Flipkart Eyes Stake in Star India’s Hotstar to Step Up Battle Against Amazon

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Walmart Inc’s Flipkart has held talks to buy a stake in Hotstar, Star India’s video streaming service, as part of India’s largest online retailer’s strategy to bet big on video content and attract more Internet consumers and shoppers.

Flipkart’s reported talks with Hotstar come at a time when there is high demand in the country for video streaming services like Netflix and Amazon Prime Video, which offer original content shows like Sacred Games and Breathe.

Hotstar, owned by Twenty-First Century Fox’s Star India unit, launched in India in 2015, about a year ahead of streaming giant Netflix and nearly two years ahead of Amazon Prime Video debut in the country. It remains well ahead of both in terms of its popularity with domestic users. Flipkart already has some ties with Hotstar, has launched a new video advertisement platform with Hotstar in July.

Hotstar is also one of the Internet partners for Flipkart Plus, its customer loyalty programme competing with Amazon Prime. Walmart acquired about 77% of Flipkart for nearly $16 billion in what was the US retail giant’s largest-ever deal and a move to take on arch-rival Amazon in a key growth market.  Hotstar is the biggest OTT platform in the country. As of late December last year, Hotstar had monthly active subscribers base of 75 million.

Under the stewardship of chief executive Kalyan Krishnamurthy, Flipkart has identified content as a massive business opportunity for the future and has been attempting to bet big on that, without having to build a Prime Video-like service from scratch. Flipkart’s bet on content has also been driven by the success of services such as Prime Video and Netflix in India. Over the past six months, Flipkart has also held discussions with other large streaming services.

Flipkart has displayed renewed aggression towards large investments or outright buyouts of Internet and tech startups, as the e-commerce firm looks to diversify its business and reduce its reliance on a few categories such as smartphones and large appliances.

Experts say that the talks with Hotstar are important when video streaming market is growing exponentially in the country. Walmart is aggressively following the market trend and changing itself as per consumer requirements. Original programming is expensive, but Walmart isn’t afraid to spend money to ensure it remains competitive with Amazon.