BENGALURU: Amazon India may start offering
music, movie and video streaming services later this year besides debuting its
Prime subscription service as it looks to expand offerings in the country, key
to its global expansion strategy. The Jeff Bezos-led company is currently
evaluating the feasibility of such services while building up a content
library, which would be a critical element of Amazon Prime.
The Indian unit of the Seattle-based ecommerce
company has tasked Nitesh Kripalani, former executive vicepresident at Multi
Screen Media — which runs Sony Entertainment Channels — to get access to
"digital content", according to a person familiar with the
development.
"We are working towards it... difficult to say by when as Nitesh has just been brought in... but he will soon start talks with content providers," said a second executive aware of the discussions. "The biggest limitation is the slow Internet speeds. So, we are looking at how we can bridge this. Hopefully, we should have some of these offerings available sometime in the second half of the year."
"We are working towards it... difficult to say by when as Nitesh has just been brought in... but he will soon start talks with content providers," said a second executive aware of the discussions. "The biggest limitation is the slow Internet speeds. So, we are looking at how we can bridge this. Hopefully, we should have some of these offerings available sometime in the second half of the year."
Amazon India's push into the entertainment
space marks an important step in the fiercely competitive ecommerce space where
participants are looking to position themselves as a central gateway for
customers — from everyday purchases such as grocery and diapers to music, books
and movies.
The company is yet to appoint an executive who
will roll out Prime in India, but it has started strengthening its logistics
and shipping team and is expected to more than double this to 14,000 people by
July from the current 6,000.
Bengaluru-based Flipkart last year launched
Flipkart First, an annual subscription service, and some industry watchers
believe it will not be a surprise if Amazon India launches Prime in 2015. In
the US, customers get free two-day shipping and get access to more than 15,000
movies and TV shows.
Kripalani, who was appointed head of digital
content at Amazon India last month, is expected to start negotiations with some
of the country's largest music and movie companies, including Mumbai-based Yash
Raj Films and Eros International Media as these production houses hold the
rights to thousands of titles.
Although details remain sketchy, multiple
executives said Amazon India is looking to adopt the "streaming"
option rather than letting subscribers "download" music and movies.
This is unlike the model adopted by Flipkart, which allowed users to download
music when it launched digital music store Flyte in February 2012. That shut a year-and-a
half later after the service failed to find takers.
An Amazon India spokeswoman said it doesn't
comment on future plans.
Nonetheless, some experts urged caution as the
country's e-commerce market remains the smallest among emerging markets and
what is being envisaged involves a high level of capital investment.
"Only a few million of India's one billion-plus
people purchase online and the COD (cash on delivery) issue has made it
extremely expensive to execute well," said Sucharita Mulpuru-Kodali,
retail analyst, who follows ecommerce for Forrester Research.
"India is the smallest e-commerce market
of the BRIC (Brazil, Russia, India, China) countries and frankly I'm not sure
why Amazon is investing heavily in it... when the company has a number of other
issues to contend with," she said. "I don't see Indian ecommerce
being as significant as Chinese e-commerce anytime soon, and the bet they are
making suggests that they think it could be the next China. I'm not sure that
is a realistic expectation." To be sure, Amazon has been unable to gain a
foothold in the Chinese market, which is dominated by homegrown companies,
hence the importance of the Indian market for the US e-commerce giant.
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