After launching a little over a year ago Amazon is the no.3 streaming service in India, but it will need more than original content to dominate the growing market.
Amazon is adding to its growing list of originals content in India with the announcement of its new series “Breathe,” an eight-episode psychological drama that is expected to go live on Jan. 26 across India and 200 territories worldwide.
While the show is another example of Amazon’s commitment to the Indian streaming market — where the company is the third most used service with 11 million subscribers — it is just a drop in the bucket Amazon will need to fill if it wants to be a key player in the country, which is populated by 1.3 billion people.
Currently, with 75 million subscribers, Hotstar leads the way in the Indian market followed by Viacom 18’s Voot, which currently has 15 million users.
Amazon needs to seriously consider adopting an ad-based streaming model.
What gives these two services the advantage over Amazon are their large catalogues of local content and, just as important, their price points. At Rs 999 ($15 USD) a year, Amazon is the cheapest subscription-based streaming service in the area, but that’s because Netflix and Amazon are the only two SVOD services in the area. Hotstar and Voot rely on an hybrid payment and ad-supported model, respectively, which is what a majority of Indians prefer. According to a report from research firm Counterpoint, only 2-3% of Hotstar subscribers pay for the service, while the rest stick with the free content.
Even with its growing list of original Indian programming, which now stands at more than 14 series, no one is going to watch the content if they can’t afford the subscription. In 2013, the median annual income in the country was $616, according to Gallup. To spend a chunk of that yearly income on entertainment that can be found elsewhere is something that most aren’t willing to do. Take Netflix for example. According to Counterpoint, approximately 6% of subscribers in India pay for the service and the rest (94%) take advantage of the ‘free first month’ trial through multiple credit and debit cards.
If the rumors of Amazon developing an ad-supported streaming service aren’t true, the company should consider it.
In November 2017, Ad-age reported that Amazon was in the process of developing a free, ad-supported video service. While Amazon has denied these claims, the company could benefit from it, especially in India for the reasons mentioned above — but they better do it quick because the market is growing.
In addition to the services that have already planted roots in the country, there have been rumors that Facebook is planning to launch Watch in India, where the social site is used by more people than any other country in the world. Facebook has also denied these claims, but if the company was to launch the platform in the country it could become one of the leading destinations for video entertainment, making it even harder for Amazon to find solid ground in the market.