Is Flipkart Looking To Copy Amazon Prime With Its Own Video Streaming Service?

Walmart-owned ecommerce company Flipkart is ready to further expand its horizons with plans to launch Over The Top (OTT) video streaming services.

A Moneycontrol report said that Flipkart will launch free video streaming before Diwali, for its ‘Plus’ premium subscribers. The Plus premium is a subscription model by Flipkart which offers faster shipping and exclusive deals.

The report further added that Flipkart is betting on Bollywood, and it will serve entertainment to Plus users free of cost. The sources quoted said that adding video on Flipkart will create a lot of stickiness. They further said that Flipkart already has about 5-6 Mn Plus members who enjoy the benefits of special deals and faster delivery.

It is notable that unlike its direct challenger Amazon Prime, Flipkart will not have original content. The company will aggregate content from content producers. Therefore, it would be important for Flipkart to get as many exclusive streaming rights as possible.

In a statement to Inc42, a Flipkart spokesperson explained that “Flipkart understands Indian customers better and in a much more nuanced way than others.” Therefore, the company is introducing “Flipkart Videos”, a curated range of movies, shows and entertainment series for all its consumers. “Our video content offering is focused on three primary aspects, keeping in mind our understanding of the market: free, curated and personalised. 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,” the spokesperson added.

This is not the first time that Flipkart’s interest in OTT has come to light. In September 2018, reports surfaced that Flipkart has held talks to buy a stake in Star India’s video-streaming service Hotstar to make a foray into the OTT space and to attract more Internet consumers as well as shoppers. However, the talks have not reached an advanced stage and the deal may or may not materialise.

At the time, reports further highlighted that in the past six months, Flipkart has also held discussions with other large streaming services. This includes preliminary talks with Netflix for a potential alliance; however, no deal was struck reached at the time.

In India video streaming is poised to become a market worth $5 Bn by 2023.

However, Flipkart’s entry won’t be an easy one. Even though the company has a strong user base in the country, its competitors have been increasingly betting on original content to drive their next phase of growth. But if Flipkart only offers existing content, users may not have much motivation to use Flipkart video services.

This, especially when, 74% of the OTT entertainment app users have more than one app installed on their Smartphones. TechArc report noted that this is challenging for the industry as their advertising revenue potential goes down by not owning a higher number of unique users. This is because of similar app available across all major platforms, including in VoD category.

Further, 80% of the smartphone users use at least one OTT platform. Disney owned content streaming platform Hotstar has been downloaded by 49% of smartphone users. The report noted that one of the main factors for Hotstar’s growth has been its sports, especially cricket content, be it IPL or now the World Cup Championship.