Hotstar Parent Gets $73.8 Mn To Up Its Game Against Netflix, Prime Video And Others

Digital and mobile entertainment platform Hotstar’s owner Novi Digital media has secured $73.8 Mn (INR 516 Cr) from Star US at a valuation of $265 Mn.

Novi is a wholly-owned subsidiary of Star India Pvt Ltd. The development was first reported by paper.vc.

The fund infusion aims to help the combat its increasing losses. Novi Digital saw its losses increase by nearly 20% in FY17 to $70 Mn (INR 489 Cr). At the same time, it recorded a 79% increase in revenues in FY17 leading to a sum of $45.7 Mn (INR 320 Cr).

Hotstar: Gaining Edge Over Netflix And Prime Video

Hotstar currently has about 7 lakh paid subscribers as of July. In comparison to its major competitors such as Netflix and Amazon Prime Video, the company has been able to up its game in the Indian market on basis of the large user following.

In India, so far, Amazon Prime Video has 11 Mn subscribers in stark contrast against Hotstar’s 75 Mn and Voot’s 22 Mn subscribers, while Netflix stands at 5 Mn only.

Here are a few points to examine Hotstar’s edge over other players:

• Hotstar is building a large user base with a freemium model and complementing it with a membership-based model.
• The company is capitalising on its strong growth — it saw 1 Mn downloads within six days of its launch in 2015
• boast a subscriber base of 350 Mn as of February 2018
• Also claims 100,000+ hours of TV content and movies across nine languages at present.

Apart from this, Hotstar is keen on partnerships and tie-ups with the leading brands.

Most recently, Flipkart created an alliance with Hotstar to launch a video advertising platform named Shopper Audience Network. This will allow brands to target consumers through personalised video advertisements on Hotstar.

Earlier, Airtel TV also entered into a strategic partnership with video streaming platform Hotstar.

Over The Top (OTT) Platforms: The Future Of Content Is Here

There are nearly 30 OTT companies running their operations in India, including YouTube, Spotify, Netflix, Amazon Prime, Hotstar, Voot, and Eros Now.  Shemaroo Entertainment Ltd also has plans to launch its own online streaming app in the next six-nine months.

Google is upholding its game with Youtube in the growing competitive video streaming space, while Jio is planning to launch an interactive cricket channel on its Jio TV application.

Next comes Sports Flashes which is operating as a one-stop online sports platform to cater to all the popular sports played in India.

If that’s not enough, Times Internet also recently acquired a majority stake in Gangnam (Seoul) based MX Player for about $200 Mn to launch its over-the-top (OTT) video service.

According to a joint study by Bain & Company, Google, and the Omidyar Network, by removing the existing barriers such as localisation as well as by instituting a better user experience, online platforms will be able to improve users’ trust in online commerce, thereby unlocking the potential $50 Bn online commerce business in near future.

Not only entertainment, but the OTT platforms are helping both the offline and online industries to take advantage of digital video advertising and reach out to a wider audience.

Here are few factual insights on the OTT market:

• The video streaming market has been pegged at $280 Bn in India
• According to a Frost & Sullivan’s report, India’s OTT video services market earned over $37 Bn in 2017.
• OTT video services market is expected to grow at a compound annual growth rate of 17.3% over the next five years.
• The country has 180.3 Mn active online video viewers and almost 4 Mn registered subscribers.
• India’s media and entertainment market is estimated to expand to more than $30 Bn by 2020 from $21.4 Bn (INR 1.5 Tn) in 2017, according to a report by Ernst & Young LLP in March.

The Indian video battle is getting intense is majorly being fought on the vernacular grounds. Earlier this year, reports surfaced that Amazon Prime Video is now looking to expand its film catalog to southern Indian languages like Tamil and Telugu.

Netflix CEO Reed Hastings also recently revealed that Netflix sees a potential of adding 100 Mn customers in India. In this direction, Netflix also announced three Indian original productions — Ghoul, Leila and Crocodile, in addition to the four productions already in the process which include Sacred Games, Selection Day, Again, and Bard of Blood.

Well, the opportunities may still be untapped in Indian video streaming space, gaining a foothold against players like Hotstar which are backed by paid subscribers is a tough task for the new breed of players in the space.