Ama­zon Spends Top Dol­lar to Win Prime Spot in Dig­i­tal Con­tent Race

Out­spends rivals Hot­star, Eros Now, SonyLiv, Voot & Balaji Tele­film’s ALT

The Economic Times - - Front Page - Shash­wati.Shankar @times­

Ben­galuru: Ama­zon’s video stream­ing ser­vice has so far com­mit­ted at least ₹ 500 crore to cre­at­ing orig­i­nal con­tent in In­dia, out­spend­ing its top do­mes­tic rivals as it signs up some of the coun­try’s most high-pro­file pro­duc­tion houses. Ama­zon Prime Video has in­vested about one-fourth of its Rs 2,000-crore In­dia bud­get in lo­cal pro­duc­tion houses, in­clud­ing those of film­mak­ers Farhan Akhtar and Anurag Kashyap, ac­cord­ing to ex­ec­u­tives at pro­duc­tion firms Ama­zon has been in talks with.

out of 2,000-crore bud­get for In­dia (out of 120-crore an­nual bud­get)

That is more than the an­nual bud­gets of mar­ket leader Hot­star, Eros Now, SonyLiv, Voot and Balaji Tele­film’s ALT, ac­cord­ing to these ex­ec­u­tives and an­a­lysts track­ing In­dia’s nascent so-called over-the-top video stream­ing in­dus­try. While ALT’s bud­get for 2017 is about Rs 120 crore, the other providers have al­lo­ca­tions un­der Rs 400 crore each, ac­cord­ing to an­a­lysts. Ama­zon’s ag­gres­sive spend­ing on orig­i­nal con­tent is ex­pected to give it a firm edge in In­dia over the world’s largest on­line TV net­work, Net­flix, which is fo­cussed on stream­ing global con­tent and Hindi and re­gional movies here. Ama­zon Prime Video be­gan stream­ing in In­dia in De­cem­ber, nearly a year af­ter Net­flix launched its lo­cal ser­vice.

Who’s Spend­ing How Much...

“Ama­zon Prime is def­i­nitely giv­ing the best mone­tary ben­e­fits to many of us creatives. Net­flix is also pay­ing but there are fewer deals hap­pen­ing where they are con­cerned,” said a film direc­tor work­ing with mul­ti­ple pro­duc­tion houses, on con­di­tion of anonymity. Ama­zon Prime Video is es­ti­mated to have paid .₹ 40 crore to Akhtar and his busi­ness part­ner Ritesh Sid­hwani’s pro­duc­tion house Ex­cel Me­dia and En­ter­tain­ment, and sim­i­lar or smaller sums to other dig­i­tal con­tent play­ers in­clud­ing Kashyap’s pro­duc­tion house Phan­tom Films, ac­cord­ing to the in­dus­try ex­ec­u­tives ET spoke with.

Over­all, the com­pany has signed up at least 15 pro­duc­tion houses and dig­i­tal con­tent cre­ators in­clu- ding All In­dia Bak­chod, Only Much Louder and Big Syn­ergy, these peo­ple said.

“We are look­ing at di­verse gen­res. In the long term, our orig­i­nal con­tent will build our brand in In­dia,” said Nitesh Kri­palani, coun­try head of Ama­zon Video In­dia. “Our aim is to launch our first In­dia orig­i­nal show by the end of March or early April.”

Kri­palani did not re­ply to emailed ques­tions on Ama­zon Prime Video’s in­vest­ments in In­dia.

Eros Now and Star In­dia’s Hot­star de­clined to par­tic­i­pate in this re­port, and SonyLiv could not be reached for com­ment.

ALT, which is set to be­gin its stream­ing ser­vice this month, is fo­cussed on cre­at­ing re­gional lan­guage con­tent and has eight shows ready. “We have com­mit­ted Rs 50 crore out of this year’s bud­get to­ward cre­at­ing orig­i­nal con­tent and are look­ing to launch 30-35 shows,” said chief ex­ec­u­tive Nachiket Pant­vaidya. “Be­sides Hindi and English, we have also shot a show in Tamil and one in Pun­jabi is be­ing shot right now. We have two con­cepts in Ben­gali.’’ Vi­a­com18’s Voot, which be­gan stream­ing orig­i­nal pro­duc­tions last year, said it gets 5-7 mil­lion views for each show. Of its more than 18 mil­lion monthly ac­tive users, at least 2 mil­lion log in daily for 50 min­utes of show time, the com­pany said. De­spite Ama­zon Prime Video’s ag­gres­sive spend­ing, an­a­lysts ex­pect do­mes­tic ser­vices to con­tinue to in­vest on cre­at­ing orig­i­nal con­tent for the next few years un­til a few be­gin to dom­i­nate the mar­ket.

Do­mes­tic video stream­ing ser­vices “will have the ap­petite to sus­tain losses for two to three years, af­ter which the bosses will start ask­ing bud­get ques­tions and then you will see a shake­out”, said Je­hil Thakkar, me­dia and en­ter­tain­ment head at KPMG.

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