$5.0 billion up for grabs
India’s online video market, comprising subscription and advertising sales, will grow ten times in the next five years to reach $5.0 billion by 2023 from $500 million in 2018, estimates BCG. Although the market presents an enormous revenue opportunity for Netflix (NFLX), Netflix has some catching up to do—it has just 1.2 million subscribers in India, while Amazon (AMZN) and Hotstar have 2.5 million and 3.0 million, respectively. Netflix is investing in local production to catch up with the competition.
Hotstar, now owned by Walt Disney (DIS), is a local Indian video service that was launched a year before Netflix became available in the country. Hotstar quickly became the competitor to beat thanks to its rich library of popular Indian movies and shows.
Massive room for growth
Although Netflix may be trailing in India now, the country appears to have room for massive growth. The Wall Street Journal, citing an IHS Markit expert, reports that only 3.0% of India’s 4G smartphone users have digital video subscriptions. Furthermore, The Economic Times reports India’s top-three mobile operators had more than 430 million 4G subscribers on their networks at the beginning of this year.
Cheap smartphones, falling mobile data costs, and faster mobile Internet speeds are some factors fueling digital services’ uptake. Walmart (WMT) has bought an Indian e-commerce operator, and PayPal (PYPL) has launched domestic operations in the country to take advantage of its expanding digital retail and mobile payment markets.