Walmart-owned Indian e-commerce player Flipkart, is taking a direct attack on its mega rival retailer Amazon India, especially at the latter’s video streamer Amazon Prime Video, by launching its own free Over The Top (OTT) video streaming services in September 2019.
Flipkart looks to triple its current user base now at about 100 million. Amazon Prime was launched in December 2016 in India and is estimated to have 13 million users, out of which half got on-board for its Prime Video.
The main differences between Flipkart and Amazon’s streaming offerings are, Flipkart will aggregate contents from various producers, while Amazon Prime is a paid subscription with largely original and localized content.
Flipkart’s revenue generation for now will be only from advertisements and it will source content from international and domestic production houses like 21st Century Fox, Walt Disney, and Balaji Telefilms. Flipkart will also not launch a separate app for its streaming services.
The company is eyeing a shift from indulging purely in e-commerce to fend off competition from competitors, by taking cues from them.
A company spokesperson said that, “We believe that our customers shouldn’t pay extra for premium content and hence our offering is different from anything else that is currently available.”
However, Flipkart will not have it easy with many established international and local rival OTT players already in the market. It has to firstly contend with the big three: Amazon Prime, Netflix and Hotstar and leading local Indian services like ZEE5, MX Player, VOOT, Eros Now and ALTBalaji.
According to a 2019 report by global accounting firm PricewaterhouseCoopers (PwC), “India is the fastest-growing media and entertainment (M&E) market globally and OTT will record the highest growth rate among all M&E segments in the country. India’s video streaming industry is all set to reach a market size of USD 823 million with a compounded annual growth rate (CAGR) of 22.6% by 2022.”
The lucrative OTT space in India now has 34 players all trying to get more eyeballs to view their channels by streaming original localized Indian content. The opportunity to grow is huge as only 50 million of India’s 500 million Internet users have ever transacted online. The idea is also to tap the rural market as seen by Amazon Prime’s reach across 4,000 towns and cities in India and, Netflix’s market disruption of launching a monthly Rs. 199, or USD 2.8, subscription plan exclusively for smartphones and tablets. Media reports also speak of payments company Paytm intending to launch its own video streaming service.