Amazon Prime eyes launch in India

Amazon is reportedly looking to launch Amazon Prime along with its movie and music streaming service in India later this year.

At the end of last year, the Seattle-based ecommerce giant hired Nitesh Kripalani, former executive vice president of India’s Multi Screen Media (MSM), to head its online video business. MSM operates the Sony Entertainment Television (SET) channels in India.

According to India’s Economic Times, Kripalani is talking to Mumbai-based studios Yash Raj Films and Eros International about licensing content.

Access to Bollywood content will be critical for Amazon in India, where Hollywood still has a less than 10% share of the theatrical distribution market. Meanwhile, audiences in the south of India prefer film and TV content in their own languages, including Tamil and Telugu.

Amazon also faces big challenges in India’s slow internet speeds. VOD and streaming has yet to take hold in the country, despite the local audience’s huge appetite for film and TV content.

Amazon launched its ecommerce and delivery service in India two years ago and competes with local players such as Flipkart and Snapdeal. The country’s weak logistics infrastructure has hampered growth of ecommerce – India is currently the smallest ecommerce market amongst the BRICs (Brazil, Russia, India & China).

Flipkart launched a digital music store Flyte in Feb 2012, but it closed at the end of 2013 due to slow uptake. However, sales of eBooks have grown eight-fold, although they only account for 2-5% of the market compared to 30% in mature markets.

Amazon Prime’s annual membership is sold for $99 in the US, around Rs6,000 in local currency, which would mean that only middle-class consumers could afford the service.