Tier 2+ drives majority of India’s 500M social media audience: Redseer

India’s ~700 million smartphone users are powering a shift in entertainment and online consumption. Affordable devices and low data tariffs are accelerating the expansion of a USD 440 million interactive media market in FY2025, growing at ~45% CAGR through FY2030.

India’s GDP growth has outpaced emerging and advanced economies, supported by higher private consumption and a 5 percentage point rise in discretionary spending over the last decade. A predominantly young population (under 30) with one of the world’s highest daily screen times (5 hours) has created fertile ground for online leisure and entertainment.

Bharat is the growth engine

Over 70% of India’s ~500 million social media users — and a similar share of digital transactors — come from Tier 2+ locations. The post-2016 launch of Jio and UPI was a turning point:

Jio slashed data costs, bringing hundreds of millions online

UPI simplified digital payments, enabling widespread digital commerce

This combination created the core infrastructure for today’s interactive media boom.

Beyond mainstream OTT: India’s emerging formats

Digital entertainment has evolved from traditional categories like music and video streaming (Netflix, Hotstar, JioSaavn), audiobooks and podcasts (Audible, Storytel), short videos (Instagram Reels), and online dating apps (Tinder, Bumble, Hinge), to more localized formats, including:

Micro dramas: Quick TV, Kuku FM (video-first fiction)

Audio storytelling: Pocket FM, Kuku FM

Vernacular short-form video: Moj, Josh

Social discovery: FRND, Flutrr

Astro/devotional tech: AstroTalk, AstroSage

AI companion apps: Rumik AI, Replika AI

These platforms cater to distinct “Bharat-first” consumption needs: bite-sized, mobile-first, regional, and participatory content.

Five formats leading the next wave

1) Micro Dramas

Micro dramas are gaining strong traction in India, mirroring China’s success.

Market: USD 125 million by FY2026

Projected: Over USD 1 billion by FY2030

Current revenue: 80% subscription-led

Growth driver: Tier 2+ user expansion ahead

Opportunity: Indian IP with vernacular storytelling can unlock scale beyond metro-heavy viewership today.

2) Audio Streaming

Audio fits into screen-free moments: commuting, chores, and relaxation.

Projected market: USD 300 million by 2030

14 million monthly average users

Average daily listening: 95 minutes (vs. ~30 mins for music streaming)

Opportunity: Strong user “stickiness” signals sustainable product-market fit and global expansion potential.

3) AI Companions

AI-driven emotional and functional support apps are on the rise.

Global funding: USD 500 million (cumulative till Sep 2025)

India focus: Hinglish + regional language models

Use cases: Emotional support, tutoring, wellness, astrology, parenting

Opportunity: Infrastructure is ready; culturally attuned models can replace legacy chatbots across industries.

4) Astro & Devotional Tech

Urban-first, high-engagement category among Gen Z, millennials, and NRIs.

Part of the USD 42 billion broader religious/astro market

Opportunity: Platforms can scale through teleconsults, virtual tipping, livestream worship, and D2C sales of artefacts.

5) SFV & Social Discovery

TikTok’s ban and a search for digital “connection” fueled homegrown platforms.

FRND: 50 million downloads

Paid users: 4% in SFV, 12% in social discovery

Opportunity: Strong network effects with room to grow monetization through tipping, ad models, and 1:1 calling.

Monetisation: the glue across categories

Interactive media platforms are designed for Tier 2/3 micro-payments:

UPI-enabled

Nano-transactions of ₹1–10

UPI AutoPay driving frictionless recurring spending

While 25% of Tier 2 users currently pay for a media service (vs. 40% in Tier 1), awareness and UX gaps still need solving.

Building user trust through seamless onboarding and education will be key to unlocking the next wave of paid digital content adoption.