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Published on July 13th, 2018 | by Guest

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Indian Market a Tough Nut to Crack for Tech Giants Amazon and Netflix

As Amazon and Netflix are fighting for the space in Indian markets, the rivalry to attract the audience is intensifying. India was once considered a low household income country but now is the world’s second-largest internet furnished company with a tremendous youth audience to its advantage which has exhibited tremendous potential. With the immensely increasing opportunities and challenges, the Indian market is proving itself, to be a strapping nut to crack for the American streaming leaders.

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Further igniting the rivalry, the two big-wigs have made huge contracts with Bollywood stars to enhance user base. With Netflix striking an impressive deal with, the fan actor Shahrukh Khan and his production firm Red Chillies Entertainment to air his movies on Netflix, Amazon plausibly picked the more lucrative star in India, the Dabangg of Bollywood, actor Salman Khan. The e-commerce behemoth Amazon has gained exclusive rights to air Salman’s movies before they are aired on any other platform.

Nevertheless, Amazon India has a stronger repository and treasure chest. They have prominent filmmakers and production houses on board like Karan Johar and his production house, Dharma Productions and Mukesh Bhatt’s Vishesh Films. Amazon has also committed $300 million for original Indian content in the Indian market. Amazon is trying to make it desi by launching more of original content for Indian market like Hindi film actors Richa Chaddha and Vivek Oberoi starred in its first original series, Inside Edge, released in July and reports came of the second season is in works. Moreover, Amazon has previously launched its high rated comedy show, Comicstaan, the Amazon Prime original series, last year and its third season is going to be released on July 13 this year and has already kicked up the pace.

According to a survey by London based IHS Markit, at the end of 2017, Amazon Prime held most likely a total of 10% over-the-top (OTT) streaming market with over 610,000 subscribers this data is in direct comparison with Netflix, which has a 2 million video service subscribers in India in December 2016, controlled only around 8% of the market. Amazon Prime Video beats Netflix’s subscriber base in India with a total subscriber count of 0.61 million and Netflix just having a subscriber base of 0.52 million.

Amazon released its thriller “Breathe”, starring R Madhavan in January this year whereas Netflix aired its “Concupiscence Stories,” a literary collection series of four short films by high-profile Indian bigwigs that breaks the taboo around women’s sexuality, in the country, last month and is this week releasing its first original Hindi series called “Sacred Games,” which is based on a novel by Indian author Vikram Chandra.

The companies are playing aggressively in Indian arena posters of the new shows have started to flood bus bars, shopping malls and metro stations of several cities and across the rural area. In the twinkling of an eye considered a luxury, an increasingly growing number of Indians are giving online tide services a try. The global bigwigs took notice of this changing scenario where more than 35 spout services have launched or expanded their businesses in India in the continue three and a half years, with much more planning. Many of these services are owned by local small screen networks and production houses like Balaji Telefilms, known for producing some of the most watched stock TV shows in India, has amassed over 2.5 million paying characters on ALTBalaji, a streaming service it launched last year.

India’s online video demand is now valued at over $700 million and is expected to grow to a whopping $2.4 billion in value by 2023. Much of the credit for the bang in streaming goes to the stark drop in India’s mobile data figures goes to the Reliance Jio, a telecom operator owned by India’s richest man, Mukesh Ambani, who kick-started an internet and telecom revolution in India in the second half of 2016.

Jio began to offer a considerable amount of free data and calling plans to its customers at no charge for an extended period of time. The upcoming months following this telecommunication revolution brought almost 10 million new users to the internet and changed this whole scenario and the way how people handle their data. Once called thriftily, Indians were now using reportedly clocking to 1.5 million terabytes of data each month.

According to Jehil Thakkar, an analyst with Deloitte consulting assemblage, another obstruction that has hindered the adoption of internet video services in India is pricing where people are used to low Cable TV prices unlike America, where people have had fewer incentives in moving away from cable TV. He further added that, In the U.S., a monthly cable TV subscription could expenditure more than $100, making offerings by Netflix, Amazon, and others unreservedly appealing. Meanwhile, Indian audience is used to lowest prices only up to a price point of $4 which has remained almost similar for the last two decades.

However, in Indian market many accommodations try to lure customers by low pricing and relying largely on advertising for revenue, urged  Frank Dsouza, working as an analyst with Price water house Coopers consulting group. He further added that in comparison according to the cheapest monthly plan offered in online streaming services is by Hotstar i.e. $3 every month while Netflix in India costs Rs 500 ($7.30) and Amazon has been very aggressive with the amount of Prime membership in India costs only Rs 129 ($1.90) a month or Rs 999 ($14.50) for a year in India. This service by Amazon, in addition to video service also includes Prime Music and faster execution for packages bought from Amazon.

In any case, competition is set to toughen in India market where Netflix is adding more of a localized content whereas Amazon along with bumping up its prices is coming with more of regional content also, which is quite popular. Several newer players are entering the Indian arena and trying to enhance their game. The ALTBalaji has launched most precisely a year ago and is the brainchild of Ekta Kapoor, the owner of Balaji Telefilms. The production house is producing high-quality content for Indian uses.

Another popular Indian video streaming agency is Hotstar, Owned by Star India is leading the streaming market with an active subscriber 150 million active users.  The three-and-a-half-year-old service is controlled by Twenty-First Century Fox and controls about 70 percent of the on-demand local streaming services market in India, according to estimates by research firm Jana.

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