Apple’s bid to win a bigger share of India’s entertainment market with its latest video-streaming offering will hinge more on content than its cut-rate price.
The iPhone maker will need to quickly strike local content partnerships for its Apple TV to take on established rivals Hotstar, Amazon Prime, and Netflix. The U.S. company on Tuesday launched its Apple TV+ package at USD 5 a month globally and at Rs 99 (USD 1.4) a month in India.
Apple’s entry into India’s video-streaming market comes at a time when viewing habits are changing, especially among younger Indians. Cheaper smartphones and easy access to high-speed internet meant more Indians, especially younger ones, are watching entertainment digitally. According to KPMG, India will have more than 500 million video subscribers by March 2023, up from 300 million at the end of December, making it the biggest market in the world after China.
In India, Apple will have to jostle for space with nearly 30 players including Walt Disney-backed Hotstar, which launched its service in the country in 2015, almost a year ahead of Netflix, and remains one of the most popular with its hugely successful HBO series “Game of Thrones.”
“Apple’s pricing is aggressive. But it remains to be seen what kind of content they are going to deliver,” said Tarun Pathak, an associate director at Counterpoint Research. “I may be a subscriber of Prime or Netflix. But my interest in a platform will depend on how fresh the content is, and not necessarily how much I pay for it.”
In July, Netflix, which runs popular shows such as “Sacred Games,” and “Leila,” rolled out its mobile-only plan for India at Rs 199 (USD 3) a month. Its regular monthly plans are priced between Rs 500 (USD 7) and Rs 800 (USD 11). In contrast, Amazon charges Rs 999 (USD 14) a year for its Prime membership, a customer loyalty plan that also offers faster deliveries for its e-commerce services.
Over the last couple of years, top players have already committed millions of dollars in investments to differentiate themselves and build a library of original content. Earlier this year, Netflix said it will come out with nine original series this year and eight Indian original feature films.
Rival Amazon already announced plans to double its original content offerings on Prime Video for India this year with at least seven shows scheduled for launch.
According to Counterpoint’s Pathak, Apple should strike partnerships with local production houses to build its own library of exclusive content. “It requires years of experience and millions of dollars of investments to build that.”
In the past, Apple has been unwilling to let go of absolute control on its devices, as was the case with its iconic iPhones, wherein the company was reluctant to share its margins with local distributors.
Its premium pricing remained a major barrier to iPhone sales in India. In the quarter ended in June, Apple barely held 1% of phones shipped to India, compared with 28% for market leader Xiaomi.
Once the company builds a reasonable installed base in India, its focus will have to shift to regional content, Pathak said. Nine out of 10 internet users in India are likely to be Indian language users. Hence it is vital for streaming services to cater to the native language users, KPMG said in a report earlier this month.
This article first appeared on Nikkei Asian Review.