Budget for FY26: OTT Platforms May Get Costlier

As the countdown to the Budget for FY26 begins, all eyes are on digital entertainment, particularly OTT (Over-The-Top) platforms. Early indications suggest that streaming services, including Netflix, Amazon Prime Video, Disney+, and local favorites, may become more expensive for subscribers in the upcoming fiscal year.

New Tax Policies Likely to Impact Streaming Costs

Government insiders hint that the Finance Ministry is considering revising the tax structure for digital services. This could include either a hike in the Goods and Services Tax (GST) on OTT subscriptions or the introduction of a digital service tax on international platforms operating in India.

Currently, most OTT subscriptions attract an 18% GST, which is billed directly to the consumer. A marginal increase—even by 2-4%—can directly translate into higher monthly or yearly costs for binge-watchers.

Why OTT Platforms Are Under the Radar

The booming growth of the digital streaming industry in India, which has surpassed traditional TV viewership in urban areas, has prompted the government to explore new avenues of tax revenue generation. With over 500 million internet users and rising demand for original content, the sector has become a significant player in the media and entertainment ecosystem.

Furthermore, the increase in subscription-based revenue models over ad-supported ones means more direct transactions, making taxation more straightforward and lucrative for the government.

How This Could Affect Users and Platforms

If implemented, the cost hike in OTT platforms could impact both users and the platforms themselves. Here's how:

• Subscribers may face price increases ranging from ₹10 to ₹50 per month, depending on the platform.
• Platforms may need to revise their pricing strategies or offer more bundled deals to retain users.
• Smaller regional OTT players might struggle to stay competitive if the tax structure tightens.

Industry Reaction and Expert Opinion

Industry experts believe that while a modest tax increase might not drastically reduce subscriptions, it could slow down growth in price-sensitive rural markets. Many suggest that a balanced approach is necessary, encouraging industry growth while also enabling fair tax contributions.

OTT platforms have also lobbied for incentives and policy support, especially for content production and localization, which could soften the blow if taxes are increased.

As the Union Budget 2025-26 is unveiled, digital consumers should brace for potential price hikes in their favorite streaming services. While nothing is confirmed yet, the signals are clear: entertainment may soon cost more in the digital age.

Whether you’re a casual viewer or a full-fledged binge-watcher, it’s wise to stay informed and consider long-term subscription plans before prices possibly go up.