• The report by Esya Centre assesses market forces and user behaviours across three digital entertainment avenues: Social Media, OTT and Online Gaming.
• Outlines that the policymakers’ concerns around online gaming are unsupported by user time-spend and money-spend data.
• An academic version of this report is published in an IIM-A working paper.

Thursday, 17 August 2023: Esya Centre, a leading tech & policy think tank, released a report titled “New-Age Digital Consumption: A Survey of Social Media, OTT Content and Online Gaming” that examines the consumption and engagement patterns of users across three digital entertainment avenues: Social Media, OTT and Online Gaming including real money gaming, e-sports and casual gaming. An academic version of this report is published in an IIM-A working paper co-authored by Dr. Rajat Sharma, Associate Professor, IIM-Ahmedabad and Dr. Vikash Gautam, Adjunct Fellow, Esya Centre. The paper outlines that policy concerns around unwanted user actions, especially in online gaming, are not supported by user time-spend or money-spend data.

The report delves into data gathered through a comprehensive survey conducted across ten major cities: Delhi NCR, Bengaluru, Chennai, Mumbai, Kolkata, Patna, Mysuru, Lucknow, Jaipur, and Bhopal. This survey involved 2,000 respondents and was further supported by in-app data from over 20.6 lakh users, spanning across 143 mobile applications.

Below are the key findings of the report:

• Behavioural lock-in: Daily engagement in terms of time spent is the highest for social media at 194 minutes a day. This number for OTT and Online Gaming stands at 44 minutes and 46 minutes, respectively.
• Time and use pattern: A median user spends less than INR 100 a month and less than an hour a day on online gaming. The corresponding number is INR 200-400 for OTT.
• Price Sensitivity:  Users say that a 30% increase in participation fee for online games may lead to a 71% dip in engagement, indicating a high price sensitivity. This number would only be 17% for OTT.
• User Motivation: While OTT is considered a significant stress buster, 28% of Digital Nagriks consider online gaming important for their employment prospects.
• User Stickiness: While all users are active on Social Media once a month, the corresponding number for OTT and Online Gaming is 60% and 40% respectively. 89% users are active every day on Social Media while only 22% and 12% are active on OTT and Online Gaming respectively.

Commenting on the key insights from the report, Amjad Ali Khan, Director at the Esya Centre said “There is a lack of research examining both policy and user adoption trends in key digital markets. We believe that the findings of the report are very relevant, especially at a time when the Government is in the process of formulating user-centric policies for the digital industries. We hope that the insights from the report will help inform a forward-looking policy stance that focuses on user protection over paternalistic interventions and blanket bans.”

Further, calling India’s regulatory landscape more progressive than its peers, Mr. Rajat Sharma, Associate Professor, Indian Institute of Management Ahmedabad (IIM-A) said that “India is moving from a command-and-control model of regulatory oversight to a light touch model for new industries. While technology is dynamic, consumption patterns are more predictable. Therefore, building a profile of a Digital Nagrik and their consumption patterns can form the crux to an agile policy ecosystem for the three sectors. An attempt our report aims to make.”

The report comes after the GST Council’s meeting that changed the GST levied on the online gaming industry from 18% on Gross Gaming revenue (GGR) to 28% on deposits, leading to a 350%-400% jump in the industry’s GST outgo. User addiction and loss of money were cited as some key reasons behind this steep hike. Interestingly, MeitY earlier this year published rules to regulate the industry. The rules were hailed as balanced, and laser focused on user safety. The ministry is soon expected to notify Self-Regulatory Bodies for the regulatory oversight of the industry.

According to the report, user safety, grievance redressal and cumbersome KYC requirements are the three key points of concern for users across Social Media and Online Gaming. Users of OTT however describe their experience as smooth on almost all accounts – which is a testimony to the standardization of quality of service in an otherwise heterogeneous digital entertainment industry.

About Esya Centre:

The Esya Centre is a New Delhi based technology and innovation policy think tank. It generates empirical research to catalyse new policy constructs for the future. It simultaneously aims to build institutional capacities and new communities to address emerging technology related challenges and opportunities.