Amazon is aggressively pushing forward its over-the-top (OTT) business in India. Investing heavily in Amazon Prime Video, the content acquisition strategy has been to spread across genres.
In an interview with TelevisionPost.com’s Ashwin Pinto, Amazon Prime Video India director and country head Nitesh Kripalani talks about the company’s content plans and the growth of the OTT segment in India.
Excerpts:
Q. How will Amazon Prime Video scale up offerings?
We have just launched our comedy stand up specials. Going forward you will see a lot more latest shows and movies on the service. We have started doing TV advertising, OOH advertising. Customers are recognising that. The brand awareness is building which is good to see. There is a lot more coming up.
Giving something fresh and new is the goal in six languages. Our Amazon Originals will be launched sometime at the end of Q1 or in Q2.
Q. Movies is a content pillar and you have done exclusive deals. Going ahead what will we see?
All our deals are long-term like Dharma, Vishesh, Excel, Yashraj, T-Series. We have also done movie deals with Paramount, Warner, CBS, Lionsgate. We are really excited about changing how TV shows are made in India and originals are an important. We are excited about launching and building our originals brand. We look at customer feedback and what they are really interested in.
Q. When you did movie buying did you look at TV first?
Customers told us that the biggest problem in consuming video is that it needs to be the latest. There are so many different services in the marketplace and this is what they are looking for. Therefore, we get the latest movies for our customers. At the same time, we are not a monogamous country. We need different languages and we have done that with Tamil, Telugu, Marathi and Bengali.
‘In India, cricket has still a very large base. We are seeing football coming up. We are seeing kabaddi, wrestling up. Sports is a genre that we are looking at, along with other genres. We will keep evaluating those rights’
Q. Did you focus on picking up exclusive titles?
It is always a bit of a trade-off. Sometimes rights are available and sometimes they are not. Rights are what they are. Everything is a commercial negotiation and some producers already have deals in place.
Q. In terms of investments, do movies consume more if you grade?
We are investing across genres. It depends on the size of the genre. We know that writers for shows are a challenge and that is something that we are really focused on. We know that making a movie takes 9–12 months. Investments depend on the relative size of a genre. Investments depend on customer demand and what they want to see. It is not about how much money it is going to take.
Q. What has the customer response been so far?
We offer a 30-day free trial and are encouraged by the response of conversion to pay. We have finished our first month and we have seen a 2x lift of in terms of customers converting to pay. We launched Prime in July and Video in December, and we are seeing customers who were in the free trial phase converting 2x more.
Q. Was the price of Rs 499 arrived at because the price of TV subscription is low in the country compared to other markets like the US?
There are many factors that go into the pricing of a service. It is not just cable subscription pricing. It is a bucket of things that you need to think about like the other costs that customers will incur as well. We believe that this is the right price for India and we are seeing it from our conversion as well.
Q. Is the aim of Amazon Prime Video to be profitable or is it a marketing tool to push e-commerce?
Amazon Prime Video is a standalone business. It has its own P/L. Our goal is to get customers and have them engage across the different offerings that we have. The goal is to engage customers and have them be valuable over the long term. All our businesses aim for profitability. Over the past few quarters, we have delivered profitability across Amazon as a whole.‘We are seeing customers willing to pay for kids content that is ad free and of a higher quality. Video consumption is really growing’
Q. What do consumers expect from OTT from research done prior to launch?
What they are telling us is that they are not getting access to new movies, latest stuff. That is why they pirate TV shows and go to torrent sites. They complain that their data charges are very high and playback is not very good, the bandwidth is low. We saw that the prices according to customers are too high and the value is not enough. They don’t want to watch poor-quality videos.
These are issues that we have solved. We use a selection of content that is great compared to any other service that customers are using today. Video will playback in 2G, 3G or 4G. It will work whether it is on your phone or tablet.
Q. When you look at other markets, is there any learning from there that you can apply for India?
Absolutely! Before December, we were only in five countries and got a lot of learning from the US, UK, Germany, Austria and Japan. The most common thing is that consumers want a great selection of content, convenient access and value.
Q. From the outset, local original content has been important for you. Is this going to be the key for OTT players to survive?
Giving content that customers want is critical whether it is local or international. In our view, we have a massive media and entertainment fraternity in India. We want to showcase what customers want and it includes US movies and TV shows. It is a combination of two things. The customer wants to see his/her local creators. S/he wants to see local stars, the comedians that we have just signed up with. They want to also sample US content. So, you need to have offerings from across the board. It is not about one single piece of content.
Q. When you tie up with a local content creator what is the criteria?
We look at the demand for that creator’s content in India. We see what customer metrics we have that will drive the demand. We look at the rights that are available so that it is latest and exclusive. We also look at content quality to make sure that it is a brand that the customers will like.
There are many drivers that go into it. The primary driver is to understand whether there is demand for the content and whether the customer really wants it.
Q. What is driving the focus of OTT service providers on kids content?
We are a young country. Sixty per cent of the population is below the age of 35. We are all young parents. We are seeing customers willing to pay for kids content that is ad free and of a higher quality. Video consumption is really growing. I would say that India is a young country, and as young parents we want to protect our children who view content from unnecessary advertising. That is why Amazon offers parental controls. It is completely ad free. We have the best of both and international content on one service.
Q. Could you talk about the deal for ‘Chotta Bheem’?
It is a super popular show with a huge amount of viewership. Customers want to watch it on demand. We are seeing that a lot of kids content gets viewed in the morning, maybe when the kids are getting ready to go to school.
Some of the future episodes will be available exclusively on our service in terms of streaming. But if you have great content, customers will want it as every single parent wants to give the message to their children. On the movies front, we are happy about our partnership with Green Gold. They have a lot of ambition.
Q. Could you talk about your interest in the IPL?
We keep evaluating all genres. Comedy is a big one. We have just launched a whole bunch of documentary and lifestyle shows on the service. Sports is super interesting, but we don’t want to comment on rumours that you may have heard.
Q. In sports are you looking first at cricket?
In India, cricket has still a very large base. We are seeing football coming up. We are seeing kabaddi, wrestling up. It is a multi-sport environment, and sports is a genre that we are looking at along with other genres. We will keep evaluating those rights.
Q. What is your view on the digital ad market?
The digital advertising market is growing. I think that it is about 30–34% according to many reports. It is a great thing for the market overall and financially it is the future. We are investing significantly based on the fact that customers across towns and not only in metros buy and sell services on Amazon.in.
We are growing as a service. We are seeing wide consumption across multiple genres. We are very excited that we have the stand-up specials and we hope to do a lot more every single month.