Amazon.com Inc & Netflix Inc are making big investments in India as they try to lure consumers to their streaming services. But their efforts aren’t paying off yet: The two still trail local streaming services.
The article is taken from ( Investopia.com )
Citing data from market research firm Jana, CNBC reported that Hotstar, the Star India owned service, controls around 70% of the on-demand streaming services market share in the country, counting 150 million monthly active users. Netflix has less than 1 million subscribers in India, noted CNBC, in a country of about 1.3 billion people.
While the country had been hampered by spotty internet and low incomes, India, the second-largest internet market in the world, is still seen as a big opportunity for technology companies. According to Reuters, the media and entertainment market in India is set to hit $31 billion in two years, up from $22.7 billion last year. (See also: Baird Gets Even More Bullish on Netflix.)
An Already Crowded Marketplace
But while there are riches to be had, it’s not as easy for Amazon and Netflix as some had expected. According to CNBC, there are currently 35 streaming services in India that either launched or expanded their offerings during the past three and a half years. More are expected to enter the local market. A lot of those services are owned by television networks or production houses in India with CNBC pointing to ALTBalaji, a streaming service that has more than 2.5 million paying customers and is owned by Balaji Telefilms, which has a reputation for producing some of the most popular content in India. (See also: Bank of America Sees More Upside for Netflix.)
Local Services Are Pricing Aggressively
Another reason the local services are keeping Amazon and Netflix at bay is the low cost they charge for consumers to access their content. According to CNBC, a lot of the streaming services in India price their offering aggressively, making money in large part off of advertising. Hotstar boasts that close to 80% of its catalog is free to customers, noted the report. For its premium tier, Hotstar charges around $3 a month which is cheaper than the $7.30 a month Netflix’s India service charges. Amazon has been using Prime membership in India to lure customers its way. Prime, which includes Prime Video and Prime Music, costs $1.90 a month of $14.50 a year in India, noted CNBC.
Two weeks ago Netflix rolled out its first original series in India, which is the first of new shows geared toward Bollywood. Called “Scared Games,” Reuters reported it’s a thriller set in Mumbai and includes some of Bollywood’s most famous actors and actresses. With more than 125 million international customers, Netflix is setting its sights on India as the next bastion of growth.