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Netflix vs Amazon Video turf wars heat up

By Viveat Susan Pinto
May 30, 2017 09:15 IST
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Netflix plans local studio in India push. Move comes as rival Amazon Prime Video lines up as many as 18 original shows for India.
 
A cinema goer takes a picture as others watch Bollywood movie Dilwale Dulhania Le Jayeng. Photo: Danish Siddiqui/Reuters

IMAGE: Netflix and Amazon Video will have to do plenty to sustain viewer interest in a competitive market like India. Photograph: Danish Siddiqui/Reuters.

Netflix, the world’s leading video-on-demand service, proposes to set up a production facility in India, the company’s management said in a recent analysts’ call, as the pressure to localise content grows in a market that has enormous potential for the VOD business.
 
Speaking to investors, Netflix's chief content officer Ted Sarandos said, “We are already building our production capabilities outside the United States. Today, we are filming local shows in 13 different countries, including India and Japan. We think, it is going to be a combination of big global interest in original programming, complemented with a growing number of local-language original series in each country.”
 
Members of a brass band watch a movie on a mobile phone as they wait to perform at a wedding procession in New Delhi December 1, 2012. Photo: Mansi Thapliyal/Reuters

IMAGE: India has a huuuuuge movie appetite. With this in mind Amazon.com has already lined up as many as 18 original shows for Amazon Prime Video in India to make a splash in the Indian market. The investment in these original shows, the largest outside the US, is billed at Rs 500 crores. Photograph: Mansi Thapliyal/Reuters.

During his maiden visit to India in March, Netflix CEO Reed Hastings spent time meeting media and entertainment chief executives here, besides catching up with Bollywood celebrities, to understand the content requirements of the domestic market.
 
Some tie-ups were announced such as the one with Shah Rukh Khan’s Red Chillies Entertainment, where the movie star’s films would be exclusive to Netflix for the next three years. Beside, an English-and-Hindi-language adaptation of author Vikram Chandra’s book Sacred Games, Netflix’s first original series in the country, is being produced in partnership with Anurag Kashyap’s Phantom Films.
 
But, sector experts say with rival Amazon Prime Video upping the ante in India in terms of local productions, Netflix will have to do more if it has to sustain viewer interest in a competitive market. The Jeff-Bezos-led Amazon.com has already lined up as many as 18 original shows for Amazon Prime Video in India -- all of which have hit the floor and are in various stages of production.
 
DATE IMPORTED: October 13, 2011 Migrant workers watch movie on a mobile phone in their one room dwelling in a residential area in Mumbai October 3, 2011. Photo: Danish Siddiqui/Reuters

IMAGE: Both Netflix and Amazon are spending hand over fist to make an impact in the movie crazy Indian market. While Amazon spent $3 billion (or Rs 19,500 crore) in content production in 2016, Netflix’s spending was $6 billion (or Rs 39,000 crore) for the same period. Photograph: Danish Siddiqui/Reuters.

The investment on these original shows, the largest outside the US, is billed at Rs 500 crores, a quarter of the Rs 2,000-crore budget Amazon has set aside for its Prime Video service in the country, launched in December 2016.
 
In an earnings concall last month, Amazon CFO Brian Olsavsky said India was an important investment area for the company and that it saw significant potential for its business in the country.
 
While Amazon spent $3 billion (or Rs 19,500 crore) in content production in 2016, Netflix’s spending was $6 billion (or Rs 39,000 crore) for the same period. But, much of this was in countries such as the US, which is the world’s largest VOD market at $25 billion (or Rs 1.62 lakh crore). The global VOD market is pegged at $50 billion (or Rs 3.25 lakh crore) in size.
 
Reed Hastings, co-founder and CEO of Netflix, and Ted Sarandos, Netflix chief content officer, pose for photographs during a news conference in Seoul, South Korea, June 30, 2016. Photo: Kim Hong-Ji/Reuters

IMAGE: During his maiden visit to India in March, Netflix CEO Reed Hastings, seen here with Netflix's chief content officer Ted Sarandos, spent time meeting media and entertainment chief executives, besides catching up with Bollywood celebrities, to understand the content requirements of the domestic market. Photograph: Kim Hong-Ji/Reuters.

Though Amazon and Netflix have not indicated their overall content budgets for 2017, analysts estimate it will be double the amount spent by the two last year, as their attention shifts to international markets, where both have aggressively expanded in recent years.
 
At the above-mentioned analysts call, Netflix CEO Hastings said about Amazon: “We do think about all of that (Amazon’s work) and their tremendous track record. On the other hand, they are doing great programming and they will continue to do that. But, the market is vast.”

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Viveat Susan Pinto
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