The Inevitable Streaming Wars in India

India’s video-on-demand market could grow to $5 billion by 2023


Janya Sindhu

3 years ago | 6 min read

We’ve always been faced with different choices when it comes to consuming content. I used to be confused as a child about whether I should watch Disney or Nickelodeon, which changed to Comedy Central or HBO. Now I and everybody else find themselves in the same boat as choosing Netflix or Prime Video or Hotstar? Streaming has changed the way we consume content in a life-altering way

The entertainment industry has been affected largely with entrants like Netflix and Amazon Prime Video, disrupting the market. Mobile data traffic is growing as more Indians spend time streaming videos, which is expected to account for 75% of overall mobile traffic by 2024. The OTT market is seeming more and more lucrative for major players.

Disney owned Hotstar is leading the pack with 300 million active users, however, most of them are free users that have to see ads in order for Hotstar to earn revenue. Most of the traffic that is seen by the platform is thanks to sports, especially the business of cricket aka IPL (don’t fight me, go watch Patriot Act if you don’t believe cricket is a business!). Netflix only has about 1.5 million users in India yet. Netflix’s monthly average order value (AOV) in India was Rs640 ($9.36) per customer or nearly Rs8,000 per annum. In comparison, a Hotstar customer’s AOV stood at Rs376 per annum. This is because Netflix seems to target the more affluent users who are willing to spend on “Netflix and Chill” (No, I do not mean it in that sense, we Indians are “pure”).

With original content like Mindhunter, The Crown and even Bojack Horseman; Netflix capitalizes on the kind of content they distribute. Yes, Hotstar does have rights to HBO content but we all remember how Game of Thrones ended. It doesn’t make it the ultimate content holder.

Below we see the top players according to the top smartphone installs in India. Netflix makes the top 5, but it leads from the bottom. Keeping this in mind, Netflix has launched a new plan which is Rs. 199/month, Rs. 300 lesser than their cheapest original plan, hoping to gain a larger share of the market.

India’s video-on-demand market could grow to $5 billion by 2023 from $500 million last year, estimates researcher Boston Consulting Group. Of course, JioTV is third, I mention billion dollars, Mukesh Ambani is bound to pop up. JioTV offers viewers over 650 live channels, which is free for all Jio users.

Another major streaming service is MX player owned by Times Group. The service is free which is why it has 150+ million active users. It is highly used for content in regional languages such as Hindi, Tamil, Telugu and more. It has also planned to launch 20 original web series on the platform.

Now, what do we have here? A lot of trucks, trying to take each other over…in a traffic jam. These big players have crowded the market and are already at loggerheads against each other. So with even a small slip, it can affect the industry and the companies largely. Unfortunately for these platforms, there are many small slips approaching.

While looking into the future, we see that Netflix and Amazon Prime Video have already planned to invest more in India to fuel the content boom, with original series and movies based in India. Netflix, in fact, plans to triple its growth in the next year to about 4 million users. This step is especially important for them considering Netflix is losing users in the US which is worrying the investors.

For years Netflix has been the go-to binge site. Indians aware of the Western phenomenon would also eagerly waiting for it to launch in their home country, but now things seem extremely different. Netflix sees a threat approaching from major companies like Apple, Disney, HBO and NBC.

Why are these companies a threat? Well for starters, binge culture is one of the big drivers for the growth of revenue in this industry. Old shows such as Friends, The Office, Parks and Recreation; all have become popularized with the new generation thanks to the platforms. In fact, even Steve Carrel (All Hail Michael Scott!) believes that the show has been revived in its own way as a lot of people started watching the show thanks to Netflix (Prime Video in India). Since so much traffic and user activity comes from these old shows, the launch of all these new platforms will lead to Netflix and Prime Video losing the rights to shows that have helped all of us fill that background noise while working (or using your phone..).

NBC’s Peacock is ready to take back shows like The Office, Parks and Recreation, Brooklyn 99. While Disney+ has control over all Marvel content (SUPER EXCITED RIGHT?!) which let’s not forget has produced the highest-grossing movie of all time. If I was Netflix’s Reed Hastings, I would be trembling.

Furthermore, Disney owns Hotstar so whatever shows that come on Disney+ will come on that as well, and also Hulu, another US Streaming platform, is owned by Disney so all those shows are with Hotstar as well. I know, it’s all so confusing you need a flow chart.

Apple has recently launched Apple TV with lots of original shows. The interface, I must say is beautiful. I scrolled down and saw almost all the latest movies and sadly, I had to compliment Apple on its content. BUT. When I tried to watch Toy Story 4, Apple being Apple, told me I had to buy it for around Rs. 600 — yes. Thanks, Apple for this. You broke my little heart. So, it isn’t like Apple is gonna disrupt the market much in India.

The one I am most excited for is HBO Max which is going to host content from The CW, Cartoon Network/Adult Swim, TNT, and of course, HBO. It will also host iconic shows such as Friends, for which Netflix paid $100 Million Dollars for, oof. HBO is also putting in money for original content for HBO Max, with 50 new shows being introduced in its first year. Will HBO disrupt the working of Hotstar? Maybe a little, but Hotstar shouldn’t worry since it has access to a large depository of content thanks to Disney and what is most lucrative for Hotstar is the Live Sports feature that attracts most of their users. Plus HBO Max is not planning on entering the market anytime soon, so Hotstar can take a breather.

Honestly, all these new entrants are a major threat to Netflix as they would be targeting all the same audience — English Speaking. Whereas the real war seems between the streaming platforms who are popular in Tier 2 and 3 cities. The rural reach of OTT Platforms expected to grow by 80% by 2022 according to a report by RedSeer Consulting. These OTT platforms include MX Player, Hotstar, Jio TV, Voot and AltBalaji.

It is now estimated that there are 251 million internet users in rural India, and this is expected to reach 290 million by the end of 2019 according to Economic Times. The report also found that 97 per cent of users use a mobile phone as one of the devices to access the internet. Companies have to focus on is this activity of the rural area. Netflix has already understood the enormity of this data which is why they released a new plan just for mobile. However, rural India has always been a challenge for any company and for companies like Netflix and Amazon Prime Video it is truly their Achilles Heel. This is why it makes sense for them to keep changing their prices and accessibility, but nothing is more important than content.

Netflix is running to create Indian content and has seen large success with their flagship Hindi show “Sacred Games”, Prime Video has a large depository of regional languages and other Hindi Originals, and Hotstar, well I am tired of talking about how well Hotstar’s strategies work for them.

With the content boom over our heads, nobody knows where a bomb will drop to end this war, which platform will be the last one standing or whether a winner will actually arise from the ashes of the fallen streaming services. There is one thing we know, we’re in for some amazing binge-worthy content.

This article was originally published here


Created by

Janya Sindhu







Related Articles