In the previous episode, we saw how dirt-cheap data and increasing smartphone penetration paved the way for India's booming online streaming industry (here's E01 in case you missed it). The market is now up for grabs, and each player has their own set of weapons.
In 2018, there were around 40 OTT players in the Indian market - a huge jump from none in 2010. The war for eyeballs across the country began, caused by an explosion of internet users with quick and easy access to any content on the internet.
The leader and first-mover advantage of the Indian OTT industry went to Hotstar, launched by Star in 2014. The growth of Hotstar in India was fueled by it acquiring the rights to broadcast IPL in 2015 which kicked off the live OTT platform in India and brought to Indian subscribers live cricket, shows and movies. By 2018, Hotstar had over 150mn active users and 350mn downloads.
According to Hotstar’s India Watch Report 2018, 96% of watch time on Hotstar comes from videos longer than 20 minutes, while one-third of Hotstar subscribers watch television shows. Hotstar slowly also began investing in generating original content such as “Hotstar Specials”.
Hotstar’s offering to customers was simple - a one-stop-solution to watch live sports, movies and everything else you can ‘consume’ on the internet. But Hotstar specialized in content like live sports, where the value of timing (watching live) was immense. (This dependence has somewhat gone away with the entry of Disney’s acquisition of Fox Network for $71 billion). Hotstar now has access to the entire Disney-universe of homegrown content which provides a cushion against the big boys entering the town.
Despite this, there existed a white-space of users that Hotstar left untapped, and others saw an opportunity.
Enter Netflix and Amazon Prime Videos
The two global streaming giants, with their ability to flex capital, were ready to woo the millennials tired of Indian drama and soaps on television.
All this led to a heady mix of fresh, compelling content that saw a sudden burst in homegrown content creation, production and distribution industry.
Millennials started ditching TV for online content (along with big cinema production houses, who now started partnering with OTT players).
Netflix’s strategy to come in as the premium content provider at a higher price might have worked in the West, but we Indians are cost-conscious.
We want the best content, but don’t like paying too much.
In order to compete in the Indian market, Netflix began testing an innovative lower-cost, mobile-only plan in India, at Rs. 199 a month.
Hotstar subscriptions start at Rs. 299 for a monthly Premium plan, while Amazon charges Rs. 999 annually for a Prime subscription that offers a bundled package of Amazon Music, Prime Video as well as free delivery services from Amazon.
Amazon is never too far away from sensing a real opportunity anywhere in the world. India is one of its largest market (where it has promised to pump in $5Bn), and it has expanded its selection of movies and TV shows on Prime Video which comes with a typical Prime membership. What Amazon lacks in content, it makes up for with its unique bundled offering.
Amazon, Netflix and Hotstar (backed by Disney) are soon becoming the holy trinity of Indian OTT.
But, it looks like one player is winning the content war in terms of quality, with its super addictive and binge-worthy content. (We conducted a survey on our Instagram handle, which revealed that 75% of our readers prefer this platform over the other).
So, what differentiates and makes them the real dark horse in India’s OTT war? What gives them a unique competitive advantage? And, who the hell will win this war?
The answer is …
Dah-dum.
Head on to E03!
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