How Amazon’s cost and revenue focus is altering Prime Video in India

In Might, Amazon Prime Video prospects in India have been in for a impolite shock once they obtained emails asserting that motion pictures and exhibits on the streaming service would include advertisements, beginning June. A brand new ad-free add-on choice can be accessible however would price an extra ₹699 per 12 months, or ₹129 per 30 days—basically customers must pay more cash to proceed watching the identical content material as earlier than, ad-free.

On condition that the entire premise of video streaming was freedom from advertisements versus cable tv, Prime Video’s transfer has are available for a lot vitriol from customers, particularly on social media platforms.

“I’m already paying for an excessive amount of stuff. And now they need me to see advertisements after I pay? How is that this a premium providing? Aren’t they breaking the belief of subscribers,” requested Roy.

The transfer is all of the extra stunning given how necessary India is for Prime. The corporate mentioned that the nation continues to be among the many prime three worldwide locales for Prime Video globally when it comes to variety of hours streamed.

In keeping with the corporate, in 2024, India had the very best proportion of members stream Prime Video on this planet. And within the final 12 months, almost 25% of its Indian subscriber base are new customers.

In keeping with trade consultants, paid Prime Video subscribers at present stand at 21 million in comparison with 12-15 million for shut rival Netflix.

“India stands out as one of many key locales that we see as a progress engine and driver for Prime Video globally. A lot of our Prime progress proper now could be coming exterior of the US,” Kelly Day, vice-president, worldwide, Prime Video, informed Mint. “And undoubtedly, India continues to be certainly one of our prime markets when it comes to new subscriber progress and new members for Prime. We consider it as a type of ‘will need to have’ within the international media panorama and it’s critically necessary for us to proceed to spend money on India.”

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Given how necessary the market is, why did Amazon select to introduce advertisements into what has hitherto been a purely subscription-based video-on-demand (SVoD) service?

Spinning the corporate’s transfer, Gaurav Gandhi, vice-president, Amazon Prime Video, Asia-Pacific & Center East-North Africa, mentioned, “The way in which we take into consideration that is that we’re giving individuals the selection. We now have programmed the identical content material throughout each (decrease and better subscription tiers). Clients can select how they wish to devour the content material, and we will modify and be taught as we go alongside.”

Subscriber woes

In reality, regardless of all of the constructive wanting statements and information emanating from the corporate and its management, viewer additions have plateaued. Amazon could also be barely forward of Netflix however each have fallen manner behind new entrant JioHotstar.

JioHotstar, which was born out of the merger of Disney+ Hotstar and JioCinema, crossed 300 million paid subscribers, guardian Reliance Industries mentioned on the firm’s annual common assembly this month.

In a way, Amazon might have had no selection however to go in for promoting on Prime as a supplementary progress technique, in keeping with trade consultants. Not like JioHotstar, the platform has been unable to interrupt the ceiling when it comes to paid subscribers over the previous few years.

That is regardless of a Prime subscription giving a person extra than simply streaming video content material—it additionally bundles Amazon Music, advance entry to offers, free supply on the buying aspect, studying, gaming, and plenty of different advantages. Certainly, no different supplier can match Prime when it comes to the sheer vary of advantages it affords members.

So far as Prime Video goes, even when 10-20% of customers transfer to the upper, ad-free tier, it could take common billings up. The platform hopes promoting income coupled with these paying for decrease, ad-supported value plans, will preserve it in first rate form.

The promoting guess actually appears to be paying off in Amazon’s residence market. This Might, it mentioned that Prime Video’s ad-supported month-to-month viewers has reached greater than 130 million within the US, with engagement rising to 37% in month-to-month viewing hours.

The MXP gambit

Maybe issues weren’t meant to come back to this go. Amazon earlier had a transparent demarcation between ad-driven and ad-free content material. Prime Video was ad-free, whereas the corporate had a complete factor happening the ad-driven content material entrance with video-on-demand service Amazon miniTV, which was free. It had a distinct programming slate, made up of low-budget, light-hearted younger grownup content material.

