Amazon to Launch Video Services in India as Netflix Launch Looms (Report)

The e-commerce giant has reportedly earmarked $5 billion to make the country its second-biggest market outside the U.S., including by launching Amazon Prime and Amazon Instant Video services.

Amazon.com is looking to expand in India, with the help of a $5 billion war chest, "to grow India into its biggest market outside the U.S.," India's Economic Times reported on Monday.

Quoting two unnamed people that it said were "directly familiar with the company's decision," the report added that Amazon is planning to launch its Amazon Instant Video and subscription-based Amazon Prime services later this year.

The company has started conversations with music labels and producers in an effort to source content, the report said, highlighting that in December the company hired former Sony Entertainment Networks India exec vp new media Nitesh Kripalani to lead its new initiatives.

When asked by The Hollywood Reporter for further comment, a spokesperson for Bangalore-headquartered Amazon India said, "We don’t comment on anything we may or may not do in the future."

In July 2014, Amazon India officially announced plans to invest an additional $2 billion in India to expand and "enhance the customer seller experience."

"After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations," Amazon CEO Jeff Bezos said in a statement back then. "We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate and raise the bar for customers in India. At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales. A big 'thank you' to our customers in India — we’ve never seen anything like this."

Having completed two years in India, Amazon's business is now worth at least $2 billion in gross e-commerce merchandise value, including revenue from its Amazon Web Services unit, according to the Economic Times report.

The report also quoted sources as saying that Amazon would invest most of the additional $5 billion in expanding its network of warehouses and data centers and beefing up its online marketplace to compete with local e-commerce majors Flipkart, Snapdeal and PayTM.

As reported earlier, Netflix is readying plans for a possible India launch next year. India's nascent VOD and streaming business already has local players such as ErosNow from leading Indian entertainment major Eros International, which claims over 19 million registered users.

Recently, VOD service Hooq was launched in India, backed by Warner Bros., Sony Pictures and Singapore telecom giant Singtel. The ad-free service includes Hollywood content from Sony, Warner, Disney, Dreamworks and Miramax along with Indian content from leading banners. The service is offered at a monthly price of $3.20 (199 rupees).