Content is set to be king as Indian streaming platforms take on Netflix, Disney

Bloomberg Mumbai | Updated on February 20, 2020

From providing local content to reducing prices, global streaming services are looking to increase their base in India

As global streaming giants Netflix Inc and Walt Disney Co spend millions of dollars to grab viewers in India, a country that could become their biggest overseas market, a homegrown rival is preparing to defend its turf.

Zee5, the top domestic streaming platform set up by India’s biggest television broadcaster, is betting on local content to fend off big-spending rivals, Chief Executive Officer Tarun Katial said in an interview. The over-the-top, or OTT, service is playing to its advantage by adding more local-language shows and lower-price options to gain market share, he said.

New battleground

“International OTTs have neither legacy nor library with depth,” Katial said at his office in Mumbai, adding that Zee5 has produced more than 100 original shows in local languages, at least 10 times more than any rival. “We can win this content battle.”

Zee5, which started in 2018, is among dozens of streaming platforms, including, locked in a race for Indian users, a market that Boston Consulting Group estimates will reach about $5 billion in 2023.

With China closed to foreign streaming services, India has become a battleground for global streaming brands, with an emphasis on delivering films and TV shows to smartphone users expected to number 850 million in two years.

After amassing 61 million active monthly users in its first 15 months in India, Katial says Zee5 has little choice but to keep producing new shows at even faster rates. The platform aims to add between 70 and 80 original shows over the coming year, while making 15 direct-to-digital movies for release in 2021.

Representatives for Netflix and Disney’s Hotstar platform in India declined to comment.

Focus on local content

There are 22 official languages in India, creating a broad battlefield for niche audiences.

“It’s a strategy to move away from fighting in the fiercely competitive segment of Hindi or English,” Bhupendra Tiwary, an analyst at ICICIdirect, said of Zee5s local-content push. “Zee is creating its own space in this war zone where it sees more opportunity.”

Zee Entertainment Enterprises Ltd., part of the Subhash Chandra-led Essel Group, is increasing its investment in streaming, even though the broadcaster has seen its market value plunge on concern the groups debt had grown too large.

Chandra, who opened India’s first amusement park and brought satellite television to the country, has had to sell his stake in Zee, while staying on as a board member.

“We are completely insulated from the financial concern which our parent group went through last year,” Katial said. He declined to say how much the company was planning to spend on growth.

Zee5, the streaming platform, is planning its local-language expansion just as some of its global rivals are pushing further into India.

Disney earlier this month said it will introduce its Disney+ streaming service in India through its Hotstar platform on March 29, at the beginning of the Indian Premier League cricket season. Hotstar, which has said it has 300 million active monthly users, has relied on cricket to draw users after spending big to secure the rights. It is also re-branding the Hotstar VIP and Premium subscription tiers to Disney+ Hotstar to underline its global brand.

Netflix, the world’s largest streaming platform by paid subscribers, has said it intends to sign on 100 million subscribers in India, almost 25 times the customer base it has in India as of this year. Chief Executive Officer Reed Hastings said during a visit to the country in December that Netflix intends to spend 30 billion rupees ($419 million) over 2019 and 2020 to produce more local content.

Netflix’s Sacred Games series, a local original, has drawn Indian viewers globally, the company has said. Lust Stories, a Hindi-language anthology of short films, released in June 2018, also drew attention.

Zee5 has said its original Rangbaaz Phirse and The Final Call series are hits, along with Auto Shankar, a Tamil-language show.

Price war

At the same time, competitors are paring fees to draw subscribers in a country used to free services like YouTube, while paying little for bandwidth via mobile phone plans.

Last year, Netflix slashed prices by as much as half in India for subscribers that commit to at least three months. Other streaming services, including Apple TV+, Amazon Prime and Disney’s Hotstar have also offered discount deals this year and subscriptions at prices well below those in other markets.

“Zee5 has begun offering some region-specific packages at ₹49 a month or ₹499 a year to attract more viewers,” said Katial. “That compares with the standard packages at ₹99 a month or 999 rupees a year.”

Published on February 20, 2020

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