Doubling down on the latter, final October, the Jeff Bezos-founded firm had introduced it was buying choose property from Instances Web-owned MX Participant. The deal included the MX Participant app, which might be merged with Amazon miniTV to create Amazon MX Participant (Amazon MXP).

“We now have taken the trail of two companies, with Prime Video catering to the premium phase of audiences and Amazon MX Participant catering to a big phase of audiences not but able to pay for content material,” Gandhi added. “We’re investing in each of those to faucet into the bigger streaming alternative within the nation.”

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This February, Amazon MXP introduced a brand new slate of over 100 exhibits and films to premiere this 12 months. The mid-year listing of prime 50 streaming originals for 2025 revealed by media consulting agency Ormax included Amazon MX Participant exhibits reminiscent of Ek Badnaam Aashram, Chidiya Udd and Hip Hop India, amongst others.

Prime Video’s acquisition of MX Participant serves as a strategic flank to onboard mass-market audiences into the Prime Video ecosystem, mentioned Mihir Shah, Shah, vice chairman, Media Companions Asia, an unbiased supplier of analysis, advisory and consulting companies throughout the media and telecoms sectors within the Asia Pacific.

“Amazon now runs two parallel streaming companies in India: Prime Video, which targets subscribers searching for premium leisure, and MX Participant, catering to cost-conscious customers but to decide to a subscription,” Shah famous. He added that Prime Video serves as an necessary conduit for advertisers to achieve prosperous, paywalled audiences.

A senior content material government at a streaming platform mentioned Amazon MX Participant’s positioning is supposed to counter rivals reminiscent of YouTube. That mentioned, digital promoting in India remains to be at a nascent stage and Amazon MXP can even need to take care of JioStar, JioHotstar’s guardian, which affords the benefit of a mixed linear TV and streaming enterprise with an enormous sports activities repertoire.

As per major market analysis and media companies supplier Chrome Information Analytics and Media, Prime Video clocked complete income of ₹4,182 crore in 2024-25, as in comparison with ₹2,900 crore for Netflix (which solely affords subscription plans), ₹14,300 crore for YouTube and ₹8,835 crore for JioHotstar.

Reducing prices on originals

On one other entrance, Prime Video, lengthy deemed to be on the forefront of premium net programming in India, hasn’t renewed new seasons of some marquee SVoD exhibits, reminiscent of authorized drama Responsible Minds and Honey Bunny, the Indian adaptation of the present Citadel, which starred Varun Dhawan.

In the meantime, beforehand introduced titles reminiscent of Gulkanda Tales and The Finish, an formidable, high-octane authentic that includes Akshay Kumar, have made no progress.

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Plateauing paid subscriptions and rising content material prices might have led the platform to push extra tightly-budgeted originals.

The slowdown in investments in premium OTT content material in India isn’t a development distinctive to Prime Video. Nonetheless, trade insiders say Amazon CEO Andy Jassy, who took over in 2021, has been significantly eager to maximise income and lower prices. The senior government quoted earlier identified that the corporate has determined to tighten the belt on video originals globally and India is just one a part of the puzzle.

Additionally, the probably returns on high-budget sequence reminiscent of The Finish or Honey Bunny now not justify the investments required for them to the extent that they did when these exhibits have been first introduced. Prime Video was much more bullish on its prospects in India then, however has since seen paid subscription progress decelerate and different big-ticket originals reminiscent of Jubilee and Indian Police Pressure carry out under par. These exhibits can price between ₹100-200 crore per season, much like big-ticket theatrical movies.

“Generally, a title, in its first season, can actually escape and what’s written (for the second season) might require extra work, and the groups is probably not pleased with it. And lots of instances, tales include only a single season and we’re okay with it,” mentioned Gandhi.

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Authentic SVoD exhibits on Prime Video—the platform is planning 12-15 of them a 12 months—are renewed based mostly on two components, in keeping with Nikhil Madhok, head of Indian Originals at Prime Video and Amazon MGM Studios. “The primary is, whether or not the primary season obtained lots of client love, whether or not it was in style. The second issue is whether or not the unique season was conceived as a single season story (like Indian Police Pressure) or a multi-season arc,” Madhok mentioned.

