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Temasek-backed video streaming service Viu quits India market

There are about 50 online video platforms in India, making it a hyper-competitive market.

Photo by Jens Kreuter on Unsplash

Hong Kong-based information and communication tech giant PCCW Media’s video streaming service Viu has terminated its India operations, succumbing to the cut-throat competition in the country’s USD 500-million-plus video-on-demand market projected to touch USD 5 billion by 2023.

Launched in late 2015, Viu is present in over 15 markets across Asia, the Middle East, and Africa, with almost 31 million monthly active users. Its primary focus has been the Southeast Asia market—Indonesia and Thailand being two of its fastest-growing markets by revenue.

It launched its India operations more than three years ago, at about the same time when US-based video streaming giant Netflix entered the country. While competing with global media big-wigs like Netflix and Amazon Prime Video, it experimented with original and local-language content but failed to gain traction because of the limited content.

Over the last few years, Viu saw a slew of top-level exits from its India team. In December 2018, Viu India’s CMO Shantanu Gangane left the company, followed by content head Bimal Unnikrishnan in January; vice-president business development Sameer Gogate left in June, and lastly its CFO Apurva Desai also put in his papers, with Monday being his last working day at Viu.

Arun Prakash, chief strategy officer of Viu, on Monday told the employees in its Mumbai office that the company has decided to fold India operations, local media Economic Times reported. The company reportedly told employees that they would be given the three-month severance package and that they need not come to the office anymore.

One of the employees who anonymously spoke to ET, said, “We were told that in the current scheme of things, India requires heavy investments, to the tune of hundreds of millions, which the company doesn’t have. Arun also said that we would rather invest in other Asian countries where we are among top 5, rather than in India, where we are at 13-14th place.”

Netflix and Amazon are spending USD 5 to 10 million on one show in India, while Viu had a total content budget of USD 15 million and a marketing budget of USD 8 million, the report said citing an employee.

Earlier this month, Netflix’s chief executive Reed Hastings announced to invest about USD 423 million on content in India. In April, the company had said 15 new original Indian films would be produced by the end of 2020.

Amazon has an approximate budget of USD 6 billion for content globally, and India, being one of its largest potential markets, is likely to share a fair cut of that. Meanwhile, Disney, which owns and runs video-on-demand service Hotstar in India, is believed to have an annual budget of over 12 billion, according to a December 2018 report by Boston Consulting Group (BCG). A recent KPMG report said Hotstar has spent about USD 17 million on producing seven original shows this year.

India’s appetite for digital videos is increasing rapidly. According to another recent BCG report, in the country of 1.3 billion people, video consumption per capita has more than doubled over the past two years from 11 minutes per day to 24 minutes a day. The Indian SVOD (Short Video-On-Demand) market is expected to touch USD 1.5 billion by 2023 from USD 0.1 billion in 2018, the BCG report said.

Tapping the potential opportunity, there are about 50 online video platforms, making India a hyper-competitive market. However, online video revenue monetization remains concentrated among the top four platforms, Mihir Shah, vice president, India at the consulting firm Media Partners Asia told KrASIA in an earlier interview.

“In 2019, our analysis indicates that YouTube, Hotstar, Netflix, and Amazon Prime Video will have an aggregate 80% share of total online video sector revenues, which will reach USD 1.2 billion,” Shah said.

While India is going through an economic slowdown and GDP has fallen to a point that was last seen two decades ago, Indians are still willing to pay for on-demand video, the recent BCG report stated. Little surprise then, that global giants are diving deeper in India’s video streaming market, pouring money in content and devising strategies such as limited free streaming and mobile-only subscriptions.

Viu’s shut down might be a good learning moment for other video streaming companies. If the lesser-known video-on-demand services such as America’s Viki and Tubi, Chinese video-streaming platform iQiyi, and Singapore-based HOOQ don’t want to end up like Viu, they will have to open up their war-chest to produce more original and vernacular content to woo Indian viewers.