How Amazon Prime is adding more clout to its India services

The content war between Amazon Prime and players like Netflix and Hotstar has intensified over the last few months. Amazon Prime maintains a clear lead as far as video-on-demand services in India are concerned, and its recent tie-up with Salman Khan’s production only adding more clout to its offerings.

The five-year deal with Khan’s production house will give Amazon Prime exclusive right to his upcoming films before their television premiere.

According to some reports, Amazon has set aside $100–125 million for original programming and content acquisition for the current financial year after initially committing at least Rs 500 crore to create original content in India.

It is worth mentioning that Amazon Prime made its entry into the India market much after Netflix. However, as per the latest rankings by app analytics firm App Annie Inc., Amazon Prime ranked fifth, while Netflix ranked ninth on the basis of monthly active users for the first half of this year.

Explaining the phenomenal rise in subscription-based viewership, Nitesh Kripalani, Director and Country head, Amazon Video India, has gone on record to say, “We are humbled by the tremendous response that has led to Prime sign-ups more than doubling since our launch, consuming nearly a billion minutes of content.” 

Not without competition

In response to the aggressive stand taken by Amazon Prime, Netflix has also announced two new original series from India: 'Selection Day' and 'Again'. Netflix has also signed a deal with actor Shah Rukh Khan’s production company Red Chillies Entertainment for both his existing and upcoming titles.

Another indication that Amazon Prime’s growth in India will not be without stiff competition is the interest Netflix is showing to buy the entire content library of films and music from Eros Group for around $1 billion. According to reports, the deal is still in its initial stages and also involves parallel discussions with Amazon Prime and Apple Inc.

To add more muscle to its marketing game, Netflix recently entered into strategic partnerships with leading telecom service provider Bharti Airtel and Videocon direct-to-home TV service. It has also tied up with Vodafone wherein customers can pay for their Netflix subscriptions via their monthly telephone bills.

Understanding Amazon Prime’s popular appeal

One of the biggest factors that has helped Amazon Prime witness phenomenal growth in India is the price factor. Amazon Prime videos are available at a fraction of the price of its global competitor Netflix. At monthly subscriptions ranging from Rs.500–800, depending on the plan, Netflix has maintained its global pricing and is the most expensive video streaming service in India. 

Moreover, Amazon has been investing heavily in media content for Indian audiences. As already pointed out, it has invested more than Rs 500 crore in 2016 in India alone.

Explaining the success of Amazon Prime, Amit Agarwal, Sr. VP Amazon and Country Manager India, Amazon in an interview had stated, “We measure the number of hours of streaming and the number of hours that people spend; the engagement with Amazon is increasing on a daily basis. This is making Amazon a daily habit.”

The road ahead

According to the Indian Media and Entertainment Report 2017 by KPMG India and the Federation of Indian Chambers of Commerce and Industry (FICCI), between 2016 and 2021 mobile video traffic in India is expected to grow at a compound annual growth rate of 68% and the number of video capable devices and connections is expected to grow 2.2 times, crossing 800 million in number.

Some experts also believe that over the next two to three years the growth of video on-demand services will also depend on how the telecom ecosystem responds to a higher number of people using high-speed bandwidth services and also on the collaborations within the industry.