Friday, November 23, 2018

Netflix, Amazon slug it out in India's competitive video streaming market


Netflix and Amazon Prime market share gain at the cost of Indian platforms - Hotstar, VOOT, Jio Cinema.


Just like the smartphone segment, the video streaming space (also known as OTT or over the top) in the country is witnessing a fierce fight between indigenous and global players with the latter gaining a stronger foothold in the domestic market.

According to the latest data, Netflix and Amazon Prime Video, two of the dominant players globally, have steadily grown their market share in the country this year at the expense of local firms such as market leader Hotstar, Jio TV and Jio Cinema.

Los Gatos (California)-headquartered Netflix saw its market share grow to 6.3 per cent till October from a mere 0.5 per cent as in the beginning of the year while Amazon Prime Video’s share grew more than two and half times to 10.8 per cent from 4 per cent, according to KalaGato, a market intelligence firm. The figures are based on installed user base derived from a sample of over one million unique smartphone users. Viewership over mobile comprises 83 per cent of the total video consumption online, according to Comscore.

As Indian users took to cheaper smartphones and faster and cheaper data, backed by a wave of internet proliferation of sorts triggered by Reliance Jio, the demand for video OTT platforms has also shot up. Local audience, like their counterparts in the developed markets, are also opening their purse strings for video subscription services. A telling statistics is that over two dozen OTT services have sprung up only in the last 18 months. 

This includes offerings from leading media houses like Balaji Telefilms (Alt Balaji), Viacom 18 (VOOT) and ZEE Media Corp (ZEE5).

While Netflix and Amazon Prime Video, which launched services in India in 2016, have an early-mover advantage, as their growth is primarily seen being driven by their expansive content library and superior product experience built on a trove of data and insights from operations in other geographies.

There are two to three factors that drive this. One is the range of content and titles they provide owing to their access to deeper and broader content, with them being global players. The second differentiation is technology and user interface: How good their recommendation engines are, how they are able to anticipate and predict what the consumer wants, and how you present the relevant content to the consumer in an easy-to-search fashion,” said Ajay Gupta, a partner at AT Kearney who looks at communications, media and technology practice at the consulting firm. “The third driver is the creation of synergies between the e-commerce and content business, as has been in the case of Amazon. That’s an interesting synergy because ultimately it’s the same target audience that is internet savvy,” he added.

The fact that Amazon Prime Video comes bundled with the company’s next-day delivery service has brought it huge number of users. Netflix also signed up with Airtel, wherein the telecom operator gave a three-month subscription of Netflix with every Airtel post-paid connection. “Almost two lakh users came to Netflix through Airtel tie-up, which was rolled out in August,” said an analyst tracking the company.

Business Standard

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