Amazon Prepares to Bring More Pain to Netflix in This Critical Market

Amazon could gain a significant advantage over Netflix thanks to this smart content acquisition effort.

Netflix (NASDAQ:NFLX) has been making promising moves to carve out a bigger share of the video streaming market in India, but recent developments at Amazon‘s (NASDAQ:AMZN) Prime Video service could prove to be a new challenge.

The streaming specialist has been trying to woo more subscribers in India by trying to improve its value proposition through price reductions, free episodes, and free one-month upgrades for new users. Netflix needs to make such moves too, as it is pricier compared to other video streaming services in India — but they might not be enough, as Amazon is now bolstering its content library with India-specific movies.

Indian movies could give Amazon an advantage

The novel coronavirus pandemic has forced India’s movie industry to postpone new releases as theaters have remained shuttered for over two months to contain the spread of COVID-19. There is no clarity about when movie theaters in India will open again just yet as the country remains in lockdown. As a result, a few movie producers are now releasing their movies over video streaming platforms.

Amazon’s Prime Video service is benefiting from this trend in India. The platform will be exclusively streaming seven Indian movies globally beginning with a Hindi-language movie featuring the country’s most popular actor, Amitabh Bachchan. There seem to be no such developments at Netflix yet, and that could be bad news for the streaming giant in a market where it aims to hit 100 million subscribers in the long run.

Local movies on Amazon Prime can help the platform acquire more subscribers for a few simple reasons. Last year, Indian theaters debuted more than 2,200 movies for the theater-going public in that country, an enthusiastic base that hasn’t been able to go to the theater for close to three months now thanks to COVID-19. Amazon is now giving Indian movie buffs another reason to sign up by directly releasing movies on its streaming platform.

Now Netflix has already proven that India-centric movies tend to do well on video streaming platforms. Extraction — a Netflix original movie with an India-specific theme — turned out to be a record-breaking title, as more than 90 million households were expected to watch it in the first four weeks of release.

Amazon will now be aiming to achieve similar success by securing the rights to a slate of Indian movies in different languages, including Tamil and Telugu, that saw a massive spike in ticket bookings last year. A third-party report reveals that Telugu movie bookings jumped 116% in India last year, while Tamil bookings shot up 78%.

So Amazon seems to be making the right moves on the content front to corner more subscribers in India, and this could play in the company’s favor considering Prime Video’s affordable subscription rates.

Netflix’s premium pricing could pose a challenge once again

Though Netflix has been trying to offer Indian consumers more value for money over the past year, it continues to remain quite expensive when compared to the likes of Amazon’s Prime Video. Netflix’s mobile-only plan in India costs 199 rupees a month (roughly $2.65). And there are several limitations with this plan, such as the lack of high-definition content and a restriction to just one smartphone or tablet.