Nonetheless, the chief cited earlier mentioned that the platform had allotted a big quantity of its total finances to licensing offers for motion pictures, a few of that are but to even go on flooring. Within the course of, it has axed a bunch of originals, a few of which had been beneath dialogue for months. Lots of producers have been knowledgeable the service wouldn’t be going forward with the initiatives they have been engaged on, publish the corporate’s newest enterprise assessment, he added.

The corporate denied these developments and mentioned greater than 60% of Prime’s fiction exhibits have gone into a number of seasons. It added that there is no such thing as a reality to the assertion that authentic titles have been dropped. Quite the opposite, it mentioned, Prime Video India is creating its most formidable and expansive slate since launch throughout languages and codecs in sequence, movies, and now theatrical releases with Amazon MGM Studios. With near 100 originals at present in manufacturing, growth, or negotiation, India represents Prime Video’s second-largest slate globally, after the US, it asserted.

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The upcoming lineup contains Do You Wanna Associate?, that includes Tamannaah Bhatia and Diana Penty; The Revolutionaries, a interval drama chronicling India’s freedom wrestle; Two A lot with Kajol and Twinkle, a brand new tackle the speak present format; Raakh, an investigative thriller; and Lukkha, marking rapper King’s appearing debut.

Prime Vice-president Day added that the corporate has continued to supply at scale in India for fairly just a few years now, and this isn’t one thing it could reduce on. “We’ve really produced essentially the most native originals in India … exterior the US,” she added.

Theatrical miscalculation

On the movie entrance, Amazon’s aggressive acquisition of tentpole Bollywood movies might not have paid off as hoped, given the unpredictable nature of the Indian field workplace, which has seen a number of big-ticket star autos, throughout Hindi, Tamil and Telugu, sink with no hint of late.

Acquisition of theatrically launched movies stays a serious content material price driver, leisure trade consultants informed Mint. A February 2025 report by media consulting agency Ormax estimated that Netflix and Prime Video have managed over 75% share of main theatrical movies launched in Hindi, Tamil and Telugu since 2022.

Nonetheless, as massive star autos falter on the field workplace, their enchantment on streaming faces challenges too. In the meantime, direct-to-OTT movies accounted for less than 10% of essentially the most watched streaming originals within the first half of 2025.

Whereas nonetheless buying movies from exterior manufacturing homes to premier publish theatrical launch, Prime Video is now bolstering its film library by making its personal titles, a few of which it plans to first launch in theatres for added income. The corporate can also be seeking to premiere 4 to 6 native Indian movies commissioned and produced solely by Amazon MGM Studios in theatres yearly, from 2026 onwards.

Generally, a title, in its first season, can actually escape and what’s written (for the second season) might require extra work, and the groups is probably not pleased with it. And lots of instances, tales include only a single season and we’re okay with it.

—Gaurav Gandhi

The corporate can also be making an attempt to rake in income in different methods. In April 2022, Prime Video introduced the launch of pay-per-view motion pictures on hire. Nonetheless, the mannequin stays area of interest in India. Prime Video additionally affords add-on subscriptions for third-party streaming companies, reminiscent of Apple TV+, DocuBay and BBC Participant, by means of the Prime Video app.

Whereas these won’t do a lot to raise the highest line, Media Companions Asia’s Shah believes that every OTT platform is making an attempt to take a definite path to mass market enlargement. “Prime Video is leveraging MX Participant, JioHotstar is extending past sports activities with non-fiction franchises and influencer-led codecs like Sparks, whereas Netflix is tapping into in style TV exhibits by means of its current Sony deal. But all face frequent structural challenges, together with escalating content material prices, the necessity for steady innovation, and the continued menace of piracy,” he mentioned.

On his half, Gandhi is assured Prime will prevail over the challenges: “Within the streaming world, we’re in very early days and there may be a lot extra to occur. That is an ‘and’ not an ‘or’ nation.”