JioCinema Likely to Focus on Pricing, Local Content as It Challenges Disney, Netflix in India

The video streaming business of Mukesh Ambani, Asia's richest person, is likely to focus on pricing and local content following a deal with Warner Bros as it seeks to challenge the likes of Disney and Netflix, industry sources said. Under the content deal announced on Thursday, popular series from HBO and Warner Bros, such as Harry Potter and Succession, will be available from next month on the JioCinema platform, which Ambani's Viacom18 has promoted for weeks by offering popular IPL cricket matches for free.

A pricing strategy for JioCinema is still under discussion internally, an industry source said, but Ambani has a reputation of disrupting rivals in the price-sensitive Indian market with cheap offers. In 2016, he offered mobile data for free, making his Jio telecom service India's top player. He is adopting a similar strategy to promote his consumer goods to rival Coca-Cola and Nestle.

Viacom18, the broadcast division of Ambani's Reliance Industries, didn't immediately respond to a request for comment. Its shareholders also include Paramount Global as well as Bodhi Tree, a joint venture between James Murdoch and former top Disney executive, Uday Shankar. The Warner deal, industry executives and media analysts said, will boost Viacom18's already announced plans to 'innovate and disrupt' the sector, and help to attract the premium English speaking audience in India.

At stake is a slice of a video streaming market that is expected to grow annually by 22-25 percent to reach $13-$15 billion (in the vicinity of Rs. 1,20,000 crore) by 2030, according to a 2021 report by Indian lobby group CII and the Boston Consulting Group. That compares with projected annual growth of 8.63 percent in the US market, which is expected to hit $54.66 billion (around Rs. 4,50,000 crore) by 2027, according to Statista.

While Netflix and other rivals boast of content specially created for the India audience, JioCinema's current free offerings largely include old Hindi and local language movies. In sports, it has IPL cricket streaming rights until 2027 and in March bagged exclusive rights for MotoGP in India. The big challenge is the lack of fresh local and global content on JioCinema, something that will be become even more critical as the IPL season ends next month.

JioCinema is in talks with various production studios and has plans to introduce dozens of TV shows and movies on the platform in the coming months, in Hindi and other languages, a second industry source told Reuters on Friday. "There are many Indias within India. While IPL is for the masses, partnership with Warner is a precursor to JioCinema's entry into the premium subscription segment," said Mihir Shah, vice president at Media Partners Asia.

Nitesh Kripalani, former country head of Amazon's Prime Video in India, said he expects Reliance's venture to do more such deals, but pricing remains key. "India is a value conscious market. For any media business, anywhere in the world - you need to get consumers to pay. Advertising can only pay so much," he said. Netflix, Amazon and Disney Hotstar have become popular in India by launching exclusive movies and web series starring Bollywood actors. They have also diversified into regional local language content.

At present Netflix — which has most the expensive subscription plans — has just 8 million subscribers, Amazon has 17 million, while Disney+ Hotstar, which earlier had the digital rights for IPL, leads with 49 million, according to Media Partners, which doesn't have data for JioCinema's free service. Karan Taurani, vice president of India's Elara Capital, sad JioCinema's success will hinge on quality of its content. "They may make so many films and series but (what if) more than 70-80 percent of them bomb? The only way to scale up is to really differentiate your content and make sure execution is right," he said.

© Thomson Reuters 2023