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News Analysis: Hollywood’s Indian Strategy — A Star in the Making

Move over, Bollywood. Legacy Hollywood is targeting the world’s second-largest population with low-cost streaming services and original content designed to be consumed on portable devices.

From the recent launch of Lionsgate Play from Starz, which also operates joint venture StarzPlay Arabia, to Disney+ Hotstar, Amazon Prime Video and Netflix, Hollywood is targeting India’s 1.1 billion portable media devices as fertile ground for multi-billion-dollar infrastructure/content investments.

From 2019 through 2020, the SVOD market grew from 23 million subscribers to 57 million subs — and is predicted to reach 200 million subs by 2025, according to Futuresource Consulting.

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The top six Indian SVOD providers, including Disney+ Hotstar, Prime Video and Netflix, all boast heavy financial backing, marketing budgets and strong content production capabilities. Overall, there are approximately 30 active SVOD providers competing for the national and regional market share. Part of this mix includes Bollywood, with many local studios also launching their own direct-to-consumer services.

“Consequently, pay-TV operators are ramping up efforts in diversifying their offerings,” said David Sidebottom, principal analyst at Futuresource. “However, the learning curve for those shifting from satellite broadcasting to IP is steep and requires notable investment.”

When Disney acquired 21st Century Fox assets, included in the $71 billion purchase was Hotstar, a streaming platform with an Ace card: Indian Premier League cricket. As a result, India represents 30% of the Disney+ platform’s 95 million subscribers — just 9.5 million less than the service’s U.S. sub base.

“We did see a bump up when the IPL season started,” Disney CFO Christine McCarthy said on the fiscal call. “But we’ve also made it economical for a consumer to sign up for a one-year subscription versus going month-to-month. So those are some of the things that we’re looking at and utilizing to mitigate the churn that one could expect from IPL, but it’s a more diversified offering in terms of programming than just cricket.”

Indeed, the just-launched Star streaming unit within Disney+ and featuring general entertainment is seen as key to the platform reaching 300 million subs globally within three years.

“While North American markets remain critical for most streaming players, it is emerging markets such as India that will drive the next wave of subscriber growth,” Aditya Raghunath, research analyst with T.A. Pai Management Institute, wrote on The Motley Fool.

Netflix in 2019 launched a lower-cost mobile-centric subscription service in India, three years after bowing standard service in the country. The service’s original series, “Delhi Crime,” recently won the International Emmy for Best Drama Series.

“We’ve been growing every year. We’ve been just building our team, developing content, figuring out what works, whether that’s ‘Sacred Games,’ or ‘AK vs. AK,’ you know, just lots of different types of content,” Hastings told Fortune IndiaIndeed, Netflix is targeting India for much of its next 100 million subscriber growth.

“If you play very safe, you’re not doing justice to your audiences who deserve new storytelling,” said Monika Shergill, VP of content for Netflix India.

Amazon, which of course eyes India for its e-commerce potential, also offers Prime Video as a standalone service priced from $1.79 per month. Subscribers have access to ad-free content in myriad languages Prime Video lets users stream ad-free content in HD and 4K (at no additional cost) across various languages. The service also offers access to Prime Music, Prime Reading, Prime Delivery and Amazon Pay Credit Card, among other services.

“The number of hours Prime Video is watched in India in the last two years has grown by six times,” Amazon founder/CEO Jeff Bezos told an Indian media event in 2019. “Prime Video is working well all over the world, and there is no place it is doing better than in India. It’s incredible.”

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