Making sense of the turbulence in the Indian OTT space

A young professional in Mumbai, stuck in traffic, watches a five-minute microdrama on her phone before switching to a 30-second reel. A family in Delhi, gathered after dinner, binge-watches an entire season of a crime thriller in one night. Meanwhile, a cricket fan in Bangalore streams a live T20 match, catching every ball on the move. This is the modern Indian entertainment landscape—fluid, fragmented, and fiercely competitive.

The days when television dictated what and when audiences would watch are history. Indian entertainment consumption has become deeply personal, shaped by individual moods, micro-moments, and the freedom to choose between short, snappy content and immersive, long-form storytelling. But as platforms fight for audience attention, the real battle is happening behind the scenes—where business models are shifting, regulations are tightening, and digital advertising is being rewritten.

For OTT platforms, the challenge today isn’t just about producing content—it’s about owning the audience’s time. The swift rise of microdramas and snackable content has introduced a new kind of engagement, one that mimics the scrolling culture of social media. However, does this shift come at the cost of premium, long-form storytelling? Or can these formats coexist, serving different audience needs?

The industry is at a fascinating crossroads: big players are swallowing smaller ones in a race for supremacy and government scrutiny is tightening its grip on digital storytelling. All of this, of course, has significant implications for advertisers, who now must decide how to allocate their budgets in the current ecosystem.

The rise of microdramas: Fast, furious, and lucrative?

If long-form storytelling is a seven-course meal, microdramas are the street-side chaats—quick, flavourful, and endlessly addictive. These ultra-short, emotionally charged narratives cater to India’s ever-dwindling attention spans, fueled by the rise of Reels, Shorts, and snackable OTT originals.

Platforms are increasingly experimenting with snackable content—short web series, quick stories under 10 minutes, and episodic narratives tailor-made for mobile screens. This format has become the digital equivalent of fast fashion—always fresh, highly consumable, and constantly evolving.

“Short-form content, particularly microdramas, is gaining traction because it aligns with changing consumption habits—quick, engaging, and easily shareable. It’s just like fast fashion—you want to keep up the tempo with something new & it helps you do that,” says Rajni Daswani, Director - Digital Marketing, SoCheers.

Yet, the rise of microdramas doesn’t spell doom for premium, long-form content. “The two formats can coexist, with short-form serving as a gateway to attract viewers and keep them engaged between longer releases,” Daswani adds. The real challenge? Monetisation. While short-form content can drive volume-based ad revenue, long-form storytelling still commands premium pricing and deeper audience loyalty.

Shrirang Nargund, Independent Media & Entertainment consultant, puts it bluntly: “Micro-dramas as ‘daily soap drama in short form’ don’t seem very promising unless done in an innovative way. Short-form content (SFC) has gained a definitive place as snackable entertainment, but long-form content (LFC) has the advantage of transcending into different worlds through storytelling.”

From a business perspective, the sustainability of microdramas hinges on maintaining consistency—both in quality and frequency. While short-form content excels in engagement, premium monetisation still leans towards immersive, long-form narratives.

Big fish, small pond: Consolidation & the battle for eyeballs

If there’s one thing the Indian OTT industry loves more than content, it’s consolidation. When Reliance’s JioCinema absorbed Viacom18 and started securing massive content deals—including streaming rights for the IPL (Indian Premier League)—it signaled the start of an aggressive new phase in the Indian OTT market. With Disney+ Hotstar and JioCinema merging and Amazon acquiring MX player last year, the industry is charting a new course.

“Disney is already merged here in India with Jio, which has a strong ad-tier model. Indian platforms are embracing a hybrid approach—subscription-driven yet ad-supported,” notes Nargund.

The rise of ad-supported video-on-demand (AVOD) models is playing a huge role in this consolidation. Unlike global markets where subscription-based models dominate, Indian audiences are more price-sensitive, leading platforms like Amazon MX Player, ZEE5, and JioHotstar to rely heavily on advertising revenues.

For advertisers, this shift offers both precision targeting and scale. Unlike traditional TV advertising, which focuses on mass reach, OTT enables brands to pinpoint specific demographics based on viewing patterns, interests, and even behavioral data.

However, fragmentation remains a challenge. While TV offers a predictable, large-scale reach, OTT’s audience is spread across multiple platforms.

As Rajni Daswani explains: “OTT offers better targeting and engagement than traditional TV, but challenges remain. TV still provides predictable and large-scale reach, while OTT audiences are fragmented. Advertisers are willing to experiment, but premium ad pricing will depend on improved measurement, transparency, and proven impact on brand outcomes.”

The industry is also moving toward bundled offerings and super-aggregators—where telecom companies, cable operators, and streaming platforms work together to offer seamless content access under one umbrella. Expect more partnerships between platforms and telecom players to reduce subscription fatigue among Indian consumers.

The compliance burden tightening

OTT platforms were once the Wild West of entertainment—largely unregulated, freewheeling, and bursting with unfiltered creativity—mimicking what premium cable networks like HBO have been offering in the US for decades. If not for that, shows like Game of Thrones, Shameless, and Orange is the New Black would have been improducible. In the Indian context, the initial heydays of OTT in India witnessed the likes of Sacred Games and Paatal Lok being produced with bold, raw, and ultra-realitist storytelling. 

That honeymoon phase seems to now be over. With the government recently banning 18 platforms for vulgar content and the recent advisory from the MIB that asked self-regulatory bodies for OTT platforms to take “proactive” actions when streamers violate the Code of Ethics, the writing is on the wall: regulation is tightening, and compliance burdens are increasing.

