CTV’s big picture: Small screens are getting left behind

With consumers increasingly shifting from traditional linear TV to streaming platforms, connected TV (CTV) is emerging as a dominant force in digital entertainment. This shift is driven by affordable smart TVs, improved broadband penetration, and a growing appetite for on-demand content.

Considering that 80 crore people still watch traditional TV, it will take time for CTV to surpass it. However, the contrast between the exponential growth in CTV and the flat growth in traditional TV is becoming evident.

For brands and advertisers, this presents an unprecedented opportunity to connect with engaged, high-value audiences like never before. The adoption of CTV in India is accelerating at a remarkable pace. As of 2024, India has over five crore CTV households, and this number is expected to grow to six crores by 2025. According to a report by RedSeer, the CTV audience base has grown by 2.5x in the last five years, driven by various factors.

Of late, the smart TVs have become affordable with some models now available for as low as INR 10,000. There has been a rapid expansion of high-speed broadband with fibre connections reaching over four crore homes. However, many households, especially in tier-2 cities, are seen streaming on CTV via phone hotspots.

There are an additional 10-12 crore devices that can potentially be converted to smart TVs in the next two to four years. There also has been a shift in content consumption habits, with viewers preferring on-demand content from OTT platforms over traditional cable television.

An unprecedented growth

The CTV market is witnessing 30-35% year-on-year (YOY) growth, surpassing traditional TV viewership rates. According to a GroupM report, digital video consumption in India has grown by 24% CAGR over the last five years, with CTV playing a crucial role in this expansion.

This growth is fuelled by multiple factors. There has been an increasing adoption of ad-supported streaming models.

Secondly, there has been a shift from mobile viewing to large-screen immersive experiences. There also has been a greater content localisation by major OTT platforms to cater to regional audiences.

While metropolitan cities have been at the forefront of CTV adoption, the real disruption is happening in tier-2 and tier-3 cities. Reports suggest that nearly ~45% of new smart TV sales come from these regions. There are multiple factors at work behind this.

Competition among telecom operators, primarily, two giant organisations, have led to a proliferation of affordable internet plans. The entry of Starlink in India might intensify the competition further.

Increasing disposable incomes have led to a surge in smart TV ownership. E-com reports suggest that ~90% of the new TVs sold in India are smart TVs. With OTT platforms expanding their regional content libraries, streaming services are becoming more relevant to non-metro audiences, further boosting the adoption of CTV in the country.

What’s in it for advertisers

India’s CTV ads market is projected to reach $395 million by 2027, growing at a 47% CAGR according to a Kantar report. Unlike traditional television, CTV advertising is data-driven and highly personalised (or moving in that direction, at least), offering brands better engagement and measurable ROI.

CTV advertising offers multiple benefits to all the stakeholders involved. While programmatic advertising enables brands to target specific audience segments, interactive and shoppable ads enhance engagement and conversion rates.

The choice between the display and video ads options within premium content minimises the ad fatigue for consumers. The choice of placement via OTT, original equipment manufacturers (OEMs), and demand-side platforms (DSPs) open up a lot more avenues of activations.

What’s next?

The next three years will be pivotal in shaping the future of CTV advertising in India. The CTV adoption is expected to cross six crore households by 2025, with growth driven by regional expansion.

Ad spending on CTV will grow at a 47% CAGR, reaching new milestones with programmatic advertising. Hyper-personalised and interactive ads will become the norm, enabling brands to engage consumers in innovative ways.

However, although measurement and targeting capabilities improve, it is too early to say whether more brands will shift budgets from traditional TV to CTV. It will take a little longer but we will have to keep a close watch.

India is at the cusp of a CTV revolution, and brands that embrace this shift early will gain a competitive edge in the evolving media landscape. As marketers, now is the time to invest in a strong CTV strategy—one that leverages programmatic advertising, interactive content, and hyper-personalized campaigns to drive meaningful engagement.

— Nishant Gopalia, senior vice president – media and martech at Tonic Worldwide.