Online content demand to rise rapidly with 4G: Deloitte

With greater rollout of 4G services in the country, consumer demand for online content will increase rapidly in the coming years, says Deloitte.

"4G will bring complete transformation of... television viewing experience and mark a shift in the control from the broadcaster to consumer. Further, low-cost smartphones bundled with low tariff will help in boosting the Internet usage in India over the coming years," a Deloitte report said.

4G services increase the capability to offer high quality content. With India becoming a digital platform, even rural users will prefer online content, it added.

Rural users account for 35% of India's Internet community despite representing over 60% of the country's population.

In the coming years, digital platform like digital audio and video on demand service will see increased activity. Hence, getting the right business model will be very crucial, Deloitte said.

Once better bandwidth by way of 4G is available and appropriate content is programmed, this platform can see reasonable growth in the coming years, it further said.

India has become the third largest country in terms of Internet users. The total number of Internet subscribers had reached 319.42 million by the end of June 2015.

According to Internet and Mobile Association in India (IMAI), the Internet user base will cross 500 million by 2018, with rural Internet users alone being almost 210 million.

Traditional TV services are well accepted and direct TV is still the chosen option, but OTT (over-the-top) is the new consumer reality which is changing ways of TV consumption for large masses, Deloitte said.

OTT is the delivery of film and TV content through the Internet, without requiring users to subscribe to a traditional cable or satellite. Online video, however, remains largely driven by YouTube and other social networking sites.

According to a Media Partner Asia (MPA) report, India's active OTT video subscribers in 2014 were 12 million and is expected to grow to 105 million by 2020. Though OTT media is growing faster, there is quite a long way to go.

"Currently, most of the OTT players are generating revenue through ad supported models. OTT players are devising product and service offerings that lure free users to become paid subscribers," Deloitte said.

Media companies like Star, Sony Pictures Networks, Zee, Eros and Reliance Entertainment have begun offering OTT video on demand (VoD).

Deloitte believes that apart from traditional broadcaster, OTT VoD remains the win-win situation for both customers and service providers.

It expects regional content to also be in demand, as a survey conducted by Vuclip shows that 78% of the users prefer watching content in their native languages.