Feb 11, 2022 - World

Global content arms race descends on India

Share of global demand for non-English language content
Data: Parrot Analytics; Chart: Thomas Oide/Axios

Facing saturation in the U.S., media giants are looking abroad for growth, and India — the second-largest internet population globally — is ripe for disruption.

Why it matters: When it comes to monetizing attention, "India has immense room to grow," said Ravi Agrawal, editor-in-chief of Foreign Policy and author of "India Connected: How the Smartphone Is Transforming the World's Largest Democracy."

  • "On eyeballs, the room to grow is now limited by the speed of the spread of the internet and TV," he said. "The real battle is over monetizing those eyeballs, whether through subscriptions, data, or advertising."

By the numbers: Global demand for Hindi-language programming is the highest by far among non-English content, according to data from Parrot Analytics, despite losing some ground to Japanese content in recent months.

Driving the news: Disney on Wednesday revealed for the first time a geographic breakdown of Disney+ subscribers, and India — not North America — is currently its biggest market.

  • At the end of last year, Disney had 45.9 million subscribers to Disney+ Hotstar, its Indian premium streaming platform, compared to 42.9 million North American subscribers.
  • Subscription growth in India was by far the highest last quarter for Disney+, compared to North America and the rest of the world.

Be smart: Disney acquired Hotstar from 21st Century Fox in 2019.

  • Hotstar is currently the largest streaming platform in India, and is especially popular thanks to its exclusive Indian Premier League (IPL) cricket rights, which expire this year.
  • Because cricket rights are a huge entry-point to the Indian media market, entertainment giants are already preparing competitive bids, per The Wall Street Journal.
  • On an earnings call Wednesday, Disney CEO Bob Chapek confirmed that the company is trying to extend its current IPL rights, but noted that if the company didn't win them, its investments in localized entertainment content would help them remain competitive in India.

The big picture: India has long-been a coveted growth market for streaming companies, but the audience in India tends to demand localized content, which can make investments there expensive.

  • Compared to other countries, India has a huge demand for original content from homegrown platforms, per Parrot.
  • Four separate local platforms each had more than 2% share of demand for their originals in India last year, including Zee5 (7.1%), Hotstar (4.6%), Voot (3.3%), and ALT Balaji (2.7%). Still, enormous investments in localized content by Amazon Prime and Netflix have made it tougher for localized platforms to compete.

Yes, but: Although the Indian market may have enormous potential, for now it's still hard to drive big profits there.

  • Culturally, most consumers are accustomed to getting free ad-supported streaming content on mobile, which makes it hard for streamers to charge Indian customers a lot for subscriptions.
  • The average revenue per paid subscriber of Disney+ Hotstar, for example, is $1.03, compared to $6.68 in North America.
  • Cable subscriptions are also relatively cheap in India, which makes streaming less of an attractive alternative to cable.

What to watch: Big money is flooding the Indian market, as investors rush to cash in on the region.

  • On Wednesday, Lupa Systems founder and CEO James Murdoch and Uday Shankar, the former chairman and CEO of Star India (an Indian subsidiary of Disney) and the former president of Disney's APAC region, announced the formation of a new venture called "Bodhi Tree," an investment platform focused on Southeast Asia and India in particular.
  • The venture is backed by the Qatar Investment Authority (the sovereign wealth fund of the State of Qatar) with $1.5 billion.

Go deeper: U.S. firms look to India as next media battleground

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