Amazon is priming for a win 

India has an insatiable appetite for data, especially on the go, with the proliferation of over-the-top (OTT) services. As millennials are increasingly ditching television for online content, the trend is only going to go up. Mobile connections in India, touted as one of the 10 largest video streaming markets globally this year, are expected to touch 850 million by 2022. This is music to the ears of OTT service providers such as Amazon Prime Video, for the scenario presents a huge growth opportunity.

Within three years of its launch in the country, the American video streaming giant, with its large collection of exclusive movies, originals, Indian stand-up specials, etc., has become one of the leading players. Apart from English, it has local content in nine Indian languages. And itis priming for a win. In 2019, Amazon Studios, which produces and distributes films and TV series for Amazon, announced the commissioning of more than 20 new series globally; seven are from India. Gaurav Gandhi, director and country general manager, Amazon PrimeVideo, India—who earlier launched and headed Viacom 18’s digital arm Voot—talks to Fortune India about the company’s journey from tiny smartphone screens to bigger smart TV screens in households and how Amazon India makes sure viewership on both platforms continues to grow. Edited excerpts:

You have been in the industry for quite some time. What has driven the OTT space over the years?

As an industry, we have seen hundreds of customers coming in and watching OTT content. It’s driven by four key factors. One, 96% of homes in India have one TV. The ubiquitous mobile phone, which can stream and is available at very affordable price points, coupled with cheap data became the baseline for this growth to happen. The second part came from our demographics. India is a young country and younger people are more drawn to on-demand content. The third factor is that a large amount of content in India was available in front of the paywall which was free and ad-supported. And the fourth one is high-quality premium content and movies coming so quickly; this has further driven this entire movement to a point where customers are saying: ‘I have my screen in hand, I am generally on the go and can access my content wherever I am. Now I have premium content and now I am willing to pay for that content as well.’ So, the journey started with people just getting online and getting things that were free, but now they are willing to pay for that content as well.

India is a very price-sensitive market. Was that ever a challenge?

To say that Indians don’t pay for content is not correct. We are a very value-conscious society, which means we want to derive value out of what we pay. So there’s a difference between cost-conscious and value-conscious. Indians have paid for cable TV all their lives, they have paid for cinema, and they are paying for good-quality premium content now.

Therefore, a platform like Prime where we make it great value not just from one benefit but multiple benefits—whether it’s shopping or shipping or music or video—we bring that value proposition to the customer. That becomes very appealing and makes it the best deal in town. The quality of original content coming from India, the customers haven’t seen that before. Content also is a great amount of social currency, a great conversation starter. So, people want to really watch it, binge on it, and then talk about it. You need to make sure your offering is valuable enough for the customer to want to pay for it.

In your experience, how have viewing patterns changed over the years?

Streaming is an added dimension to content creation. We need to see how the behaviour of people is different when they watch online versus when they watch television. When we started watching movies there were all single-screen theatres and no multiplexes. And in the 1980s, the movies were all about all genres rolled into one as you had to fill a 1,000-seat theatre and you were appealing to that broad base. If you had a thematically skewed genre film, that would often fall into art. Over the years that whole journey of films that are genre-based segmented to a particular audience has emerged.

So what did multiplexes do differently? They created a commercially viable option to offer great content to a segmented audience. I think streaming is doing exactly that for television. It allows us to create [content like] Made in Heaven, Mirzapur, Family Man, Breathe, Four More Shots Please!, and Inside Edge—all differently segmented [audiences] but large enough in their own right.

So, it’s not one size which has to fit everyone. It is the convenience of a personal screen, personal viewing. Overall, what is it doing? It’s increasing the total time you’re spending in front of the screen. The mobile is providing ‘choice inconvenience’, while the living room is providing ‘choice in experience’.

How do you decide what content to get to AmazonIndia from around the world?

Our sources of content are different. We haveAmazon Studios, which creates originals from the U.S. and other parts of the world. So all the hits like The Marvelous Mrs. Maisel, or JackRyan, or Hannah—all of these come from there. And then there is Prime Video’s India originals team, which creates all the Indian hits. And we also work with partners to get exclusive licensed content—it could be from India, across nine Indian languages that we do now or international shows and series like Young Sheldon.

In India, we look at customers backwards, with what we believe that customers in India would like to watch. For us, India is not one India, there are already 10 Indias in the way we programme based on our languages. One example of how we decided by keeping our ears to the ground is comedy. We understood there was a gap in cinematic quality, fiction content, and originals [for comedy], but we also figured there was a genre gap.

Our movie strategy is also along the same lines. We segment [audiences] according to language, genre, and age. That’s how we look at customers; there’s no one customer. The first to latch on to streaming would probably have been the younger customers. But this is quickly changing and expanding. Prime Video is watched in 4,000 towns and cities in India today. Storytelling is ingrained in our culture. We have all grown up telling, listening to, and watching stories. We [at AmazonPrime Video] look at the best stories and see if our customers will love it or not.

With newer players like Flipkart and Zomato getting into video originals and established players like Netflix and Hotstar also targeting the same set of viewers, do you feel threatened?

We are in the very early days of this business as an industry. If you effectively look at it, it’s just been three to four years since the category of this kind has really emerged [but]the headroom for growth is tremendous. We believe in the next four to five years, there will be as many people streaming videos as they watch television. It’s not a share of wallet or a race for subscriptions only; it’s a share of attention, respect, and time. And when you're doing that, starting from the customer backwards is the best way and that’s where Amazon’s philosophy really helps us. If you look at the offering that Prime brings holistically, that’s unique.

But we don’t sit and relax because that offering is unique, we make the benefits so appealing that customers would value that as the best in class. At one level, everybody creating great content further increases the customer’s appetite to [an] overall move towards wanting to watch more. It’s the best time to be a consumer of video right now and also a great time to be a creator.

What about traditional forms of content viewing like cinema and TV?

While there is a movement toward watching more online content in general, I think we’re a large country and a large market. We have opportunities for both to grow. Of course, the streaming business is growing faster, but I don't think that it’s about customers watching this and not that.

Is streaming movies on OTT impacting cinema?

I look at it in two ways: What does the cinema give? It gives a window to watch a movie on the day of its release and it gives a fantastic experience in a theatre. It’s an outing. The whole package is cinema. It’snot just the content. As film-crazy as we are as a country, for the 1,900 movies we make [annually], we have just 9,000 screens. Of course, there’s growth there. But we believe we have a role to play and an opportunity to serve the customers who may not always be able to go to every film in a cinema hall. We offer those films to customers in the language of their choice as early as possible. Both are growing.

Mobile continues to be a leading device for streaming in the country and possibly will remain so for a period of time because that’s the easiest entry point to get a screen. India is generally mobile-first, which doesn’t mean it’s mobile-only. We have also partnered with DTH players like Dish TV, Airtel, and Tata Sky to expand our customer base. If you are buying a device, we want to make sure that our content can come to you in the easiest manner possible. The choice of access is yours. We want to be available to you wherever you want to go.

(This story was originally published in the January 2020 issue of the magazine.)