In a strategic move to broaden its reach in India’s burgeoning video streaming market, Amazon has acquired assets of the Indian streaming service MX Player from Times Internet. The deal, finalized on Wednesday evening, underscores Amazon’s ambitions to penetrate smaller cities and towns in India, a critical overseas market for the e-commerce giant.
Details of the Acquisition
Amazon’s acquisition, valued at under $100 million, includes specific assets of MX Player but not the entire company. This transaction marks the culmination of nearly two years of negotiations between Amazon and Times Internet. The acquisition follows Times Internet’s broader strategy of divesting its digital properties over the past two years. Sources indicate that Amazon’s purchase will retain the MX Player branding, leveraging its strong presence among users in India’s smaller cities.
Background and Context
Times Internet, a subsidiary of the Times Group, originally acquired MX Player in 2018 for $140 million. Initially a South Korean app, MX Player gained immense popularity in India due to its versatile local video playback feature, which supports various video file formats. This feature made MX Player particularly compatible with the affordable Android smartphones prevalent in India’s developing markets.
Under Times Internet’s ownership, MX Player transformed from a local video playback app into a comprehensive video streaming platform. The company invested significantly in creating a diverse content library, including licensed and original TV shows, movies, and even games. This strategic pivot aimed to meet the growing demand for online entertainment in India and other international markets like the UK and the U.S.
In mid-2020, following the Indian government’s ban on TikTok, MX Player launched its own short-video app, MX TakaTak, to capitalize on the market gap. This venture was later sold to ShareChat for over $650 million.
Amazon’s Strategic Expansion
Amazon’s acquisition of MX Player is part of its broader strategy to enhance its video streaming offerings in India, especially outside metropolitan areas. The company has been aggressively marketing its video streaming services, offering a variant of its Prime subscription for as little as $9.50 annually, which includes a version of Prime Video. Additionally, Amazon has forged partnerships with local telecom operators to bundle Prime Video with their tariff plans.
In 2021, Amazon introduced an ad-supported free video streaming service in India, further diversifying its content delivery channels. The acquisition of MX Player, which holds a 15% market share among video streaming services in India, will significantly bolster Amazon’s efforts to compete with market leaders like Reliance and Disney, whose combined apps command 55% of the market.
Market Implications
From my perspective, this acquisition positions Amazon to better compete in India’s competitive streaming market. MX Player’s strong foothold in smaller cities and towns offers Amazon a ready-made user base and a familiar brand that resonates with a demographic traditionally underserved by its primary e-commerce services.
While Amazon’s Prime Video and miniTV have established a presence in India, their market share remains relatively small compared to local giants. By integrating MX Player’s assets, Amazon can leverage its existing content library and distribution capabilities to offer a more compelling product to a broader audience.
However, the success of this acquisition will depend on Amazon’s ability to maintain and grow MX Player’s user base while integrating its content and services seamlessly. Additionally, as Amazon continues to expand its video offerings, it will need to navigate the complex regulatory landscape and competitive pressures from other streaming services.
In conclusion, Amazon’s acquisition of MX Player represents a strategic investment aimed at strengthening its presence in India’s rapidly growing digital entertainment market. By tapping into MX Player’s established user base and brand recognition in smaller cities, Amazon is well-positioned to enhance its market share and compete more effectively with local and international rivals.
