Streaming services fight for value-conscious Indian consumers

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In a cavernous events hall at a hotel near Mumbai airport, a mix of journalists and glamorous but not yet famous attendees gulped down tiny bottles of water. We took shelter from the heat wave raging outside as Amazon Prime Video executives paraded on stage with Bollywood stars.

The American and Indian bosses celebrated the fifth anniversary of the platform in India and announced that Amazon Prime Video had invested in 41 new titles to be launched over the next two years. As for the unspecified amount Amazon has invested in Indian content over the past five years, the company is reportedly doubling that commitment.

No one at this giant corporate party seemed particularly worried about the impending meltdown of streaming – an eerie contrast to Netflix’s shaky investors who wiped billions off the company’s value this year.

“India is really showing us the way,” said Kelly Day, who leads Amazon Prime Video’s international business, from a big white armchair during a scripted fireside chat. “It’s one of our fastest growing markets.” A day later, Amazon said Amazon considers India “one of our most important markets.”

It may be true. Streaming platforms have long said they expect growth to come from conquering new geographies. But that means breaking into India, home to the world’s second-largest population of 1.4 billion, 22 constitutionally recognized languages ​​and its own thriving entertainment industries beyond Bollywood in Mumbai. This is no small challenge for companies based in Seattle or Los Angeles.

Movie-loving, value-conscious Indian customers have already humiliated streaming godfather Netflix, which was initially priced too high and had to scrap plans for India that included building a post-production facility in exclusive property. He had to go back on his ambitions to recruit 100 million subscribers – according to Media Partners Asia, they ended last year with less than 6 million.

Disney Plus Hotstar is India’s most popular streamer, with half the market share, according to Omdia. But that crown rests largely on costly rights to Indian Premier League cricket matches, which he will have to spend billions on if he wants to win again this year.

But Amazon Prime, slightly ahead of Netflix with 9% market share, believes it has understood India. Realizing it could sell subscriptions in every zip code this way, Amazon programmed in 10 of India’s languages. During the pandemic, it has raised eyebrows by bypassing India’s still cinemas and uploading new releases for subscribers. It rolled out mobile-only subscriptions for the first time in the world. Day called Amazon Prime’s Indian business a “hub of innovation.”

Putting this to the test, Amazon raised subscription prices late last year. Mihir Shah, head of India at Media Partners Asia, said the move was Amazon’s “proof of confidence that what they produce, people will pay 50% more.” An annual subscription is now Rs 1,499 (around $20).

India now has one of the highest proportions of Prime members who stream on Prime Video each month, said director of subscription video on demand Sushant Sreeram – he was just about audible on the cooling system of the room. Amazon Prime is secretive about subscriber and viewer numbers; Sreeram seemed to confirm that India is one of his top performers, at least in terms of eyeballs.

Media analysts say India is proving to be a unique market for Jeff Bezos’ e-commerce giant. Unlike other countries, where Amazon Prime subscribers mainly sign up to get faster deliveries, Indian Amazon Prime subscribers mainly pay to watch movies and TV.

“In developed markets, the Prime service is sold primarily on the back of Prime Delivery,” Shah said. “In India it’s the other way around, more people subscribe for the video than for the delivery benefits.”

The big difference between Amazon and Netflix or Disney Plus Hotstar is that Amazon has a lot of other stuff to sell you besides light comedies and cricket. If the company can convert watchers into customers in one of the fastest growing e-commerce markets in the world, it will have hit the jackpot.

“Amazon clearly sees video as a way to monetize India’s e-commerce opportunity,” Shah added.

Not only did Amazon Prime announce dozens of new original movies, series and co-productions at last week’s event, at deafening volume and with celebrity dancers and actors to hammer it home, it also launched its online movie rental in india.

And now, as Netflix knows all too well, Amazon needs to entertain its viewers. I gave up the Prime party after three hours with ringing ears – but it was just getting started.

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