Amazon India acquires MX Player to strengthen Prime Video

Amazon India's recent acquisition of MX Player, a popular OTT platform in India, from Times Internet Ltd. (TIL) at a discounted price is expected to boost Amazon's market share in the Indian OTT industry. Although the exact price of the acquisition is unknown, insiders estimate it to be around $45-50 million, which is approximately 25% less than what TIL paid for the platform in 2018. MX Player is the third most downloaded OTT app worldwide and the most downloaded app in India in 2022. The acquisition of MX Player is expected to help Amazon India attract more subscribers to its platform and gain a more significant foothold in the Indian OTT market.

The Indian OTT market is expected to grow rapidly in the coming years, making it a lucrative market for companies like Amazon India. However, the industry is highly fragmented, with more than 40 players in the market. The acquisition of MX Player by Amazon could trigger consolidation in the industry, with smaller players looking to merge or be acquired by larger players.

Consolidation in the Indian digital market has been a growing trend in recent years, with companies increasingly looking to acquire or merge with other players to gain an edge in the market. With Reliance entering the OTT market, there could be more intense competition in the Indian digital market. The acquisition of MX Player by Amazon India could be a strategic move to stay ahead of its rivals.

The OTT market in India has experienced rapid growth over the past few years. The COVID-19 pandemic, in particular, has accelerated the adoption of digital entertainment platforms. People were stuck at home during lockdowns and turned to streaming services to pass the time. The rise in affordable smartphones and mobile data prices has also contributed to the growth of the OTT industry. According to a report by FICCI-EY, the OTT industry in India was valued at $1.5 billion in 2020 and is expected to reach $3.3 billion by 2024. The report also states that the number of OTT subscribers in India is expected to reach 600 million by 2023.

Amazon Prime Video, owned by Amazon, is one of the major players in the Indian OTT industry. The platform offers a wide variety of content, including Indian and international movies and TV shows, Amazon originals, and live sports. However, the competition is fierce. There are several other major players in the Indian OTT industry, such as Netflix, Disney+ Hotstar, ZEE5, Voot, and SonyLiv.

MX Player, which was acquired by TIL in 2018, was primarily known as a video player for smartphones before it entered the OTT market. The platform gained immense popularity due to its wide range of content, including movies, TV shows, web series, and live TV. It also offers content in several regional languages, making it accessible to a wider audience.

The acquisition of MX Player by Amazon Prime Video is expected to give the latter a significant boost in terms of user base and content library. The deal will enable Amazon to expand its reach in the regional language market and strengthen its position in the Indian OTT industry. With the acquisition, Amazon will be able to offer a more diverse range of content to its users, thereby enhancing their viewing experience.

However, the Indian OTT industry is facing several challenges, such as regulatory uncertainty, content moderation issues, and rising competition. In September 2020, the Indian government issued guidelines for digital content, which require OTT platforms to self-regulate their content. The guidelines also mandated a grievance redressal mechanism to address complaints from viewers. While some players in the industry have welcomed the guidelines, others have raised concerns and have criticised it for being vague and lacking a proper enforcement mechanism.

Additionally, content moderation is another challenge faced by the Indian OTT industry. With the rise in digital content consumption, there have been concerns about the appropriateness of some of the content, especially in the context of Indian culture and values.

Furthermore, the Indian OTT market is highly competitive, with several players vying for a larger share of the market. This has led to price wars and intense competition, which could lead to consolidation in the industry.

In light of these challenges, the acquisition of MX Player by Amazon is a significant development in the Indian OTT market. While it is unclear what impact it will have on the market dynamics in the long run, it is evident that Amazon's entry into the market with a more significant user base could lead to increased competition and consolidation. The OTT market in India is still nascent, and it will be interesting to see how it evolves in the coming years, especially with the entry of Reliance Industries and other players.

In conclusion,

The acquisition deal of MX Player by Amazon Prime Video is expected to give Amazon a significant boost in terms of user base and content library. However, the Indian OTT industry is facing several challenges, such as regulatory uncertainty, content moderation issues, and rising competition, and so companies will need to navigate the regulatory and competitive landscape carefully to succeed in this market. It remains to be seen how the industry will evolve in the coming years and how the major players will adapt to the changing landscape.

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