Warner Media LLC's streaming service HBO Max is readying to enter India's crowded streaming market, making a belated challenge to rivals already offering an array of local shows and exclusive live sports.
HBO Max recently named an India entertainment content head as the service prepares to compete with market leaders Walt Disney Co., Eros STX Global Corp. and Amazon.com Inc. The India unit, which is yet to announce a start date, will also have to contend with Sony Group Corp.'s local arm getting a $1.5 billion capital injection as part of a merger that will catapult the business to second place in the market.
Producing significant amounts of local content may be a challenge for HBO Max as established providers are following similar strategies, including Netflix Inc.'s plan to make more shows that target South Indian-speaking viewers. Buying up sports rights — while still holding down subscription costs — may be difficult as well due to competition for a key driver of subscriptions in the cricket-obsessed nation.
"It will be tough for HBO Max to succeed," said Abneesh Roy, executive director, institutional equities at Edelweiss Securities Ltd. "The service will need to do something different in India, given that it will be a late entrant," he said.
Saugata Mukherjee, who joined HBO Max India from Sony's streaming service late last year, will be responsible for commissioning local originals and acquiring other Indian entertainment content, WarnerMedia said in a Jan. 28 statement. He was among three content executives announced the same day, as the company prepares a wider Asian rollout.
"These are vital roles as we look to ramp up our original content and programming ambitions in this region," Clement Schwebig, WarnerMedia's managing director of India, Southeast Asia & Korea, said in the announcement.
When contacted by S&P Global Market Intelligence, WarnerMedia said it has no specifics to share on its India plans at the moment.
Globally, HBO Max carries shows from WarnerMedia networks such as Cartoon Network, Adult Swim and Turner Classic Movies. In India, Disney+ Hotstar offers some English-language WarnerMedia shows dubbed into Hindi and other local languages.
HBO Max's India debut will add to the competition for local shows, as overseas giants seek to fend off local rivals, such as Bengali-focused Hoichoi. Netflix and Amazon Prime Video, for instance, both announced last year that they were bolstering Tamil offerings.
Sony Pictures Networks India Pvt. Ltd. will also add more local shows, as well as sports rights, following its looming funding boost and combination with Zee Entertainment Enterprises Ltd.
The enlarged entity "will have significant power to purchase content and disrupt the market in the years to come," said Jayesh Bhanushali, associate vice president, research and products at IIFL.
The Sony-Zee combination, as well as the arrival of HBO Max, will likely add even more fire to the competition for Indian Premier League cricket rights.
Coverage of the competition helped Disney+ Hotstar reach 21.2 million Indian subscribers at the end of 2020, according to a Forbes India report. That is 30% of the service's global subscriber base.
The IPL rights, which were owned by Sony for a decade until it was bought by Star for 163.48 billion rupees, will be up for renewal this year.
Amazon Prime Video has also entered live cricket streaming by securing exclusive rights for a test series between New Zealand and Bangladesh in January 2022.
HBO Max will likely have to undercut Amazon Prime and Disney+ Hotstar subscription costs in order to gain market share, according to Vivek Menon, founding partner at India media and entertainment fund, NV Capital.
Indian consumers are still getting used to the idea of paying for TV content, due to the proliferation of free and ad-based video-on-demand services.
WarnerMedia tested a three-tiered plan starting as low as 69 rupees a month as part of its HBO Max India market research, according to local media, The Indian Express. The media reports "do not reflect any current plans" for HBO Max's market debut, a WarnerMedia spokesperson told local press at the time.
The company is likely to include a mobile-only offering at launch, mirroring Netflix's tiered-pricing strategy, said Jinesh Joshi, a media analyst at Prabhudas Lilladher. Netflix cut the cost of its mobile-only plan to 149 rupees from 199 rupees per month in December 2021.
Amazon Prime increased the cost of its basic plan to 179 rupees from 129 rupees per month in December 2021. That includes access to other services such as priority delivery, music and gaming, in addition to streaming.
Still, original local shows will be critical in winning subscribers for HBO Max and standing out in the Indian streaming market, according to Joshi.
"Local content is a key to resonating with a mass audience in the country," added Roy.
As of Feb. 9, US$1 was equivalent to 74.83 Indian rupees.