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Fox Streaming Service Hotstar Breaks Out in Burgeoning India Market

It boasts more users on its home turf than the number of Netflix subscribers in the U.S. It offers content in multiple languages, and touts a library stocked with shows from American studios such as HBO, Disney, Marvel and National Geographic.

Streaming service Hotstar is barely known outside India. But the company now counts between 75 million and 100 million active users a month in the world’s second-most-populous country, topping a list of more than 30 providers in an increasingly crowded and competitive OTT market. It easily outstrips its four nearest rivals combined: Viacom 18’s Voot, with 22 million subscribers; Amazon, with 11 million; and Sony’s Liv and Netflix, each with 5 million as of last December, according to Counterpoint Research.

“Our leadership has been established by focusing on just two things,” says Hotstar CEO Ajit Mohan. “We have created a compelling portfolio of stories that span across TV shows, movies and sports, both local and international. And we are dogged about our focus on technology to keep improving the experiences we create on Hotstar.”

Launched in 2015, the streamer is operated by 21st Century Fox’s Star India. It enjoys synergies with its vast sister broadcast network Star, with content available in many of the dizzying array of languages spoken in India, including English, Hindi, Bengali, Kannada, Malayalam, Marathi, Tamil and Telugu. International content comes through deals with such networks as Showtime, ABC and Fox Life. Hotstar also offers several sports options, such as the immensely popular Indian Premier League cricket tournament.

“The other Indian OTT players are still stuck in the rut of being ‘the other players,’” says industry analyst Sidharth Jain, founder of The Story Ink and, until last year, creative producer at Hotstar. “While [other players] have the resources and opportunity to break out, they seem to be stuck in a very traditional TV-style way of looking at the OTT business. The only way they can expand their market share is by thinking organic-digital, investing in disruptive [and] engaging original content backed by solid marketing.”

Hotstar has been more circumspect about producing content, unlike Netflix and Amazon, which together have more than two dozen original series in the works in India. “Our philosophy on originals has been that we will invest in exclusive shows on Hotstar when we have the opportunity to tell a story that has not been told before or create a format that no one has explored before,” Mohan says. Hotstar has produced “On Air With AIB” (pictured), a satire on the news, and “CinePlay,” which brings cinematically shot stage plays to viewers not in the habit of going to the theater.

The company has also benefited from the data explosion set off in late 2016, when telecom provider Jio offered subscribers free 4G data for a year and extremely cheap rates thereafter. Competitors followed suit. The shift has allowed Hotstar to move beyond urban areas into small towns, where it mainly attracts mobile-device users. “In a world that does not fear data charges, video is very often the first port of call for new data users,” Mohan says.

Jio, with more than 160 million subscribers, could emerge as the next big Indian OTT player. The company is a subsidiary of Reliance Industries, which owns a controlling stake in broadcaster and studio Viacom 18, a 5% stake in Bollywood studio Eros International and 25% of content creator Balaji Telefilms. Jio is in the process of signing content deals with a number of production houses. “If Jio can crack quality talent to deliver engaging stories in bulk, then that, combined with its giant subscriber base, could be a game changer,” Jain says.

The other game changer could be Disney’s upcoming streaming service. If the mammoth studio’s acquisition of Fox assets goes through, the Mouse would also own Hotstar. Both Disney and Mohan declined to comment on whether there would be one consolidated streaming service rather than two competing ones.

Despite its huge potential, the Indian OTT market is smaller than might be expected in financial terms, largely because of low subscription revenues. Hotstar operates on the “freemium” model, offering both free content and subscriber-only shows such as “Game of Thrones” and “True Detective.” A subscription is available for as little as $1.50 per month, similar to Amazon India’s $1.25. By contrast, Netflix costs $7.65 a month. A recent Deloitte report valued India’s OTT sector at $109 million but predicted it would double in size by 2020, fueled by younger consumers.

“A new generation of users is emerging in India who take for granted round-the-clock access to the best stories,” Mohan says.

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