year, especially during the pandemic-induced lockdowns, you are part of India’s ballooning online video user base, which is now over 350 million, and growing at 24 per cent annually from 2018 to 2020—two times faster than countries such as China and Indonesia.

What’s more, the time spent by active users per day on online videos has increased by 60-70 per cent over this period, a report by management consulting firm Bain & Company, titled “India Online Videos–The Long and Short of It”, has found.

The report also said the Indian Internet user spends more time online than several countries globally, including China. Most of this time, a staggering one hour per day for a smartphone user, is spent consuming videos. 

Despite these seemingly high numbers, India has huge headroom for growth in the sector. Online video user penetration in India is about 60 per cent of Internet users, compared with more than 90 per cent in China. India has about 640 million Internet users, of which, about 550 million are smartphone users, the report said. 

The authors of the report identify short-form video (SFV) as videos between 15 seconds and 2 minutes in duration, and long-form videos (LFV) as those which are more than 2 minutes long. Videos can be made by users or professional creators, and they may be pre-recorded or live-streamed. A mix of global social media and entertainment giants as well as local specialist platforms are getting into the online video action, the report said.

India’s SFV market, which took off with the entry of TikTok, continues to grow even after the exit of the Chinese player. It has risen 3.5 times in user base and 12 times in terms of the total time spent by all users on SFV platforms. More than 200 million Indians watched SFVs at least once in 2020, with an active user spending up to 45 minutes a day on these platforms.

LFV is viewed by 350 million to 400 million users, almost twice as much as SFV, the report found. This format, too, has seen substantial growth, with users and usage increasing nearly 1.5 times from 2018 to 2020. 

Active users spend more than 2.5 hours per day on long-form content, helped by the Covid-19 lockdowns and stay-at-home advisories during the pandemic. LFV is expected to grow from 600 million to 650 million users in India by 2025.

The report, put together by Bain & Company partners Arpan Sheth, Shyam Unnikrishnan,  Sriwatsan Krishnan and associate partner Manan Bhasin, provides interesting insights into video consumption habits and the strategies these players need to focus on to capture more market share.

Both LFV and SFV are being targeted by technology giants like Instagram (Facebook), YouTube (Google) Netflix, and Amazon Prime. The SFV space has many players, too —  a mix of the biggies (Instagram Reels, Facebook Reels, Snapchat Spotlight), standalone apps with SFV as a core offering in a larger ecosystem (Moj, Josh, MX TakaTak, Roposo, Zili), pure play SFV players (Mitron, Trell, Chingari), and long-form players diversifying into SFV content (YouTube Shorts).

Trends in Short-Form Video

“Internet access with cheap and ubiquitous data, easy-to-use platforms, and a high proportion of vernacular content will aid short video scale-up in India. By 2025, three in four Internet users, or 600 million to 650 million Indians, will consume SFV, on average spending 55 to 60 minutes per day on SFV platforms,” the report says.

The key components of the SFV ecosystem are the users, creators, and advertisers, who are linked by a tech-enabled digital platform.

India’s short video user base has been largely men from tier-2 and smaller towns, but this is evolving as the media gains popularity amongst women as well.

Brands are also 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, the report says.

“This is not necessarily a ‘winner takes all’ market. Market leaders will have to focus on three areas to develop a large, engaged community of users and creators...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 plenty of capital to achieve these goals and deliver on their potential,” the report says.

Trends in Long-Form Video 

The growth in LFV, according to the report, 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.

A strong push on regional and vernacular content will accelerate this even further. Currently, 85 per cent of content viewed in LFV is non-English, and 30 per cent is in languages other than English or Hindi.

While YouTube has always been the juggernaut in the LFV space, other players are growing fast. Examples include paid subscription-based platforms, such as Netflix, Prime Video and Disney+ Hotstar, which saw a sharp uptick in the number of users last year, especially during the first lockdown from March through June 2020.

Sports content has helped players such as Disney+ Hotstar expand their user base significantly, with the platform seeing a 50 per cent increase in monthly active users during the Indian Premier League in 2020.

“While there could always be some partnerships or mergers in the next few years, there are no imminent signs of consolidation in the space. Content drives differentiation, and it is possible for multiple platforms to co-exist in steady state, as seen in developed markets,” the report authors noted.

The LFV market has more than 50 platforms, with four main types of players- global giants (YouTube, Netflix, Prime Video, Disney+ Hotstar), platforms from television broadcasters (SonyLIV, ZEE5), specialist Indian platforms (MX Player, Eros Now), and aggregators (JioTV).