Amazon takes battle to Netflix with mobile plan

The battle for Indian viewers has intensified among video-streaming services with Amazon Prime Video on Wednesday rolling out a mobile-only plan at ₹89 per month, about a year after rival Netflix introduced a similar plan at ₹199.

For both American companies, the mobile-only plans are the first time they are introducing them anywhere in the world. However, the Prime Video plan is only for Airtel prepaid customers, while the Netflix plan is available on all mobile networks.

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The new Prime Video plan is created especially for a mobile-first country like India, Amazon said in a statement. Netflix, too, said at the time of the launch of its mobile plan in July 2019 that its aim was to broaden access since “India is so mobile-centric”.

“India is one of our fastest-growing territories with very high engagement rates. Buoyed by this response, we want to double down by offering our entertainment content to an even larger base of Indian customers,” Jay Marine, vice-president, Amazon Prime Video Worldwide, said in a statement.

Since entering India more than four years ago, both Netflix and Amazon have been fighting it out with compelling and diverse local and foreign content. Sector experts said streaming services will up their content game in 2021 by increasing budget allocation by 25-30%. In December 2019, Netflix founder and chief executive Reed Hastings said he would invest ₹3,000 crore in India in the next couple of years. A month later, Amazon chief Jeff Bezos said Prime Video was doing better in India than anywhere else, and the company had decided to double its India investments. He did not share details.

A report by advisory and research firm Media Partners Asia said 60 streaming services in India together spent more than ₹5,000 crore on producing content in 2020.

In an earlier interview, Gaurav Gandhi, director and country general manager, Amazon Prime Video, said India boasts one of the largest Amazon original production slates. It includes 55 Amazon original series currently in various stages of development and 31 in various stages of production, he added.

“The growth of subscription video streaming services in India will continue to accelerate rapidly, backed by a focus on high-quality, cinematic value local original content,” he said.

While Amazon bet on big Bollywood acquisitions, Netflix remained focused on originals and saw more success with international programming.

“Amazon clearly looks at movies first and then originals. However, Netflix’s movie strategy has been thoroughly muted and even its acquisitions have been the arthouse kind that could play both in India and abroad,” a senior executive at a rival platform said on condition of anonymity.

The Amazon library today is dotted with mainstream movies such as Coolie No. 1, Gulabo Sitabo, Shakuntala Devi and Soorarai Pottru. It’s also entered the sports space after it won the rights to air all cricket matches to be played in New Zealand till 2025-26.

Despite its efforts to widen its appeal, Netflix is still better remembered for indie cinema like Bulbbul and Raat Akeli Hai besides Korean (Kingdom), Spanish (Money Heist) and German (Dark) titles. Its strategy is centred on finding authentic, local stories that can travel globally. Indian originals such as Lust Stories and Sacred Games have been lapped up abroad while British comedy-drama Sex Education, South Korean zombie tale Kingdom and psychological thriller Black Mirror: Bandersnatch have worked in India.

“Netflix may have started the trend (of a mobile-only plan) but the customers belonging to its core target group, which is a more upper-class segment, are likely to be screen-agnostic and possibly moved to TV sets especially over the course of the pandemic as broadband penetration evolved,” said Mihir Shah, vice-president at research firm Media Partners Asia. The mobile plan makes better sense for Amazon, Shah said, that is targeting a wider consumer base and wants to penetrate deeper into the heartland. Amazon’s revenue per user (RPU) was pretty low even earlier at ₹129, he pointed out, adding this is an extension of the same strategy.

“The language diversity of its library helps further, given that “India is not an easy market, it has a high, middle and low class whose consumption and relevance patterns are different,” said Vishal Shah, managing partner at GroupM-owned media agency MediaCom.

According to a Media Partners Asia report published in May 2020, Amazon commanded 17 million subscribers in India while Netflix had above 5 million. Yet, a new report by the same research firm earlier this week shows Netflix commands 14% of India’s total online video revenue while Amazon takes up 7%.