Connected TV (CTV) came into its own in 2025, experiencing an 85% growth in penetration in India, according to an Ormax OTT Audience Report. The medium stands poised for acceleration with more than 129 million users across 45 million households owning connected TV sets. That growth could further accelerate with increasing adoption across smaller towns and rural areas — Ormax’s numbers peg that more than 55% of CTV viewers belong to villages and towns with less than one million population — high-speed data access, decreasing smart TV prices, and an increased focus on regional content, cricket coverage, and bundled OTT subscriptions.
With the surge in CTV reach and viewership, there is a significant uptick expected in ad spending. Given that CTV is able to provide a better targeted and more engaged audience at a lower cost, WPP Media estimates CTV’s share of TV / professional video ad spend to increase to 17% in 2026. While reach was the strength of traditional TV, CTV’s expanded reach, combined with precision targeting and personalised messaging, will provide more bang for the buck for advertisers.
CTV growth is closely linked to OTT growth. The OTT video market size is estimated to reach $7 billion by 2027, with IMARC projecting a market size of over $27 billion by 2033. While OTT content can be viewed on a range of internet-enabled devices, such as mobiles, laptops, and CTV, the Ormax report indicates that CTV is fast becoming the preferred streaming device, second only to smartphones.
A significant contributor to this growth is ad-supported, free-to-view video on demand (AVOD). Revenue models are already expanding to include AVOD and hybrid models, alongside subscription-based (SVOD) models, which have so far dominated CTV. AVOD content with ads is free for viewers, which is a big pull for first-time users transitioning from traditional TV and have lower spending capability / willingness. Not only are major AVOD players like YouTube continuing to gain ground, other SVOD-led players like Amazon Prime are also adopting hybrid models, such as Transactional Video on Demand (TVOD), where users have the option to purchase or rent desired content.
Growth drivers in 2026
While AVOD is one part of the expansion strategy, content is the other critical element. Two key trends in content will drive growth in 2026: the expansion of regional, local language content for an expanded customer base and an increasing focus on microdramas. While the current CTV audience profile differs from the micro drama audience, this could change with increasing CTV penetration.
Regional players, like Sun NXT, HoiChoi, and Manorama Max, will strengthen their position in the vernacular OTT market, even as the leading players, such as JioHotstar, Amazon Prime, and Netflix, expand their own vernacular content.
Additionally, AI is likely to play a key role in curating localised content for diverse audiences. Another key development is the possibility of more tiered and innovative pricing options.
Amazon is already poised to tap into three of these growth levers — AVOD, regional content, and micro dramas. First, the platform is leveraging Amazon MX Player to expand growth in the AVOD segment, which will boost advertising revenues. Second, in terms of regional content, Amazon has expanded programming to 10 Indian languages, with more languages likely to be included in 2026. Third, there is an increased focus on microdramas. While a significant share of microdrama viewership is mobile-first, there will be a spillover effect on CTV as well.
Bumps to avoid
As the CTV wave gains momentum, there are some pitfalls that marketers should take care to avoid. CTV can cater to multiple audience segments with diverse preferences, but it is important to keep some differentiation in offerings. For the SVOD viewer, the introduction of ads is a major turn-off as it compromises the viewing experience. Even if platforms like Amazon frame this as a choice, subscribers may feel betrayed—forced to endure ads or pay more for the same experience.
Concerns about the transparency of CTV effectiveness also need to be addressed proactively. A DoubleVerify’s 2025 Global Insights report found that 63% of CTV advertisers doubt reach numbers, as data on key metrics is controlled by the platforms and often not fully disclosed.
2026 will definitely be the year of CTV, but platforms need to quickly strengthen each of the three growth levers identified above, without compromising the viewing experience of their existing customer base. It will be interesting to see how better transparency/ verification, greater leverage of AI in content curation, and innovation in pricing and revenue models pan out in the next twelve months.
-Ruppal Walia Sharma, professor of marketing, S P Jain Institute of Management and Research (SPJIMR).
