Star India and Star US Holdings have infused INR 1,066 Cr ($153 Mn) into their wholly owned Nova Digital media which operates Hotstar, the OTT video streaming platform that millions of Indian’s currently flock to watch cricket and which is also upping its original content game.
Star India has invested INR 832 Cr and the balance came from Star US Holdings, according to a recent company filing accessed by Inc42. The development was first reported by data intelligence platform paper.vc.
This is the second big investment routed by Star India in Hotstar after INR 516 Cr infusion done in August 2018 at $265 Mn valuation.
Hotstar is one of India’s premium streaming platform with more than 100K hours of shows and movies in 18 languages, and coverage of prime global sporting events. Launched in early 2015, it claims to have more than 350 Mn downloads and over 150 Mn monthly active users.
Netflix, Amazon Prime Emerging As Arch Rivals
The company is upping its game against rivals like Amazon Prime and Netflix, which are currently dominating the consumer segment in India. The company also faces competition from Voot, Zee5, Arre, SonyLIV, ALT Balaji, EROS Now and YouTube Originals among others.
Related Article: Hotstar Launches New Subscription Service, Hotstar VIP
According to the latest report by market research company Velocity MR, more than 70% of respondents claimed to watch Amazon Prime regularly at least once a week, followed by Netflix with 56% and Hotstar with 50%.
Amazon Prime is lucrative to the price sensitive Indian audience because it lets users become Amazon Prime members who get free, faster and cheaper delivery of good and also access to its video service. On the other hand, Netflix is banking on its original content, despite being priced a bit on the higher side.
Hotstar: Looks To Leverage India’s Cricket Fans
In order to combat with its arch rivals, Hotstar is looking to leverage India’s cricket fans as well as bringing original content on its platform.
As a global first, Hotstar is offering ad targeting for 24 different cohorts during upcoming VIVO IPL. Additionally, through contextual branded cards showcasing offers, mini-games, and polls, brands have been provided with a unique opportunity to engage viewers at scale during a live game.
Furthermore, with the intent to take this experience deeper and wider into India, the matches will be streamed across 8 languages, targeting an unprecedented reach of 300 mn viewers.
“In India, cricket is a very intrinsic part of our fabric and IPL over the years has become one of the largest sporting events globally. Last season alone, an astounding 202 Mn viewers watched VIVO IPL on Hotstar, and we expect this number to grow tremendously this year,” said Varun Narang, chief product officer of Hotstar in a statement to the media recently.
Also, Hotstar has announced the launch of its original content series, ‘Hotstar Specials’, which will feature an extensive variety of Indian stories, mounted on a big scale, unconstrained by format. The company has earmarked $16.9 Mn (INR 120 Cr) for original content.
OTT Sector: The Ongoing Battles
Poised to be a market worth $5 Bn by 2023, the Indian OTT segment is embroiled in an ongoing debate around the regulation of the OTT segment with ongoing discussions between TRAI, internet lobbies and associations such as the Internet and Mobile Association of India (IAMAI), the Broadband India Forum, and the Asia Internet Coalition.
However, in another development, with effect from Feb 1, 2019, the consumers of DTH and cable channels will need to pay a network capacity fee (NCF) of INR 130 and 18% GST atop for up to 100 channels. Further, users opting for more than 100 channels, the NCF will be priced at INR 20 for extra 25 channels.
This new framework of the Telecom Regulatory Authority of India (TRAI) may have slightly turned the waves in favour of OTT sector from the consumer purview.