New Delhi: Apple’s foray into the global content business may be easier visualized than done, at least as far as the Indian market is concerned. The California-based company that announced its new streaming service Apple TV+ on Tuesday, scheduled to hit screens on 1 November, is a late entrant to the already crowded OTT (over-the-top, as it is called in India) video market. India is currently home to more than 30 platforms, including US services such as Netflix and Amazon Prime Video, and a range of home-grown services such as Hotstar, ZEE5, ALTBalaji and Voot.

One problem is that access to the service is likely to be extremely limited. Apple TV+ will be available on the Apple TV app, along with a seven-day free trial on Apple devices such as iPhone, iPad, Apple TV 4K, Apple TV HD, Apple TV (3rd generation), iPod Touch and Mac, besides select 2018, 2019 and newer Samsung smart TVs, and on Amazon Fire TV, LG, Roku, Sony and Vizio platforms. Apple, however, accounts for only 1.6% of the smartphone market in India, where smart TVs comprise 30% of all television sales.

“Apple TV+ will work only on iOS devices. India is predominantly an Android market. With such low penetration of Apple devices in India, the impact will be minimal," said Abneesh Roy, senior vice president (research) of Edelweiss Securities.

Secondly, the Apple TV+ library doesn’t have a lot to offer the mass Indian consumer at the moment. The service, which at launch will include eight original shows such as The Morning Show featuring Jennifer Aniston and Reese Witherspoon and See, a sci-fi drama featuring Jason Momoa, has no Indian originals in the works. All streaming players in India, including Netflix and Amazon, have made a conscious effort to dish out original content in multiple local languages, including films and serials set in small towns featuring popular local faces. As recently as Wednesday, Netflix announced a partnership with Dharmatic Entertainment, the digital content arm of Bollywood filmmaker Karan Johar’s company Dharma Productions for a range of original films and shows. It already has deals with Shah Rukh Khan’s Red Chillies Entertainment to create content and with Aamir Khan to acquire the actor’s movies. Arch-rival Amazon Prime Video, on the other hand, has long-term deals for feature films produced by Johar and actor Salman Khan. Further, when Hotstar starts to route Disney+ content to India in the months ahead, it will be localized by dubbing or by adding subtitles in Indian languages, including Hindi, Tamil and Telugu. Together, OTT services are slated to invest about 2,500 crore in original content in India this year, according to an earlier Mint report.

“Premium audiences may lap up the Hollywood content, but the service will find few takers without originals," Roy said.

The existing services perhaps see no reason to fear Apple TV+.

“We sometimes look at everything as competition, when what it’s actually doing is creating a culture of high-quality storytelling. With all these services coming in, there are more opportunities for creators and we must celebrate that. We are a country of 1.3 billion people and I think everybody has room to play," said Monika Shergill, head of international original series at Netflix India. “At Netflix, we’ve always believed our primary goal is to bring very high-quality stories and if the market matures, it can only be an advantage to everybody."

To be sure, for Apple, the focus on new gaming and content streaming at aggressive monthly tariffs may stem from more than a desire to diversify. The streaming move comes on the back of the company looking to create new revenue streams amid falling phone sales globally.

Overall, Apple posted quarterly revenue of $53.8 billion in the June quarter, an increase of 1% from the year earlier. Sales of iPhones generated $26 billion in revenue, down 12% from the June quarter last year.

However, the focus on subscription-driven revenue may be a happier hunting ground for the company: services generated a record $11.5 billion in revenue for the company in the June quarter, with revenue excluding iPhone sales increasing 17% from last year.

“Services is a big bet for the company. They have realized they have to keep users hooked in the iOS ecosystem. No other brand has this kind of control on its end-to-end ecosystem," Tarun Pathak, associate director of Counterpoint Research, said. “The content subscription is at an aggressive tariff as Apple does not want price to be a deterrent at an early stage. It may even look at acquisitions in the content space going forward."

Apple, the world’s third largest smartphone seller after Samsung and Huawei, has a minuscule share in the price-sensitive Indian market, where Chinese budget brands such as Xiaomi, Vivo and Oppo and South Korea’s Samsung are top sellers. Budget smartphone sellers dominate, with a 95% share of the smartphone market.

However, the brand, which opted for a strategic shift in pricing strategy in April with discounts on its flagship iPhone XR, has realized the importance of reducing price entry barriers for the iOS ecosystem. In April, the phone maker decided to opt for price cuts in India and brought down the price of the 64GB iPhone XR from 76,900 to roughly 59,000. Similar discounts were introduced for other variants of the same model as well. Indian consumers lapped up this scheme.

“Apple is realizing that with the saturation in China, they have to look at the next set of emerging markets and their pricing of the iPad, Apple Watch series 3 and iPhone 11 reflects that," Pathak said.

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