India's growing uptake of 4G mobile services will be key to the success of Amazon and Netflix as they target the market as their next big push. After finding a launch in China difficult, streaming giants Netflix and Amazon are shifting their focus to India, the next most populous country in the world. To succeed, they will have to overcome two major obstacles: a low broadband penetration, and access to online payments. Only around one in three Indians have a means to pay for their service via credit or debit card. New operator Reliance Jio's 4G push could be a particular ally to the SVoD services' roll out because its network will bridge gaps in India's uptake of high-speed internet. While 4G devices have been available in India since Airtel launched its pilot network in 2011, no real spikes in 4G subscriptions were seen until September 2016, when disruptive mobile operator Reliance Jio launched. Jio offers completely free access to its 4G services and caused a large spike in 4G subscriptions, recently surpassing 100m users.
One fly in the ointment is that Jio intends to begin charging for access to its services this April, which could lead to a drop in user base, even with promises of preferential pricing. Nevertheless, the Jio experiment has proved that Indian consumers are hungry for fast mobile data and, if its planned pricing model proves successful, could vault Jio to a significant market share in its first year of operation. The group has already reached 10% market share of mobile subscriptions in just six months. Competitors have taken notice, and Bharti Airtel, which today completed a national roll-out of 4G services across India, launched an offer for its postpaid customers to receive 30GB of free data. Vodafone, meanwhile, temporarily offered a 1GB-a-day package at a competitive price, while select Idea Cellular customers can get 500MB of data at a similar price-point.
Netflix is also taking steps to solve the issue of payment. It has partnering
with Vodafone for operator billing, enabling its customers to pay for Netflix through their mobile provider. Netflix is also securing a prime
presence in front of many existing pay TV subscribers as it will come
integrated on Videocon d2h and Airtel’s set-top boxes. In addition to plans to create localised content, Netflix has also partnered with Bollywood actor Shah Rukh Khan's Red Chillies Entertainment, giving Indian subscribers access to a portfolio of his films.
Amazon has taken a different approach, focusing on a competitive price point of INR499 (£6) a year including free delivery through its retail site. After an initial promotional period, this will double to INR999. By comparison Netflix currently charges INR500 a month. Amazon has also focused on content with a reported plan to invest $300m in original Indian content and a partnership with Lionsgate for content exclusivity in India.
Even if the internet speed situation in India does not improve, Amazon and Netflix both offer offline viewing which can combat slower internet connections; viewers can use a fast internet connection when available, or download content and then view later. The battle for India’s video streaming market has begun.