Leading video-streaming service Amazon Prime Video is reportedly in advanced talks to acquire MX Player, a video player turned streaming platform that is currently owned by Times Internet. If the deal goes through, Amazon Prime Video (APV) can possibly see a four-fold jump in its customer base in India, making it the top player in the country’s over-the-top (OTT) streaming segment.
As of now, Disney+Hotstar is the market leader in paid OTT subscriptions with more than 50 million users. As per industry estimates, Netflix has a subscriber base of around 6 million in India, while APV’s subscriber base is above 20 million users. With Netflix and Disney+Hotstar struggling with issues related to production of original content and losing of sports viewers respectively, time is ripe for APV establish itself as the dominant leader in India’s OTT market, which is presently growing at 20 per cent annually.
What has helped APV immensely is their compartmentalisation of target audience and subsequent development of micro strategies. According to the Ormax OTT Audience Sizing Report 2022, that came out in December last year, India’s OTT audience is more than 423 million people, out of which only 119 million use active paid OTT subscriptions. In fact, the report shows that majority of viewers, over 69 per cent of India’s total OTT audience, do not watch paid content at all. This is where Amazon is planning to deliver their knockout punch.
One Size Doesn’t Fit All
For a diverse country like India, the OTT market comes with its own complexities. At times, the heterogonous nature of this market has forced global streaming majors like Netflix and APV to come up with plans that are exclusive to India.
In terms of revenue generation, streaming services categorise their audience broadly into Subscription - Video On Demand (S-VOD) customers and Advertising - Video On Demand (A-VOD) customers. Although A-VOD users watch only free content, streaming services bring in revenue from these users through advertisements that are displayed during free video viewing. S-VOD content is either sold directly, or in a bundled form with telecom companies. Subscribers who avail steaming services through bundled and other indirect means outnumber direct subscribers by 66 per cent, as per the Ormax report. In this regard, APV is able to bring in a lot of users through bundles that are sold along with Airtel and Jio internet recharge packages.
The increased penetration of smartphones and high-speed internet in the country also helps streaming platforms add more users to its audience base because video content is largely consumed on hand-held devices by Indians. In fact, an executive in-charge of revenue at a popular OTT platform claimed last year that India’s craze for OTT platforms have become a key driver of demand for smartphones in India. To lure in mobile content viewers, streaming services like Netflix and APV have exclusive mobile-only plans. Although Netflix made this move back in 2019, making India the first country to have mobile-only Netflix plans, APV was slow in catching up and launched a similar plan just last year. However, Netflix’s woe is that most of its plans are more expensive than Disney+Hotstar and APV despite their recent price cuts.
Another big factor to keep in mind while catering to Indian audience is the diverse language preferences in the country. A report by FICCI and EY predicts that 54 per cent of content produced for OTTs by 2024 will be in languages other than Hindi and English. This is why the major streaming services are hurrying to get ‘regional’ content on their platforms. Amazon made a smart move in this direction by getting OTTs that cater to specific language audiences like ManoramaMAX (for Malayalam content), hoichoi (for Bengali content), and NammaFlix (for Kannada content) to integrate within the APV platform as separate paid services.
While all these steps did help APV increase its popularity in the Indian OTT market, the likely acquisition of MX Player will heavily tilt the game in its favour. This is because of the large customer base that MX Player brings along with it.
Opportunity Of A Prime Time
MX Player was first developed by South Korean company J2 Interactive as a media player. It became a popular app among Indian Android users who largely used it to view pirated content. In 2018, Indian media giant Times Internet acquired the popular media player and relaunched it as a streaming platform.
At that point, its moat over its competitors was that it already had a large customer base, more than double that of premium streaming services, and over 80 per cent of its users were under the age of 34. As an A-VOD service, MX Player was able to thrive among young audience who were keen on viewing video content on mobile phones without shelling out large subscription fees.
Now, as Times Internet undergoes a spree of divestments—having recently sold short video platform MX Takatak, restaurant tech platform Dineout and online publications MensXP, iDiva—APV has a great opportunity of tapping into India’s A-VOD user base which has over 184 million people, as per Ormax’s estimates.
Primary Player
Amazon will have to tick off a lot of boxes to install itself as India’s most formidable OTT player. In terms of S-VOD users, it already has a large base and is adding more with its in-app integrations that offer more vernacular content. There are also reports of APV trying to get its hands on HBO content in India after Disney+Hotstar recently chose to let go of its right to stream HBO shows in India. In terms of A-VOD, an existing platform called miniTV, housed within the main Amazon app that is used for e-commerce, was Amazon key driver until now.
Used for luring in TV viewers, miniTV also offers a shop-as-you-stream option because it is placed within India’s largest e-commerce platform. This is targetted at gathering more advertising revenue because it would make more sense for businesses to advertise themselves on a platform where users can make purchases directly. However, there is no evidence yet of this platform taking off the way Amazon would have wanted. Under such a situation, the acquisition of MX Player will help Amazon’s ambitions in a huge way.
But one key box that remains unchecked despite APV’s successes so far will be that of live sports streaming. This is what helped Disney+Hotstar become a leading OTT player because it had exclusive digital rights to stream IPL matches. Now that JioCinema has disrupted the IPL streaming market by offering it to users for free, Disney+Hotstar is fearing a fall in its subscription base. Given the lndian audience’s large appetite for live sports, and especially cricket, Amazon would not want to miss out on this segment.
APV made its first step in live sports streaming by entering into a partnership with New Zealand Cricket in late 2021. It currently holds exclusive rights to stream cricket matches taking place in New Zealand to Indian spectators. While making this deal public, Gaurav Gandhi, country head at Amazon Prime Video India had said that it’s APV’s first day in its sports journey and expressed optimism about what this step means for APV in the future. Moving forward, if Amazon can manage to stream more live matches for its cricket-crazed target audience, while sustaining its growth in other segments, it can crack the A to Z of India’s OTT market and truly become its primary player.
