Launched in December last year, Amazon Prime Video aims to change the way consumers consume content and creators create content. BestMediaInfo catches up with Nitesh Kripalani, Country Head, Amazon Video India to understand the game plan
Archit Ambekar & Roshni Nair | Mumbai | February 21, 2017
There was a time when television was a luxury and probably only one person in an entire neighbourhood would own a spanking new TV. Everyone in and around the area would huddle in the front of the tiny screen and witness magic unfold. Lord Ram would defeat Raavan and save Sita and India would lift their first cricket World Cup.
But screens are no longer a novelty today. They have evolved from small to big to small again. From flat to curved to concave or convex and what not. They can today travel with you and they can be operated with the single of a finger. With the evolution of screens, the way people consume content has changed too. Today we don’t need to crowd around a television set and be at the mercy of programmers. All one needs is a smartphone and good Wi-Fi connection. Borders and language are no longer barriers and in the age and time of the internet, many online content providers are making their foray into the Indian market.
The newest among the entrants is Amazon Prime Video. Launched in December last year, Amazon Prime Video has promised to provide its consumers with the largest selection of Indian and Hollywood content, US TV shows a day after they are broadcast, kids programming and Amazon Original series. Amazon also announced the production of Indian Amazon Original series featuring the best talent and filmmakers available for Prime members.
Speaking about the response so far, Nitesh Kripalani, Director and Country Head, Amazon Video, India, said, “We have been very happy and humbled by how the customers have reacted to the service. What I can tell you is the number of signups for free trials and the conversion from free to pay has more than doubled after we launched Prime Video. The app is in the top five in the entertainment category on iOS and android, which is again a very positive thing. The wide selection and the early window content that we offered are working.”
Based on the subscription model, one can download the app for a month’s free trial and then avail unlimited content for an annual introductory price of Rs 499.
“Our revenue model is very simple, it is a subscription service. You have a one month free trial and then we have an annual Rs 499 introductory price. That is what customers pay to access unlimited content across devices. We think long term at Amazon and India is a very strategic market for us. So we are investing to change the way consumers are consuming entertainment. We want to invest to change the way creators create content. We have just announced 18 originals in December, nine of which are in development and the other nine are in production. We are working with some of the best filmmakers of the country and that is what our goal is – to change the way how entertainment is consumed, to liberalise and democratise how content is consumed in India,” added Kripalani.
But Indian consumers are still new to the concept of paying for content. How does Amazon Prime Video tackle this challenge and make consumers aware of their services?
“We just started our TV advertising and we are presenting a showcase of all the content that customers will get to consume. The next step is fairly simple, it is saying that we have got the widest selection of latest and exclusive content, irrespective of the language you want to watch it in. It is also a reliable and affordable service that can be accessed across devices. We have enabled things like low data consumption, which we know is a problem that Indian consumers face. We have great quality playback, doesn’t matter the connection is 3G or 4G. The video adapts to your service and it will have a promise of playback. Finally, from the value perspective, it is Rs 499 for a year, that is Rs 42 a month and we are offering cash on delivery. We believe that the combination of selection, reliability and affordable service will make customers like our service and this is what we have seen in other markets,” said Kripalani.
While chants of digitisation can be heard everywhere, the truth remains that internet connectivity is still a problem in India. Network is sketchy and people spend hours waiting for a video to load. Taking us through the checks and balances and the provisions they have made to counter this problem, Kripalani, said, “We have proprietary technology that we have developed. It enables consumers to watch great quality video irrespective of which screen they are on. It adapts to one’s network conditions, it adapts to the device specifications that one has. We implemented it in India. In India the bandwidth is very patchy, so we have enabled standard features like offline download and viewing. We offer three different quality streams – good, better, best – and we kept it simple so that customers can understand. For android users, we have enabled a feature called data saver, which is even more low data consumption for android users, who are a significant number of smartphone users in India. Third, we have focused on reducing the data consumption for every hour of content that we watch. A combination of these three is what we have done which is specific to India.”
Apart from direct competition from Netflix, today a lot of channels also have digital presence. Platforms such as Sony Liv, Hotstar, Voot and Ozee allow consumers to consume their content online. How does Amazon intend to tackle this competition and differentiate itself?
“At Amazon we think customers first. If you solve all the customers’ problems you will do well and that is what we have seen with our retail business and we believe the same thing with video as well. There are three things that we have focused on and they are getting the best selection, getting it on a reliable, convenient service that customers care about and finally it has to be valuable to the customer,” explained Kripalani.
According to Kripalani, any single person across the country who likes entertainment is a potential customer of Amazon. On the challenges they have faced while launching in India, he said, “The biggest challenge has been to satisfy the consumer’s demand. Any customer anywhere is demanding, including India. They want the best selection, they want it at their fingertips and they want to pay what’s value and that is the main thing. Solving the customer problem or customer demand has been the main challenge.”
Amazon has partnered with many big players like BBC, Lionsgate, TV Asahi for their content. What is it that they look for from their content partners?
“The biggest thing we look at is the customer demand for that movie or show. If we have something that we are interested in then we look to do long-term deals. Majority of the deals that we have announced are long-term. We look at whether that content is available on another service. For example, we know US TV shows and movies are difficult to get, a lot of customers are pirating it and if you offer the same content legitimately they are consuming it.”
Speaking about the tie-up with Amazon Prime Video, Myleeta Aga, Sr Vice-President and General Manager of South East Asia and South Asia, BBC Worldwide, said, “Amazon was very keen on our kids and factual content. In the last year or so, we have seen digital consumption in India increase exponentially. We are very excited to be partnering with Amazon Prime Video India to satisfy viewers’ demands for quality, premium programmes from the BBC.”
As far as Amazon’s partnership with Dharma Productions is concerned, sources close to the partnership confirmed that the partnership with Amazon Prime Video is more of a syndication deal.
“The partnership is for a certain number of years. The terms are different for different movies. The production house also helps the on-demand video platform for some paid promotion content. The reason for choosing Amazon Prime Video is the fact that Dharma wanted its content to reach out to the international markets. Its movies already earn well from international markets and this partnership helps it further strengthens this,” said the source.
Is the consumer ready to pay?
But is India ready to consume content online and more importantly to pay for it?
“Today, it’s all about content. If content is good, people are willing to pay for it. There may not be many subscribers now, but it is moving up gradually. By now people are paying for both Netflix and Amazon Prime Video. Currently, there are overlapping audiences. One challenge for which people are probably waiting to pay for content is the bandwidth issue,” said, Gopa Kumar, Vice-President, Isobar India.
Amaresh Godbole, Managing Director, DigitasLBi, said, “I think mobile commerce and payments are driving the behaviour of paying online. It's a little urban centric but it is getting adopted faster because of the forced digitisation. Advertising video on demand service (AVoDs) is getting people used to streaming, albeit free content. These facets are opening up people’s minds to pay for digital empowered deliveries, which in turn will drive people to pay for entertainment -- that is, online content.”
Godbole added, “The clampdown that has happened on torrent sites and improving IP protection policies will also drive it. Netflix, for instance, has already become an uber-cool status symbol among early adopters, who nudge the wider audience. Paid music apps are seeing adoption. In a year or two, one will see a big shift. As of today, it is still niche and with many players coming up, it will open up the category. The fact that people are now used to paying online and not having access to pirated content will converge to help with getting people to start paying for online content. These couple of years are a time of investment for the video on demand players and I think they will start seeing their rewards for those investments in a year or two.”