Why MX Player may be a good fit for Amazon

After much to and fro, e-commerce giant Amazon.com has signed an agreement to purchase some assets from the video streaming service MX Player that belongs to Times Internet Limited. Though people familiar with the development said the transaction is not yet complete, media analysts are pegging the deal at around $45 million. Amazon runs the paid subscription-based OTT service Prime Video and free video-on-demand service miniTV in India.

The murmurs around the deal were earlier bolstered by Sony’s petition in the Delhi high court for protection of its ₹31 crore dues owed by MX Player. The court said if any assets of MX Media & Entertainment Pte Ltd (Singapore) are sold, the money owed to Sony (now called Culver Max Entertainment) must be preserved from the sale proceeds. MX Media owns MX Player in India.

Aaron Solomon, managing partner, Solomon & Co., a full-service law firm, said Sony was concerned about its dues as liquidation proceedings were filed against MX Player’s parent company in Singapore which owes money to other lenders. “When its main assets, the Indian subsidiaries are sold, the money would go to Singapore. Perhaps when Sony learnt that Amazon is coming in as a buyer, it went to court to protect its dues,” he explained.

Solomon doesn’t see any impact on the impending deal if the sale proceeds are adequate to settle lenders’ claims. He said MX Player acquisition makes sense for Amazon which is looking to expand its base in smaller towns.

Broadcasting industry veteran Anuj Gandhi said MX Player fits in with Amazon’s free miniTV launched three years ago. MX Player, known for shows like Aashram, Campus Diaries and Dharavi Bank, had 300 million users worldwide and 200 million in India. “But that was at its peak. Since then, the numbers have dropped as the app lost the plot. Even so, it has a user base of nearly 100 million which may be invaluable for Amazon,” said Gandhi.

“Imagine if 100 million mobile phone users who have the MX Player app in India find it converted to miniTV overnight boosting Amazon’s user base,” he added.

Times Internet Ltd did not respond to HT’s queries on the proposed deal. Without commenting on the deal, an Amazon spokesperson said the company is always looking for ways to introduce new products and services that help improve customers’ lives.

Media analyst and Elara Capital’s Karan Taurani said the deal can be used to enhance Amazon’s miniTV offerings as MX Player has invested both in original shows and syndicated partnerships. “It has a large subscriber base because it’s free,” Taurani said.

To be sure, both MX Player and miniTV target viewers in a similar age group. In a blogpost Amogh Dusad, miniTV’s content head said the service targets 18 to 34 year olds with popular shows like Half CA, Highway Love, Campus Beats and Hip Hop India that resonate with their lives. miniTV is available on Amazon’s shopping app, Fire TV and Android TV.

Kumar Awanish, chief growth officer at Cheil India said a few years ago MX Player was big and attracted advertising. “But then it lost the momentum. Their syndicated content was available elsewhere and the exclusive content was limited. So, the platform had no differentiator,” he said.

However, the platform still has value given that streaming services are eyeing ad-supported tiers since paid OTTs do not cross a certain threshold of subscriber numbers, Gandhi said. “There is no other way to grow except by getting a share of the digital advertising money which is still increasing. If you do not claim a stake in that, digital advertising will go to big tech companies like Google and its video platform YouTube, Meta and its Instagram and e-commerce sites,” Gandhi said.

Of the ₹55,000 crore digital advertising, 80% goes to big tech and the remaining 20% is what the others are after, said Awanish. However, he warned that digital advertising growth rates may slow down to 14%-15% or lower in the next 4-5 years.

On the deal Awanish said the motivation behind such mergers is to wrest more market share and acquire scale. It’s not always about synergy or potential. At 30 million subscribers, Amazon isn’t small. “So, it’s a game of market dominance,” he added.