India, as per Cisco’s VNI report is poised to have 650 million smartphones by 2019. That’s like 650 million personal televisions in user pockets. In comparison, there are only ~168 million TV households in India – a majority of which are single TV households. The kind of scale that we are looking at over the next few years makes the mind boggle. The only stumbling block, towards the rapid ascent of the Video-On-Demand (VOD) space in India, remains the infrastructure for high-speed low cost wireless Internet.
However, it isn’t all smooth sailing for VOD industry. The first challenge facing VOD service in India today is the cost of data. Streaming video, consumes larger quantities of data than say, messaging services like WhatsApp. A 3 hour movie, at a decent rendition would be ~250MB at the very least. 1 GB of 3G data costs approximately ~Rs. 150 across telecoms today, so streaming an entire movie would cost Rs. 40 approximately. In a country where the ARPU per telecom subscriber is on average about Rs. 200, Rs. 40 is a fairly significant amount.
High data costs have meant that VOD service providers have had to innovate to deal with this issue.
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