India’s streaming race is on
Amazon is the latest entrant fighting for a lucrative piece of huge content market
It is the dead of night as a convoy of black jeeps rumbles through a roughshod Indian city, throwing up clouds of dust as they swerve into an abandoned factory. Leaping out and pulling open the doors of a truck, a bearded man flicks his switchblade and slashes open a bag of drugs, tasting it on the tip of his tongue.
“Maqbool. Lala has kept his word. The dark chocolate is good quality and will give an effective high.”
This isn’t real life, but the latest Hindi-language offering from Amazon Prime Video and part of Jeff Bezos’s latest ambition: a plan to conquer Bollywood.
Mirzapur, a big-budget nine-part series billed as India’s answer to the hit Netflix show Narcos, is Amazon’s new gambit aimed at winning over millions of movie-mad Indian viewers, who are enthusiastically embracing video streaming.
As Amazon, Netflix and others square up for a battle for domination of the rapidly growing global streaming market, they’re pumping big money into original regional content like this as they hunt for growth in emerging markets.
And India, home to the world’s most prolific film industry, and where the market for online video streaming is growing by nearly 50 per cent per year and is on track to hit $2 billion by 2023 up from $558 million this year (all figures in U.S. dollars), is perhaps the richest prize of all. With a population of 1.3 billion set to soon outstrip China’s and a growing middle class, it represents an eye-watering opportunity.
But it’s the scope for future growth as smartphone penetration continues to soar from 400 million users today to a projected 700 million by 2022 that’s exciting investors.
Over 100 million Indians already subscribe to a video streaming service, with figures rising.
“India is an incredibly important investment for Amazon,” says Tim Leslie, global vice-president of Amazon Prime Video and responsible for building the company’s streaming business outside Europe and the U.S. “We are making a big investment based on the opportunity to redefine things.”
It’s unlikely to be smooth sailing, however. First there is the need to cater to viewers in dozens of different languages — Bengali, Tamil, Telugu, Marathi and others — while dealing with powerful vested interests in Bollywood and other vibrant regional film industries in Chennai, Bangalore and Kolkata. The U.S. giants are also up against tough competition in the form of Hotstar, a streaming service bankrolled by Rupert Murdoch’s 21st Century Fox and Viacom18’s Voot. Hotstar, which launched in February 2015 — a head start of almost two years on Amazon Prime Video — has amassed an estimated 75 million monthly users, mainly through its screening of IPL cricket, which attracts a frenzied following in the subcontinent.
Voot, a free service backed by advertising, has about 22 million.
That compares to just 11 million for Amazon and five million for Netflix — although both are growing fast as they invest in original content, TV shows and sign deals with existing Bollywood studios for libraries of existing movies, according to Counterpoint Research.
Critics describe Mirzapur, an epic crime drama series set in India’s heartland, as a direct response to Netflix’s hit show Sacred Games — a sinister cop thriller set in the seething megacity of Mumbai, which has riveted Indian audiences.
Looming large over all of this is the towering figure of Mukesh Ambani, Asia’s richest man, with a $44-billion fortune.
To a large extent, it is the colossal investments he has made in upgrades to India’s 4G telecom networks via Reliance Jio Infocomm, his mobile and broadband business, that has paved the way for the explosion in India’s video streaming market.
His investment of $30 billion has prompted Indians to embrace cheap smartphones, and free voice and cut price data plans in vast numbers.
But Ambani, whose company now has more than 250 million subscribers, may not be content to sit by and watch others reap the rewards of the video streaming market indefinitely.
That’s why Amazon, Netflix and others are racing to build large-scale streaming businesses quickly, before new entrants disrupt the market.
Amazon has 30 original shows and now offers streaming services in 1,000 cities and is offering cut-price subscription rates of around $1 per month to boost subscriber numbers.
That is a very different approach to Netflix, which is charging about $7 per month. But if Amazon really wants to hit the big time in India, it may have no choice but to follow Hotstar into sports streaming. Star India, which operates Hotstar streaming service, made a multi-billion dollar investment last September for the TV and digital rights of the IPL for the next five years.
Whether Mr Bezos will consider an investment on that scale to turbocharge its streaming business in India is unclear.
Either way, it’s likely to be a dizzying ride ahead.