Amazon India as part of their global expansion strategy may start offering music, movie and video streaming services this year. The company is evaluating the viability of these services in India.
Amazon India has initiated talks with several film production houses like Yash Raj Films and Eros International, holding rights of several films. The content is very important which forms foundation for the services offered by Amazon India.
Amazon India started building necessary content for the rollout of Amazon Prime services in India sometime this year. After the launch of Prime Services, Amazon India plans to bundle music, movie and video streaming services into the services. It has increased employee headcount at various levels of hierarchy and planning to increase the headcount to more than 14,000 by the year end.
Amazon Prime is subscription based services offered for a fee. In the US, Amazon Prime will charge $99 for each subscription. In the offering, Amazon offers unlimited streaming of entertainment services like movies, music and TV Shows thru Prime Instant video services. Subscribers can also borrow books thru the lending library. These services will be advertisement free. Amazon has bundled free shipping for two days in a year, any number of products will shipped free on those days.
Amazon Prime will be free for 30 days trial period and changes to subscription mode for members have to pay $99 per year. The member can cancel subscription at any given point of time. After the launch of Prime Services in the US, Amazon said 10 million subscriptions have been received during holiday season for month long free trial.
As per internal estimates, out of 10 million subscriptions 70% will turn as members after completion of trial period. Around 7 million subscribers will used their paid subscriptions. Amazon has developed a separate app for Amazon Prime. With the help of app, ordering will become much easier for the people who are on the move.
As per Amazon sources, 60% of their orders is received by smartphone devices which hints that people were on the move.Total sales have been doubled compared to previous years.The same day delivery services have been expanded to several cities in the US during August 2014. Efforts has not been spared by Amazon to deliver the products on ultra fast mode same day delivery services during the holiday season.
Amazon efforts to shore their profits need to be commended at this juncture of time. Profit margins have been hit for Amazon, due to continued spending on new areas which are non core business of ecommerce. Some of these ventures are fruitful and some are flop due to various reasons.
In India, competitors like Flipkart have launched subscription services like Flipkart First. Flipkart First is a subscription services which offers services at 500 INR, converted to $8.50 per year. Flipkart had offered a free 3 month trial to selected 75,000 members during 2014.
Flipkart customers can avail exclusive benefits like free shipping on all orders, same day delivery and others. Flipkart claims its e-commerce marketplace offers over 10 million products from 70 categories with more than 3000 sellers. Each month they are shipping more than 5 million consignments.
Flipkart claims that it has first move advantage in the market. It would be interesting to see how the Amazon Prime services will be bundled in India with the content and products.