Affordable devices and cheaper data in India may have disrupted the telecom sector and brought financial troubles for the operators, but one of the key gainers of the low-cost data regime in the country has been the video streaming industry. With further potential to grow, global video streaming platforms such as Netflix and Amazon Prime Video are betting on localised content to suit the consumer needs.
“The consumption of video content in India has increased manifold on the back of higher internet speeds, affordable smartphones and cheaper data rates. Non-metros now account for almost 30 per cent of YouTube watch time, backed by regional content, better devices and increasing access,” according to the FICCI-KPMG Indian Media and Entertainment Industry Report 2017. “This trend has opened gates for new age video creators emerging on social platforms who are popular amongst the millenials with large subscriber base,” it added.
Video streaming companies have two broad categories of content on their platforms — the licensed videos and originals — and like the names suggest, the licensed content is leased from other production and distribution houses, while the originals are produced via their in-house studios.
Netflix has, so far, announced three original series from India — Sacred Games, Selection Day, and Again. “India is a vibrant market with a huge appetite for entertainment, and we’ve seen plenty of fan enthusiasm and strong growth here. On the content front we are doubling down on Indian investment to curate a compelling content library encompassing original and licensed titles,” Jessica Lee, VP Communications, Netflix told The Indian Express in an e-mail response when asked about the company’s plans for India.
“In 2017, our global content budget is $6 billion for both original and licensed content. We will reach over 1,000 hours of original content globally this year, which is about 400 original TV series and films, including originals from India. Ultimately, we want to bring a quality curated catalogue that our members in India will love,” Lee added.
Its counterpart Amazon Prime Video, however, has announced a bigger pipeline with 18 original series from India. “We have learnt that consumers everywhere like compelling content and are interested in watching some of the best global shows but prefer strong local content. As such, we have a rich catalogue of Indian selection that includes among the best and latest of Bollywood as well as regional cinema. We have also already announced 18 Indian Originals of which, the first one, Inside Edge launched on July 10th and has seen an overwhelming response,” said Vijay Subramaniam director, Content, Amazon Prime Video India.
The decision of these foreign players to focus on suiting local tastes doesn’t come as a surprise as despite being global giants, they still lag behind other domestic players. According to the FICCI-KPMG report, as per January 2017 data, Amazon Prime Video and Netflix had 9.5 million and 4.2 million active users, while Hotstar TV had 63 million and Voot TV had 13.2 million users.
Both Amazon Prime Video and Netflix did not respond the specific query about their subscriber base in India.
Nevertheless, considering the price-sensitivity of the Indian market, this could also be partly attributed to the subscription rates of these services. Hotstar operates on a freemium model and charges Rs 199 per month for its premium content, while Voot operates on a model that monetises through advertisements. After the free trial period of a month, Amazon Prime Video is approximately Rs 42 per month, along with other Amazon Prime benefits, while Netflix’s basic subscription pack costs Rs 500 per month.
“As of now, the local players may be leading, but we have to see for how long can they sustain. Even if one of these global players invests a billion dollars in content creation, it might take some time. Once they have some comparable content on their platforms, that’s when the competition will start. Right now, it’s very early days, and while they have invested in content, and we could see some new shows and series coming around Diwali and New Year’s and that’s when we will see the competition rising,” said Satish Meena, senior forecast analyst, Forrester Research.
However, the potential growth of the Indian video streaming market has also caught the attention of those not operating in the said segment. A recent Reuters report suggested electronics manufacturer
Apple joining Netflix and Amazon in the race to acquire the film and music library from domestic movie production house Eros. Various Indian telecom companies are also trying to get their share in the video streaming market, but whether they go the Amazon or Netflix way of generating their own content is yet to be seen.
“It is just the start. You will see more companies entering the market, but Indian telecom companies have not shown inclination to start their own production, but they could work on partnerships to find new business models. We might see some participation from telecom companies through partnerships or joint-ventures, but independently, I don’t see them getting involved as of now,” Meena pointed out.
Even as it is still wait and watch for telecom companies getting into content generation at the time, the trend has started developing in the US, with experts pegging the mega-deal of the country’s second-largest wireless provider, and the third-largest home Internet provider AT&T last year announcing the acquisition of Time Warner, which owns various media properties including CNN, Warner Brothers, DC Comics, Cartoon Network, and HBO.