In July, Amazon Prime launched in India. The loyalty program gives you access to deals before general users, and free expedited shipping on items. That's a pretty good package, but a Prime subscription in the US is accompanied by various other benefits including access to the Prime Video streaming catalogue, something that's still "coming" in India.
We initially heard the service was supposed to launch around Diwali, with November 9 being the last rumoured date, barely 10 days after the festival. In either case, the launch is getting pretty close now, and we believe that Amazon Prime Video could be a bigger disruptor in India's VoD marketplace than even Netflix.
In January 2016, Netflix launched in India, and changed the market. What had once been a sleepy niche occupied by a smattering of companies that weren't really getting to the users suddenly became a "hot" sector. The TV channels spruced up their offerings - one of which, Hotstar, is among our favourite services in the category now - and competition began to heat up.
Phone companies are getting in on the act too - Chinese phonemaker LeEco announced its 'supertainment' service, while Reliance Jio's video on demand service, which launched as JioOnDemand and is now known as JioCinema, has a pretty good library.
Most of these apps have different limitations. Hotstar, for example, has a pretty good library of English content thanks to its parent company Star TV, and a partnership with HBO. However, its interface is still full of bugs and there are strange issues that keep cropping up when you use the service. Most of the other channel-specific apps are limited by their catalogues, while others such as Jio's and LeEco's offerings are part of a bigger bundle, and not something all users can subscribe to - and their UI is in desperate need of an overhaul.
Netflix on the other hand has easily got the best UI in the business, and thanks to its strong "Originals" lineup, a catalogue that - for some viewers at least - can't be beat. On the other hand, Netflix's catalogue is also its biggest limitation. This is not a mainstream product - something that's reflected in its price as well. With a minimum fee of Rs. 500 per month (and Rs. 650 for HD streams), Netflix is two to three times more expensive than the competition. Soon after the launch, Netflix's team met Gadgets 360, and told us: "[Right now] the users are English speaking, iPhone toting, and credit card holding. We are not a mass service."
The landscape is shifting
The problem that everyone in the business is facing right now is that the subscriber base is really small. It's not something that is talked about officially - the companies don't really talk about their user base, nor do they are how many users actually opt to pay after their free trials run out. That's a pretty clear indicator that we're looking at a small market, and conversations with the heads of many of these companies have reaffirmed the idea. The numbers are small, and it's mostly the urban, tech-savvy audience that are signing up for these services.
In India at least, it's still really hard to compete with the kind of prices television offers, particularly when you factor the cost of data, still something most Indians can't take for granted.
But data costs are going down. Call it the Jio effect, but today, you can get 10GB of data from Airtel for Rs. 259. BSNL has promised to match Jio's plans, while Vodafone is offering 10GB at the cost of 1GB for new phones.
It's a process that's only going to continue; we're going to see the rollout of MVNOs soon, and although there's little clarity right now on how that will affect the telecom landscape for urban users, more operators means more competition and that usually means lower rates.
All of this means that Amazon is coming into the market at a great time. Data is getting cheaper, and phones are getting better. Our list of the best phones under Rs. 10,000 shows that you don't have to break the bank to get a device that offers a good experience anymore.
The other issue is content. With the exception of Netflix and Hostar none of the companies in this space have any standout programming that you need the service for. One platform has The Flash as an exclusive, and another has Arrow. Unless you are a fan of a particular show, it can be hard to distinguish one from the other. Hotstar has a good lineup of HBO content, with shows such as Silicon Valley, Westworld, and of course Game of Thrones that make it easy to justify the Rs. 199 per month subscription.
Netflix on the other hand has its award winning originals, ranging from dramas such as House of Cards to a growing collection of superhero shows made with Marvel. But Amazon also has its own original programming, such as Man in the High Castle, and Transparent, which has been winning accolades as well. We talked to many of the companies in this space in India and they told us that the problem with original programming is that it's really expensive.
If anyone is in a position to compete with Netflix on that front, it's Amazon. In fact, while Netflix has announced its first Indian Original series, based on Sacred Games, Amazon has already stated that it will premiere a cartoon series based on the hit film Baahubali. And apart from original programming from India, Amazon is also tying up with Indian filmmakers at a rapid clip. Amazon has tied up with Karan Johar's Dharma Productions, which will give it the rights to not just the existing catalogue of movies, but also early access to new movies, which will be available for streaming just a week after the theatrical release. It has also announced a partnership with Mahesh and Mukeh Bhatt's Vishesh Films, and Arka Mediaworks' SS Rajmouli. Big names from the Indian film industry are tying up with Amazon almost every week. Amazon, along with Facebook and Twitter, is now also in the race for the rights to air the IPL.
So data access is becoming less of a problem, and Amazon has enough content to stand out from the myriad of services. Having seen Amazon Prime Video in other markets, we can say that it doesn't have the same UI/ UX problems that many others suffer from as well. But it has one more advantage as well, which could go a long way, and that's pricing.
In the rest of the world, Amazon includes Prime Video in your Prime Subscription. You can get Prime Video separately in the US, but if you are paying for Prime, you're getting Prime Video. For now, there's no reason to suppose that this won't be the case in India as well. It's not certain yet, but if this is really the case, then even at the full price of Rs. 999 per year, you're getting Prime video at under Rs. 100 per month. The current promotional rate of Rs. 499 works out to under Rs. 50 per month. And of course you get other benefits we mentioned earlier and expedited delivery and early/ exclusive access certain deals on Amazon India.
With that kind of pricing, you can understand why Amazon is focussing on Bollywood and cricket. Amazon is looking to build a truly mass market product, having come in at a time when mobile data rates are dropping, allowing it to penetrate well beyond the urban circles that most VoD content is locked into right now. For Amazon, this would also be a way to lock users into its e-commerce platform - as long as the price isn't very different, wouldn't you prefer the service that also gives you free next day shipping on your online purchases?
For Amazon, Prime Video could be just a part of its campaign against Flipkart, but for the rest of the VoD market in India, it's going to be a game changer.