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Could Amazon’s Rising Streaming Services in India Hurt Netflix?

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Amazon’s rising growth in India

Amazon’s (AMZN) growth in India has been significant since it launched Amazon Prime in July 2016. Reportedly, Amazon Prime has become the third-ranked streaming service in India, after Hotstar and Viacom’s (VIAB) Voot.

Hotstar tops the Indian market with 75.0 million subscribers, while Voot lags far behind with 15.0 million users. Amazon Prime has about 11.0 million users.

Regarding revenues, Netflix (NFLX) tops the list of video streaming apps in India, according to a report by App Annie in November 2017, followed by Hotstar.

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Streaming competition intensifies

Indian users have been increasingly using Internet services and streaming videos and music owing to the availability of low-cost smartphones, reasonable data plans, and improvements in network coverage. Notably, higher affordability of smartphones has increased the popularity of content viewing.

Recently, US tech giant Alphabet (GOOGL) inked a deal with India’s telecom company Bharti Airtel to bring low-cost Android Oreo (Go edition) smartphones to the Indian market.

Amazon would need to pick up the pace to tap the growing need of the Indian market, which is already crowded with streaming service providers like Netflix, Hotstar, Voot, and SonyLIV, as well as other regional offerings. Reportedly, Facebook (FB) is planning to roll out Watch in India, which is the largest user base for the social media platform.

To tap India’s extensive customer base, Amazon is offering its Prime subscription service at an annual cost of 999 rupees (or $15), which is much lower than Netflix. Netflix charges 500 rupees per month for its subscription-based streaming service. Hotstar has a hybrid payment model, whereas Voot relies on an ad-supported streaming service for Indian users.

Amazon is also reportedly developing a free, ad-supported video service in the Indian market, where the majority of the users prefer watching free content.

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