Whether due to the stiff price tag of close to Rs 700 per month or the English-oriented context, the pace of Netflix’s subscriber acquisition has slowed, reports Anushree Bhattacharyya in New Delhi. In January, the number of downloads for the video OTT (over-the-top) fell to 4.2 million from 4.4 million in December 2016. Amazon Prime, on the other hand, appears to be gaining ground — it added 9.4 million users in January, up from 6.3 million in December 2016.
As Nikhil Rangnekar, media consultant, Lodestar UM, points out, compared with a monthly subscription cost of Rs 500-800 for Netflix, Amazon Prime charges Rs 499 annually or less than Rs 50 a month.
“Also, Netflix has much less Indian content and that may have helped boost Amazon’s viewership,” Rangnekar believes.
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Given lower CPMs (advertising rates) in India, most apps are looking to move from volume to value and charging consumers for premium content.
For instance, Hotstar charges Rs 200 per month for watching premium content. “Our checks indicate that the uptake of the paid subscription service is not high as the price-point appears to be a hurdle, ” analysts at Bank of America Merrill Lynch wrote recently.
“In our view demand will be high for R50-100 subscription for premium content. We expect the market to gradually move in this direction in the coming year,” they observed.
The most popular video OTT app currently is Hotstar with a user base of 63.4 million in January, up from 54.2 million in December. According to a BofA Merrill Lynch report, Hotstar’s significant volume growth, is also helped by Reliance Jio’s 4G launch. Hotstar’s content comprises programming across television, films and live sports updates, it has an edge over rivals thanks to its access to Star TV’s content ahead of the broadcast. The exclusive partnerships with IPL and HBO Originals also seem to be paying off.
However, the success has come at a price—Novi Digital Entertainment, which runs the platform, reported a net loss of Rs 409 crore in the first full year of operations, according to a filing with the RoC. Revenues from the business were Rs 186 crore of which Rs 4.1 crore came from subscriptions and Rs 138.5 crore from advertising. While Google’s free to watch video platform YouTube India’s revenues are estimated at Rs 700 crore.
The OTT market in India is estimated to grow to $272 million in 2017 from $202 million in 2016 with a better telecom infrastructure and rise in data consumption.