For LeEco, the battle for marketshare is more about videos, not phones
Atul Jain opens an app on his LeEco smartphone. The screen shows a cluster of television channels. Jain, the head of LeEco (India) clicks on one of them – it buffers, the 4G connection is patchy, but it works. “It works perfectly fine on 3G as well... You don’t have to be in front of your television anymore to see your favourite serial, or a live cricket match,” he said.business Updated: Apr 21, 2016 01:27 IST
Atul Jain opens an app on his LeEco smartphone. The screen shows a cluster of television channels. Jain, the head of LeEco (India) clicks on one of them – it buffers, the 4G connection is patchy, but it works. “It works perfectly fine on 3G as well... You don’t have to be in front of your television anymore to see your favourite serial, or a live cricket match,” he said.
LeEco, known as the Netflix of China, has done two partnerships, one with Yupp TV for soaps, serials and sports, and one with Eros International for movies. Soon, content from Eros and Yupp will be fully integrated in all LeEco phones. There is a reason for that: “The profits from devices, due to competition, are becoming zero,” said Jain. Jain plans to make money from content.
That will happen in the next six-nine months. In June, LeEco will launch its televisions in India. They have done that in China. In India, it is also spending $10 million (`66 crore) to buy server space where LeEco plans to host its content to make the experience better.
It is not only LeEco that is jumping on the content bandwagon. After all, 60% of data consumption in India happens on video.
Recently, Xiaomi, another Chinese phonemaker announced a $25 million investment in Hungama, a provider of digital entertainment. Xiaomi, like LeEco, will eventually bring in its range of television.
Indian mobile phonemakers such as Micromax are yet to do a similar tie-up. A Micromax spokesperson refrained to comment on its video strategy. Neither, Karbonn, Lava or Intex has stitched any such partnerships.
Apart from phonemakers, content aggregators are trying to get the most out of the surge in video demand. At 220 million, India has more smartphones than the US, and it has more than 400 million internet users. No wonder the world’s largest video streaming company Netflix is eying the India market. Indian companies such as Spuul, NexGTV, Hoot, Arey (by Ronnie Screwvala), and Hotstar are betting on the growing demand of video also.
What will matter in the longer run is the catalogue. “Content is a function of capital. Companies such as Netflix can pay a lot more, but not one company will have all the content,” said Rajiv Vaidya, CEO of Spuul. Companies such as LeEco and Xiaomi will be looking for large content aggregators, and even exclusive content.
Some content aggregators have started making exclusive content to lure viewers, NexGTV is one of them. “We are working with Priyanka Chopra to make 10-15 minute episodes. There is another exclusive show with Imtiaz Ali,” said Abhesh Verma, CEO of NexGTV, which offers content on subscription.
“Cricket and Bollywood is big,” Jain said. LeEco will also evaluate buying rights to broadcast IPL over its screens.