Homepage / Technology / Amazon and Netflix pitch cricket in an effort to win the Indian media market
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


Amazon and Netflix pitch cricket in an effort to win the Indian media market

Its plot is as Indian as they come, featuring murky dealings behind the razzmatazz of a hugely popular cricket league.

But the drama series Inside Edge, launched by Amazon to rave reviews in June, is proof of a rising foreign presence in India’s fast-growing online entertainment business.

US giants Amazon and Netflix are both ramping up investments, creating expensive new Indian content in the hope of capitalising on the explosive recent growth in smartphone penetration and data consumption. Yet they face stiff competition from India’s established television companies, which are investing in online platforms of their own — and whose executives warn that the US groups will struggle to apply their standard playbook to frugal Indian consumers.

Inside Edge was “certainly more expensive” than the “much lower quality” television shows previously produced in India, says James Farrell, Amazon’s head of video content for Asia-Pacific.

It is available, along with a suite of international and Indian films, as part of Amazon Prime — the service that also offers perks such as faster delivery of products. Prime membership costs $99 a year in the US — but less than a tenth of that in India, the lowest rate offered in any market, as Amazon tries to lure viewers who could become loyal customers of its broader ecommerce business.

“Now more than half our new customers are coming from the video service . . . and the Amazon universe is pretty fantastic once you get in,” Mr Farrell says.

More from The Financial Times:

The aggressive pricing is part of Amazon’s intense expansion drive in India, even at the cost of heavy operating losses for the foreseeable future, after it was relegated to a marginal role in China. The US group has committed $5bn in funding to its Indian entity, which is in a battle for supremacy with Indian ecommerce unicorn Flipkart.

Netflix has also been building its presence in India since launching there in January 2016. This month, it announced plans to film two new Indian drama series: one, like Inside Edge, focused on cricket and corruption, and a second about a female homicide detective in New Delhi. It had previously bought the exclusive streaming rights to wrestling movie Dangal and historical epic Baahubali 2, two recent releases that are the highest-grossing Indian films in history.

But Netflix, which, unlike Amazon, has not slashed its subscription rates, will find India an utterly different proposition to the US and other developed markets, says Sudanshu Vats, chief executive of Viacom18, one of the country’s largest television networks.

Netflix’s basic monthly subscription charge of $8 represented a huge discount from traditional television pricing in the US, Mr Vats notes — but the opposite is true in India, where monthly cable television charges are typically less than half the cheapest Netflix option.

“If they continue to have global pricing in India,” Netflix might attract a maximum of 3m subscribers, Mr Vats predicts. “That’s still a very small number in the Indian context; it’s scratching the surface. It’s a very good business model but it doesn’t scale.”

Jessica Lee, Netflix’s head of communications for Asia, says that it is targeting “the top end of the market” with its pursuit of “strong, quality titles”.

“At this point, we are keeping pricing fairly consistent across the world . . . India is a massive market and there’s still a big potential with early adopters, world travellers,” she says.

While they have attention-grabbing “marquee shows”, Netflix and Amazon are unlikely to be able to match the sheer volume of local content offered by in-country rivals, says Uday Shankar, chairman of Star India, which claims 650m monthly viewers for its 58 television channels.

“We at Star create almost 18,000 hours of content every year,” he says. “Clearly that’s not a model that [Amazon and Netflix] can sustain very easily.

“Star has rolled out its own digital platform, Hotstar, offering a huge library of films and drama series from the US and India for about $3 a month — as well as a free, advertising-supported service with more limited content.

For now, Hotstar’s growth is subsidised by Star’s traditional television services, and Mr Shankar sees little chance of the former overtaking the latter in the foreseeable future. Perhaps 1m to 2m Indians are currently willing to pay for online content, “and I struggle to think that number could jump to 20m or 30m in the next five years,” Mr Shankar estimates.

Many Indians, he says, are highly conscious of the cost of mobile data usage — meaning that “they don’t even consider YouTube free — because it costs them money for data”.

Data consumption is surging, however, amid a price war in mobile services instigated by Reliance Jio, backed by India’s richest man Mukesh Ambani. Jio claims that in the six months since its September launch, it helped drive national mobile data consumption from 200m gigabytes to 1.2bn per month, with Jio subscribers alone consuming 1.7bn hours of video each month.

For some in the industry, the intensifying competition is unalloyed good news. Eros International, a Mumbai-based film distributor, has seen an opportunity to take advantage by pursuing sale talks on its library of more than 3,000 films, at a reported asking price of $1bn. It has made contact with potential buyers including Apple, offering the US company an opportunity to expand its catalogue of Indian film content, says a person with knowledge of the discussions.

Returns for the mainstream media industry have long been held back by what consultants at Deloitte described in a recent report as “rampant piracy”. They estimate that the problem costs the sector Rs190bn ($3bn) a year, with films downloaded in their millions from websites based mostly in North America. Many Indians prefer to buy pirated content on memory cards from local merchants, to save on data costs.

“Piracy is a big problem but you have to live with it,” says Sushilkumar Agrawal, chief executive of film distributor Ultra Media. “We’re not going to go into the street and fight with people, and this is at the bottom of the police’s list of priorities.”

Still, Mr Agrawal views the US groups’ arrival as an exciting potential source of new funding for Ultra’s expansion into production. “Amazon are paying good money to the content owners — and they’re going for new productions, so we have the opportunity to produce more and more content for them,” he says.

But despite the ever-expanding feast of online video options, he warns, this industry faces a long struggle to build awareness and supersede traditional television, in a heterogeneous developing country of 1.3bn people.”

Even in Mumbai, some people don’t know how to do anything except switching the channel — so forget about connecting a smartphone to the TV,” he says.

Source: Tech CNBC
Amazon and Netflix pitch cricket in an effort to win the Indian media market

Comments are closed.