[Tencent Technology Editor's Note] With Netflix and Amazon accelerating the search for new users overseas, both companies have begun to view India as a huge market.
Although the Internet infrastructure is lagging behind and average household income is relatively low, the world's second-largest Internet market has shown great potential in recent years. It turns out that conquering the Indian market is still a tricky issue for the two streaming video service giants.
Netflix just released its first original Hindi TV series this week, directed by a well-known Indian director, about women and other places in India who break through taboos and pursue sexual behavior. The TV series is divided into four parts, the name is "Sacred Game", which is based on the novel of Indian writer Vikram Chandra.
Soon after, Amazon's "Comicstaan" was also launched in India. This is a series of cartoons composed of famous Indian cartoon characters. It is the fourth original TV series produced by Amazon for India. In addition, there are 7 other in preparation. . These are from Vijay Subramaniam, Amazon's Prime Video website and content director.
Posters for the new episodes have begun to be posted at bus stops, shopping malls and subway stations in several cities across India. Both companies entered the Indian market in 2016, and the entire Indian streaming video environment is starting to become more and more interesting: Amazon Prime Video and Netflix have long lagged far behind Indian-based streaming service providers. It has only gradually narrowed down in recent months.
The current leader in the Indian market is Hotstar. According to estimates by Jana Research, Hotstar, controlled by Fox in the 21st century, has controlled 70% of the Indian local streaming market by the beginning of this year. In an interview with CNBC, Ajit Mohan, CEO of the company, said that in the last three and a half years, Hotstar had 150 million monthly active users. In contrast, according to industry estimates, Netflix has fewer than 1 million users in India.
The streaming video that was once seen by Indians as “luxury” has now begun to be tried by more and more Indians. Many companies have noticed that in the past three and a half years, more than 35 streaming service companies have appeared or expanded their business in India, and more companies plan to enter Bollywood.
Many of these services are provided by local TV networks and production companies. Nachikeet Pantvaidya, chief operating officer of Balaji Telefilms, said in an interview with CNBC that the company is known for producing home TV programs that are of interest to Indian users. It launched the ALTBalaji streaming service last year and has accumulated more than 2.5 million paying users.
According to data from Media Partners Asia Research, the online video market in India is currently worth more than $700 million and is expected to grow to $2.4 billion by 2023.
India's Internet infrastructure improvements
The rise of the streaming media boom is largely due to the decline in Indian mobile data prices. India's richest man Mukesh Ambani's telecom operator Reliance Jio launched a telecom price war in the second half of 2016, began to provide users with a large number of data services, and for a long time to provide free of charge.
During this period, millions of new users entered the Internet and changed the way many people consume data. The Indians who have always been frugal have used the use of network traffic to “satisfy”, but now the online life of Indian users is very different from the past.
Another reason that hinders the development of Internet video services is pricing. According to Jehil Thakkar, an analyst at Deloitte Consulting Group, unlike Americans, Indians are very unaccustomed to using pay-TV.
In the United States, cable TV subscriptions can even exceed $100/month, making products from Netflix, Amazon, and other companies increasingly attractive. But in India, this number has never exceeded $4 in the past 20 years.
Developed in accordance with Indian rules
Frank Dsouza, an analyst with PricewaterhouseCoopers Consulting Group, said that in order to attract customers, many service providers in India have set very low subscription prices, and the main source of revenue is advertising revenue. Unlike Netflix and Amazon, 80% of Hotstar's program listings are free to watch.
In a paid premium service, the monthly subscription fee is approximately 199 rupees (approximately $3). In contrast, Netflix offers 500 rupees (about $7.3) for the cheapest monthly package in India. On the other hand, Amazon Prime Video is more affordable in the Indian market. For example, the service costs US$119 per year in the US, but only 129 rupees (about US$1.9) a month in India, and the annual subscription price is 999 rupees (about US$14.5). Users can experience Prime Video, Prime Music and shopping. Mail and other services.
Hotstar's Mohan said that many companies are not aware of the importance of the price of the data, which is very important to the Indian people. “Unlike our competitors, we don’t like to target only niche users. We do not intend to attract only a small number of streaming service users such as Mumbai, New Delhi or Bangalore. ”
In an event held in New Delhi earlier this year, Netflix CEO Reed Hastings expressed his determination to release more than 2,000 episodes in India within a year and sell them more than Hollywood. More tickets. India has become Netflix's main market for the next 100 million users.
“In the next 20 years, Netflix will invest heavily in paid services, and India’s entertainment industry will grow even more. & rdquo; Hastings said. “Our strategy is to create local content, and of course international content, to really improve the industry. ” However, Hastings denied the possibility of lowering the subscription fee. In fact, in many ways, Netflix operates in India much like Apple, so its influence in India is small.
What Indian users want to see
Analysts say that sporting events and local content are playing a vital role in attracting new users and retaining new users, and in these two areas, the two streaming video giants are struggling.
In India's most popular cricket match, Hotstar has the vast majority of live streaming rights. In April of this year, it recorded a record of 10.3 million simultaneous users watching the final of the IPL Championship. As we all know, cricket is the most popular sport in India.
Last year, Facebook, Amazon, Twitter and Yahoo all expressed their interest in bidding for digital streaming rights in the IPL cricket tournament in India, but they all ended in failure. Facebook even paid $600 million but lost to Hotstar.
SonyLiv, which owns the domestic broadcast rights of the FIFA World Cup in India, has seen similar growth. In an interview with CNBC, Uday Sodhi, executive vice president and head of digital business at Sony Pictures Network India, said that every World Cup game has received a lot of attention. In particular, the match between Mexico and Brazil, according to Fox Sports, averaged 538,000 people per minute, which also set a record.
Both Amazon and Netflix have seen the popularity of cricket in India. Amazon launched a cricket-themed TV show last year, and Netflix is also making the same content.
In addition, the Indian people are also interested in local original content. Said entertainment director Satya Raghavan said. Late last year, YouTube’s monthly active users in India were 225 million, with a significant increase in content in South Indian.
Following Reliance Jio, Hotstar also saw the potential for new users to grow. Sidharth Jain, a former Hotstar creative producer and consultant for several Internet video service providers, said that in addition to offering programs from HBO, Showtime, ABC and Fox TV, the company offers a range of native language programming. These shows are from 55 channels of Star India TV.
According to analysts, international companies want to make a difference in India, should not be limited to their own script mode, but consider more localized content. In this emerging streaming video market, it is often more difficult to compete for new users.
Last week, India's Time Internet acquired a video app called MX Player for $140 million. The app also runs smoothly on older, low-profile Android smartphones. It is reported that the company has already planned to convert 7.5 million monthly users of MX Player into potential users of streaming services.
In addition, India's local production company Shemaroo, China's Alibaba Group and Facebook have also plans to enter the Indian streaming video market. Eros Now, with more than 100 million users worldwide, is also ready to make a wide range of investments in India.