Originally published at VideoInk.
Yesterday reports surfaced that Amazon is busy developing a new ad-supported streaming service that it will package in its Fire Stick streaming devices, according to a report from The Information. Rumors of an Amazon-branded AVOD service have been floating around since 2014, but the company has always denied the claims. While Amazon has yet to confirm or deny this most recent report, a free ad-supported service would strengthen the company’s push not only in the US but in India as well—a country that not even Netflix has been able to successfully infiltrate.
Amazon already has a presence in India, but it’s a small one. The company has only been able to attract around 11 million subscribers in the nation. While this number puts it ahead of Netflix, which has just five million subs, it places it far behind Hotstar, the leading service in the country with more than 75 million subs. Hotstar’s growth has been driven by a mix of two things: its library of locally grown content and its hybrid pricing model. The streamer offers consumers a free version of its service as well as a subscription plan if they choose to upgrade, though most don’t. Only two or three percent of Hotstar subscribers actually pay for the service, according to a report from the global industry analysis firm Counterpoint.
So far, Amazon and Netflix have been reluctant to ditch their current pricing models in the country, which has hindered their growth. In 2013, the median annual income in the country was $616, according to Gallup. To spend a chunk of that yearly income on entertainment that can be found elsewhere (and for free) is something that most aren’t willing to do. Take Netflix for example. According to Counterpoint, approximately six percent of subscribers in India pay for the service and the rest (94 percent) take advantage of the ‘free first-month’ trial through multiple credit and debit cards.
But now with Amazon reportedly in the process of launching an AVOD service, the company has an opportunity to more effectively convert the 1.3 billion people living in India to loyal customers—if it decides to take the service there.
However, according to sources that spoke to The Information, the free service, which is dubbed Free Dive, will only be available for free to owners of Amason’s line of streaming hardware (Fire TV, Rire Sticks, etc). This could be an issue in India where a majority of consumers stream content from their mobile phones. However, just as Roku has made its AVOD service available outside of its own streaming devices, Amazon could choose to do the same.