Netflix vs Amazon: A comparison in the UK and India

Recently released figures reveal that while Netflix is twice as big as Amazon in the UK, the streaming giant is trailing its main competitor in the Indian market.

Netflix has almost 7.5 million UK subscribers, as of the third quarter of 2017, according to research from Broadcasters Audience Research Board (BARB), while Amazon Prime Video has around 3.8 million.

Locally produced series like The Crown (pictured) and its US originals appear to be paying off for Netflix, which had a head start in the UK, launching in 2012. Amazon launched a few years later in 2014 when it bought local Netflix competitor LoveFilm and rolled it into Prime. While movies and TV series, along with free Prime shipping, are included in the Amazon subscription, some content is offered on a TVOD basis.

However, Amazon is growing faster than Netflix – up by 51% in the third quarter, compared to the same period the previous year, while Netflix has a growth rate of only 23%.

NOW TV FASTEST GROWING UK SVOD

Now TV, the streaming service operated by pay-TV broadcaster Sky, had the largest annual subscription growth of 70%, increasing by 600,000 subscribers over the past year to reach 1.4 million. The total number of UK homes subscribing to an SVOD service is 9.5 million, an increase of 24% over the previous year.

While Netflix’s US content is understandably popular in the English-speaking UK market, the streamer has also acquired UK-produced shows including Black Mirror and Peaky Blinders and commissioned its own UK content such as The Crown.

Amazon is hoping to play catch-up with the appointment of former Fremantle Media International executive Georgia Brown, who recently joined the company to head up European content. So far, Amazon’s biggest UK show is The Grand Tour, a spin-off of popular BBC motoring series Top Gear, which it used to launch its service globally at the end of 2016.

“The SVOD market is enjoying a sustained period of growth in the UK; more than nine million UK households subscribe to at least one SVOD service,” BARB noted.

“When you take into account homes that have more than one service, we can project that there are over 12 million subscriptions to SVOD services. This is in addition to any pay-TV packages to which homes are committed, and the SVOD market has not yet reached maturity.”

NETFLIX TRAILING AMAZON IN INDIA

It’s a different story in India, where Netflix has an estimated 5 million subscribers, trailing Amazon with 11 million, according to recent figures from Hong Kong-based analysis firm Counterpoint Research.

Those figures make Amazon the biggest paid subscription player in the Indian market, but it’s the third biggest overall when hybrid and ad-supported services are taken into consideration.

Hotstar, owned by broadcaster Star India, is the biggest with 75 million subscribers through its ‘freemium’ model, which includes some free but ad-supported and some premium content, followed by Viacom 18’s Voot, which has 22 million subscribers for its fully ad-supported service. Sony Liv, also with a freemium model, is on par with Netflix at 5 million subscribers.

All three of the ‘local’ players – local in that they’re specific to the Indian market although all are foreign-owned – offer much more local content than Netflix or Amazon, thanks to their access to the deep libraries of leading broadcasters Star India, Viacom18 and Sony Entertainment Television (SET).

Hotstar also has rights to stream Indian Premier League (IPL) cricket matches and has a deal with HBO that includes one of its hottest properties, Game Of Thrones. Star India may also gain more content following Walt Disney’s $52.4bn acquisition of 21st Century Fox, although the broadcaster currently has a much bigger footprint than Disney in India. Voot has popular shows such as Big Boss, MTV Unplugged, Roadies and Splitsvilla.

Amazon and Netflix are investing heavily to expand their Hindi-language content libraries, acquiring films and commissioning web series, although both lag far behind the deep libraries of local broadcasters, which also include regional-language fare.

In contrast to the US market, where Amazon has been investing in specialty titles such as The Big Sick, The Handmaiden and Manchester By The Sea, in India the streamer is working with some of the most mainstream studios, such as T-Series and Dharma Productions. It has also launched two web series, Breathe and Inside Edge, and has several more in production.

Netflix has been slightly less active but is gearing up now with a string of web series and deals with Bollywood star Shah Rukh Khan and veteran producer Ronnie Screwvala.

BATTLE TO CONVERT TO PAY

However, what is clear from the Counterpoint research is that Indian consumers still prefer free or ad-supported services. The research firm estimates that only 2-3% of Hostar’s subscriber base is paying for the service, which costs $3 (Rs199) per month, while the rest are consuming the service’s free content.

Counterpoint also estimates that only 6% of Netflix’s Indian subscribers are actually paying for the service, with the rest using multiple credit and debit cards to take advantage of a month-long free trial. Amazon’s subscribers are all paying customers, but the service is comparatively cheap – $16 (Rs999) for an annual subscription to Prime that also includes free shipping – compared to Netflix’s monthly sub of $7.90 (Rs500).

“The majority of Indian audiences are still stuck to the free or ad-supported model as of now. Several options, including web-series, stand-up comedies, etc, are already available on YouTube free of cost,” said Counterpoint senior analyst Hanish Bhatia.

Indeed, over the past few years, there has been a huge rise in Indian web series, produced by companies including Y-Films and The Viral Fever, which cater to younger viewers and are available for free on YouTube.

READ MORE: Y-Films’ Ashish Patil on India’s web series revolution 

Bhatia added that growth in the SVOD sector is expected, due to increasing smartphone penetration and falling data prices, which has been driven by the aggressive entry of 4G provider Reliance Jio in September 2016. The current value of India’s OTT market is $280m, an increase of 35% year-on-year, with nearly 100 million subscribers.

However, the market has way too many players, with local platforms including BIGFlix, Ditto TV, ErosNow, Spuul and YuppTV also jostling with the global streamers and local broadcasters. Singapore-based HOOQ and Hong Kong-based Viu have also launched services in India.

“With over a dozen players in the space, one can expect consolidation and a few players exiting in 2018,” Deloitte India’s Jehil Thakkar told local business paper, the Economic Times.