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ValueTheMarkets NewsCommentary - The Indian entertainment market is growing at a rapidrate that far outstrips contemporaries in the West. The huge nation ofmore than 1 billion people is expected to see a compound annual growthrate of nearly 15% over the next five years according to Statista.This article discusses the issue with reference to Netflix ( NASDAQ:NFLX ) , Walt Disney Co ( NYSE:DIS ) , Paramount Global ( NASDAQ:PARA ) and QYOU Media ( TSXV:QYOU ) ( OTCQB:QYOUF ).
With a huge population dominated by young people,an emerging middle class and rapid adoption of technology, Indiarepresents a compelling opportunity for entertainment companies.We'll explore here how some, like Netflix, appear to beunderperforming and facing criticism for their efforts. Meanwhile,Disney has seen some success but might be bailing out of the countryas it faces increasing competition from the unlikely form ofParamount's JioCinema. Harnessing the power of cricket has yieldedexplosive viewing figures, but producing local content seems to be thekey to growth in this market.
QYOU Media (TSXV: QYOU) (OTCQB: QYOUF) produces, distributes and monetizes content created by socialmedia influencers and digital content stars.
The company has recentlyannounced the launchof a new smart TV channel dedicated to Bollywood and Indianentertainment industry news.
The channel continues the company's tried andtested method of using creator-led content. That's because thisnew venture is a collaboration with Bollywood Hungama, a leadingsocial media destination for Bollywood gossip.
With the Indian smart TVmarket having tripled in the last 18 months and making up more than90% of TVs sold in the country over the last year, focusing on thespace could be a smart strategy.
However, with its wide variety of content beingdistributed across app-based platforms, video-on-demand services,traditional networks and even gaming platforms, the company isreaching over 125 million Indian households weekly as it strives tobuild an entertainment empire.
Netflix (NASDAQ: NFLX) is another companyseeking to capitalize on the huge Indian entertainment market.According to the EconomicTimes , the streaming service's subscriber base in thecountry floats around between the 8 million and 10 million mark.
There is a huge amountof content created specifically for the market on the platform. TheseIndian Netflix originals include 59 original movies and even moretelevision shows, as well as several stand-up comedies and documentaryfeatures.
Whilethis sounds like a significant amount of both subscribers and localcontent, it might not be enough.
Analysts at AllianceBernstein have notedthat the streaming giant lagsbehind several big-name competitors in the country in terms ofsubscriber numbers, despite attempts to entice people on board withprice cuts.
Thekey problem with Netflix's offering in India? Alliance Bernsteinanalysts point to a lack of locally produced content, which makes upjust 12% of its offering for Indian users.
Walt Disney Co (NYSE: DIS) is at theother end of the streaming spectrum. This entertainment giant hasperformed strongly in India, obtaining approximately 40 millionsubscribers through its Disney+ Hotstar offering, which is the largeststreaming platform in the country.
The platform has an emphasis on local networks,carrying content such as films, television series, live sports andoriginal programming. This content is combined with established Disneybrands and franchises like Walt Disney Studios, Pixar and Lucasfilm,creating an entertainment offering with big-brand and localcrossover.
However, Disney has faced major competition in the region too. Recentreports suggest the entertainment powerhouse could even opt tosell Hotstar off to Indian billionaire Gautam Adani. There is somesuggestion that this is due to pressure from emerging competitorJioCinema.
Thisgrowing streaming giant even has a major Western entertainment companybehind it…
Paramount Global (NASDAQ: PARA) , with their Paramount+streaming app, have had fair success too, with second-quarterearnings showing a 47% increase in revenue from the platform,while viewing hours rose too.
However, it's the company's activities inIndia that we're interested in.
That's because it owns a 13% minority stake inJioCinema owner Viacom18, offering significant exposure to the rapidlygrowing Indian streaming outfit. Its growth has been aided by thedecision to show Indian Premier League (IPL) cricket matches forfree.
Indeed, the2023 IPL final set a record for concurrent viewership of a streamingbroadcast, attracting over 120 million unique viewers.
The success of thisplatform led Paramount to recently shelve plans to launch its own appin India, instead opting to release content as part of JioCinema'spremium package. This could potentially supercharge an already wildlysuccessful product.
Several strategies have been employed as companies compete todominate the Indian entertainment market. Netflix appears to havefailed to lean heavily enough into locally produced content in itsefforts, with Disney, QYOU and Paramount all using local studios andcreators to steer the success of their content. Aside from this,exploiting India's fascination with cricket and growing interestin tech and gaming appears to be key to ensuring continuedsuccess.
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