Streaming services battle for India’s value-conscious consumers

In a cavernous events hall at a hotel near Mumbai airport, a mix of reporters and glamorous but not-quite-yet-famous attendees slurped from tiny water bottles. We sheltered from the heatwave raging outside while Amazon Prime Video executives paraded onstage with Bollywood stars.

The American and Indian bosses were celebrating the platform’s fifth anniversary in India and announcing that Amazon Prime Video had binge-invested in 41 new titles to be launched in the next two years. As for the unspecified amount of money Amazon has invested in Indian content over the past five years — the company would be doubling that commitment.

No one at this giant corporate party seemed to be especially worried about the imminent collapse of streaming — a strange contrast with the shaking Netflix investors who have wiped billions off the company’s value this year.

“India is really leading the way for us,” said Kelly Day, who heads Amazon Prime Video’s international business, from a large white armchair during a scripted fireside chat. “It is one of our fastest-growing markets.” Day later said Amazon considers India “one our most significant markets”.

This may well be true. Streaming platforms have long said they expect growth to come from conquering new geographies. But doing that means breaking into India, home to the world’s second-largest population with 1.4bn people, 22 constitutionally recognised languages, and its own thriving entertainment industries beyond Mumbai’s Bollywood. This is no small challenge for Seattle or LA-based companies.

India’s movie-loving, value-conscious customers have already humbled streaming godfather Netflix, which initially priced too high and had to shelve plans for India that included building a wholly owned post-production facility. It had to ratchet back ambitions to sign up 100mn subscribers — according to Media Partners Asia, they ended last year with fewer than 6mn.

Disney Plus Hotstar is India’s most popular streamer, commanding half the market share, according to Omdia. But that crown largely rests on expensive rights to the Indian Premier League cricket matches, which it will have to splash billions on if it wants to come out on top again this year.

But Amazon Prime, slightly ahead of Netflix with 9 per cent market share, reckons it has India figured out. Realising that it could sell subscriptions in every postcode this way, Amazon programmed in 10 of India’s languages. During the pandemic, it raised eyebrows by bypassing India’s stilled movie theatres and bringing new releases online for subscribers. It rolled out mobile-only subscriptions for the first time in the world. Day called Amazon Prime’s India business “an innovation hub”.

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 “show of confidence that what they are producing, people will pay 50 per cent higher”. An annual subscription is now Rs1,499 (about $20).

India now has among the highest proportion of Prime members who stream on Prime Video each month, said director of subscription video on demand Sushant Sreeram — he was just about audible over the venue’s cooling system. Amazon Prime is secretive about subscriber and viewer numbers; Sreeram seemed to confirm India is one of its better performing places, at least in terms of eyeballs.

Media analysts say India is proving to be a unique market for Jeff Bezos’s ecommerce giant. Unlike other countries, where Amazon Prime subscribers mostly sign up to get faster deliveries, India’s Amazon Prime subscribers are primarily paying to watch movies and TV.

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

The big difference between Amazon and Netflix or Disney Plus Hotstar is that Amazon has many other things to sell you besides light comedies and cricket. If the company can convert watchers into customers in one of the world’s fastest growing ecommerce markets, then it will have hit the jackpot.

“Amazon clearly sees video as a way to monetise India’s ecommerce opportunity,” Shah added.

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

And now, as Netflix knows all too well, Amazon must keep its viewers entertained. I gave up on the Prime party after three hours, ears ringing — but it was only just getting started.

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