How Indian startups found a monetisation goldmine in interactive entertainment

In 2020, Eloelo—an interactive entertainment startup—entered the Indian market, blending live streaming, social gaming, and creator-hosted events in ways that felt both oddly familiar and strikingly new.

It wasn’t the first to promise community-driven digital entertainment. However, by 2024, it wasn’t just another digital entertainment app. Eloelo rose to become one of India’s top-ranked live social gaming apps. With 85 million downloads and a 200% year-on-year growth, the platform has grown from strength to strength via innovative digital interactions, virtual gifting, and creator monetisation.

Combining this with the knowledge that India’s new media market touched $12.5 billion in FY24—with projections to grow at a CAGR of 16%—interactivity is becoming a cultural phenomenon, with collapsing boundaries between creator and consumer, leisure and livelihood, and entertainment and enterprise.

This change is not occurring in a vacuum. Interactive entertainment finds its roots in the fertile segments of gaming, animation/VFX, video/OTT, audio streaming, and social media. It has created a symbiotic value network, where gaming leads compelling growth with a 41% increase in in-app purchases in FY24, catapulting average revenue per paying user (ARPPU) by 15% to reach $22.

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Propellers of the interactive media market

These changes find roots in the way Indians engage with media. From passive, "lean back" consumption, the Indian consumer now wishes for "lean forward" interactive experiences.

It is evident in the weekly time spent on various platforms—gaming leads with 13 hours, followed by interactive social media at 6.6 hours, dating apps at 6.3 hours, and video/OTT platforms at 6 hours. This transformation is fuelled by India’s young demographic profile, which has widespread access to affordable smartphones and low-cost data plans.

In India, 60% of smartphone users are playing games—that’s 591 million people. Smartphones priced between $200 and $400 constitute 43% of the smartphone market, and 38% of users opt for smartphones priced under $200. This democratisation of technological access lends a gateway to immersive, interactive experiences. Data consumption patterns further propel this affinity. 

About 60% of users consume between 1-2 GB daily, demonstrating an appetite for bandwidth-heavy applications like interactive gaming, virtual reality (VR) experiences, and live streaming.

With 21% using 2-3 GB and 10% consuming over 3 GB a day, users are leaning towards hyper-connected, experiential digital landscapes. Developers are compelled to create seamless, dynamic platforms that respond to evolving user expectations, transforming technology from a mere tool into an adaptive, intimate environment of digital interaction.

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Gaming as a pillar of new media

Gaming powered the interactive media market with $3.8 billion in FY24, and with a CAGR of 20%, the sector is redefining how entertainment is consumed and monetised. Key revenue streams include in-app purchases, virtual gifting, subscriptions, and digital ads. As games transform into social spaces and esports gain mainstream traction, gaming represents the epitome of interactive engagement.

It also emerges as a strategic bellwether for broader digital consumption trends, where the 18 to 24-year-old cohort accounts for 43% of in-app purchases among the 25% of Indian gamers who pay.

Buoyed by disposable incomes and a taste for digital indulgence, the demographic leads the charge in the monetisation puzzle, with top motivations being cosmetic upgrades, performance boosters, and subscription passes. 

The interactive awakening

Interactive entertainment’s cultural resonance is palpable. The strongest pillars of new media—gaming, video/OTT, and social media—brought in at least $3 billion in revenue each in FY24. These avenues generate digital communities that constantly feed into one another, evident in gaming influencers now collaborating with OTT productions, esports gaining their own Olympics, and social media platforms becoming key drivers of fan engagement and viewership.

Similarly, the Indian audio entertainment sector has witnessed significant innovation and demand, with startups like Shark Tank India-backed Vobble, which taps into the growing $100 million Indian audio entertainment market. It offers a screen-free, immersive audio platform for children aged 4 to 12 by combining interactive storytelling with educational content.

As user-generated content, gaming, and other digital mediums continue to intersect, we’re likely to see even more sectors embrace the monetisation potential of interactivity.

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Engage, play, repeat

This surge in innovative content forms is part of a broader digital transformation. The past decade of digital innovation focused heavily on content delivery. Transaction-based websites, streaming services, personalised recommendations, and app stores revolutionised accessibility. However, the next wave of innovation centres on transforming the nature of content itself.

Today’s “swipe before type” generation demands dynamic, ephemeral, and participatory experiences. From Instagram and Facebook’s short-form videos to Twitch-powered live social gaming—interactive media caters to an audience that values immediacy and novelty.

Digital experiences today are not just consumed, they are co-created and personalised. Users become creators, blurring the lines between production and consumption. The interactive entertainment goldmine is still in its early stages, but the opportunities are boundless for investors, developers, and creators. As the boundaries between content and community continue to evolve, the future of entertainment promises to be more interactive, engaging, and rewarding than ever before.

Salone Sehgal is the Founding General Partner of Lumikai.