“Government scrutiny on OTT content is increasing, with the recent ban on 18 platforms highlighting stricter compliances. While self-regulation exists through content ratings and parental controls, future regulations may introduce stricter classifications, pre-screening requirements, and heavier penalties,” says Daswani.

But who bears the brunt of these regulations? The answer isn’t surprising—smaller, regional players. “Smaller and regional platforms may face disproportionate challenges due to limited legal resources, higher compliance costs, and creative constraints. Stricter rules could slow content production and impact competitiveness,” she adds. 

This is not just a matter of regulatory overreach; it’s about ensuring that the spirit of creativity is not extinguished under the weight of bureaucratic red tape.

Nargund takes a more libertarian stance: “IMPO, there is no need for censorship or moral policing. People and parents are smart enough to take their own decisions on what to watch. Stringent laws would only damage content diversity. The market can take care of ‘vulgarity’—platforms won’t show what isn’t supported by the audience.”

Vikram Tanna, CEO of Eros Now, echoes this sentiment but acknowledges the industry’s need for balance. “OTT platforms have long been self-regulated, implementing robust parental controls and content classification systems to provide a safe and responsible viewing experience. While additional compliance measures may emerge, it is crucial to strike a balance that fosters creative freedom while ensuring responsible content consumption.”

These regulatory developments introduce a layer of uncertainty for advertisers. Tighter controls could affect content diversity and viewer engagement, potentially impacting ad revenues and campaign effectiveness. As platforms adapt to these changes, advertisers will need to stay nimble and recalibrate their strategies to account for potential fluctuations in content availability and viewer behaviour.

If overregulation sets in, the risk is clear: Indian OTT content may lose its edge, and creativity could be sacrificed for compliance.

Where does OTT go from here?

As the dust settles, what does the future hold for India’s OTT industry? Here’s a glimpse:

• More focus on live sports & reality content: “Looking at the big picture, Indian OTT will be more inclined towards sports, live events & reality shows. Platforms will fiercely compete for acquiring sports content rights,” notes Nargund.

• Rise of bundled offerings & super-aggregators: Expect more tie-ups between telecom players, broadcasters, and OTT platforms to provide seamless content access under one umbrella.

• AI-powered personalisation: Platforms will lean on AI for content discovery, recommendation algorithms, and data analysis to optimise engagement and retention.

• OTT as a premium advertising medium: While YouTube continues to dominate digital video ad spends, OTT will establish itself as a premium option for targeted advertising.

One of the key advantages of OTT over traditional TV is its ability to deliver hyper-targeted campaigns. “For advertisers, OTT offers better targeting and engagement than traditional TV,” explains Rajni Daswani. Yet, this precision targeting comes at a price: the need for robust measurement tools that can prove a campaign’s impact. With viewership now scattered across a myriad of platforms, advertisers must navigate a labyrinth of data points to justify premium ad spend.

Complicating matters further is the challenge posed by the phase-out of Google cookies and the increasing emphasis on data privacy. As traditional methods of tracking become obsolete, OTT platforms are pivoting toward first-party data strategies. “OTT platforms are pivoting towards first-party data strategies as Google cookies disappear. Expect increased investment in direct partnerships with brands for richer, privacy-compliant data,” says Daswani. This shift is more than just a reaction to regulatory pressures; it represents a fundamental rethinking of how audiences are understood and engaged in a privacy-conscious era.

With programmatic advertising losing some of its sheen, brands are increasingly drawn to direct partnerships that offer deeper, consent-based insights into viewer behavior. The future of OTT advertising hinges on these data-driven relationships. The challenge for advertisers is clear: demonstrate measurable ROI in an ecosystem where every impression counts and data privacy is paramount.

Yet, the rise of YouTube as a dominant force in digital advertising—especially in key Hindi-speaking states—adds another layer of complexity. “OTT platforms come well after YouTube/ social media in terms of ad spending. Hardly  15-20 % except live events. It's YouTube on mobile as the majority reach. OTT platforms emerged in India as an extension of broadcast companies as catch-up TV before global streaming giants entered with originals. OTT will remain as a premium medium for advertisers,” observes Nargund.

Another trend gaining momentum is the emergence of niche and regional language platforms. Languages are one of India’s greatest assets, and platforms that cater to regional tastes and cultural nuances are poised for significant growth. Nargund emphasises, “Languages are our biggest assets, not to be forgotten.” As these platforms tap into local narratives and traditions, they offer advertisers the opportunity to connect with audiences in a more culturally resonant manner—a vital edge in a diverse market like India.

Looking at the future, Nargund remarks, “On the experimental front, there could be Indian content based FAST channels, the distribution system well established globally. The consumption of OTT content will remain fragmented across various mediums. AI will be utilised extensively for fundamental purposes like content discovery,  personalisation, transcoding, data-analysis etc.”  

The Indian OTT space is at an inflection point, poised for growth but navigating an increasingly complex maze of audience expectations, regulatory scrutiny, and monetisation challenges. For advertisers, the message is clear—OTT is no longer a niche play. It’s a powerful storytelling medium that, when used strategically, can drive deeper engagement and brand impact.

As Tanna aptly puts it: “The industry is witnessing a significant shift, with more television audiences migrating to OTT platforms for diverse and on-demand entertainment. In this transformative phase, consolidation and a well-structured self-regulatory system will play a vital role in shaping the future of digital entertainment in India.”