Amazon India to increase investments in OTT space, push Prime into tier-II markets

Driven by growth in its subscription model, primarily in the Tier-II markets of the country, US e-commerce giant Amazon India is eyeing increased investments in the OTT space — across webseries, exclusive productions and regional content.

It is also ramping up presence in the music streaming segment, under Amazon Music, through focused offerings like podcasts in popular categories like sports; and private music album launches by independent artists.

Subscription model
‘Prime’ is Amazon India’s subscription model which allows value-adds and benefits to users like free deliveries on purchases, faster delivery of orders (which include within one day delivery), among others. The subscription model also allows users to access video, webseries and movies across its Amazon Prime Video platform apart from access to Amazon Music. Prime subscriptions are available in monthly, quarterly and annual packages.

Unlike the US, where Prime subscriptions are mostly for faster deliveries and early access to deals, in India, the OTT platform – Amazon Prime Video – and other value adds like music streaming are seen as the prime divers.

According to Subbu Palaniappan, Director – Prime, Amazon India, the e-commerce giant is focusing on regional content across its platform which will also be included under the Amazon Originals (the webseries segment). Despite having a strong pipeline of content, plans were delayed as post production work was hit due to the second wave of Covid-induced lockdowns and restrictions.

“We plan to invest more in the Originals. Our belief is also that we are trying to serve different States (in India) where requirements (language and content preference) are very different from one another. Our goal, even before the pandemic, was to offer regional content. A lot of production work had slowed down during the second wave. We have a good pipeline of originals. The major production houses and work are now coming back,” he said.

Growth in Prime
According to Palaniappan, Prime subscriptions have seen “huge growth” particularly over the last 18 months, covering 97 per cent of the pin-codes serviced by the e-tailer.

He said 65 per cent of customer orders and 85 per cent of new subscriber acquisitions are happening in Tier-II and onwards towns.

Tier-II towns in States like West Bengal (Durgapur, Kharagpur, Howrah, Siliguri) Tamil Nadu (Madurai, Kodaikanal); Karnataka (Mysuru), among others are driving numbers.

Marked increase in smartphone penetration and better data connectivity are seen as two important reasons, apart from additional investments made by Amazon India.

Investments to capture Tier-II markets include an increased focus on improving the seller ecosystem, these include onboarding more sellers, nearly 50,000 local stores and 75,000 SMEs joining in local languages. This apart, Amazon India focuses on introducing listings in local regional languages; voice-enabled search options in the search bar and a distinct focus on creating videos (explaining usage of products and its features) rather than uploading user-manuals that can run into pages.

“There has been an increased adoption of digital services like bills being paid online and so on. All this helped us crack the Tier-II markets and push Prime, including the video and music services,” he said. The Hindu BusinessLine