The Times Internet-owned video streaming company MX Player is reportedly on the verge of being acquired by the US-based e-commerce giant Amazon, a development that might significantly impact the Indian over-the-top (OTT) sector. Months of speculations and delays culminated in an all-cash acquisition, estimated to be worth just over $100 million. This article offers a comprehensive analysis of how this acquisition might impact the market, Amazon’s business strategy, and MX Player’s future.
Credits: Broadcast and CableSat
The Genesis of MX Player
From Video Player to Streaming Giant
Launched as a basic video player application in 2011 by a South Korean company, MX Player began its adventure. Seeing its potential in 2018, Times Internet bought it for roughly $140 million. With this acquisition, MX Player became an ad-supported video streaming service and established itself as a strong competitor in India’s over-the-top (OTT) market with a wide range of content.
Funding and Valuation Milestones
At the beginning of 2019, MX Player was among the biggest OTT investments available, thanks to an impressive $110 million capital round led by Tencent. After this funding, the platform was expected to be worth $500 million. Thanks to CEO Karan Bedi’s aid, MX Player has over 150 million active users in India. Bedi has been leading the company since 2017. The website has had financial difficulties despite its popularity; in FY22, it reported a $100 million net loss on $36.8 million in revenue.
Strategic Divestments by Times Internet
Over the course of the previous year, Times Internet has been actively consolidating its portfolio by selling off a number of properties, including MX Takatak, Dineout, MensXP, iDiva, and Hypp. This plan is supported by the sale of MX Player, which frees Times Internet to concentrate on its main business operations while guaranteeing that MX Player finds a reliable and encouraging new home in Amazon.
Amazon’s Motivation and Strategic Fit
Enhancing MiniTV and Ad-Supported Services
Amazon’s interest in MX Player is driven by its ambition to bolster its ad-supported MiniTV service in India. By acquiring MX Player, Amazon gains access to an extensive content library and a large, engaged user base, positioning it to enhance its presence in the highly competitive Indian OTT market.
Resumption of Acquisition Talks
Initial discussions between Amazon and MX Player encountered obstacles due to due diligence and valuation discrepancies. However, negotiations resumed earlier this year, leading to a successful alignment on these critical aspects. The completion of due diligence has set the stage for this strategic acquisition, now in its final stages.
Potential Impact on Users and Content Creators
Opportunities for Content Creators
Content producers stand to gain a great deal from this acquisition. Because of Amazon’s extensive platform and worldwide reach, creators may have additional opportunity to present their work to a wider range of audiences, which could increase their visibility and financial gain.
Financial and Operational Implications
Addressing Financial Challenges
For MX Player, the acquisition by Amazon offers a solution to its financial challenges. Having sought an acquisition for nearly a year due to financial struggles, this deal brings the much-needed financial stability and aligns MX Player with a global leader known for its technological and operational expertise.
Integration and Leadership Transition
Senior management from MX Player, including CEO Karan Bedi, is anticipated to join Amazon following the acquisition. This move guarantees continuity and capitalizes on the management’s experience propelling the platform’s expansion under the vast and resource-rich wing of Amazon.
Conclusion
The strategic acquisition of MX Player by Amazon highlights how dynamic the Indian OTT sector is. With this agreement, Amazon not only solidifies its leadership in the ad-supported streaming market, but it also gives MX Player the stability and resources it needs to succeed. This acquisition underscores the significance of strategic alignments and the potential for creativity in providing millions of viewers with diverse and captivating content, particularly as the Indian digital content ecosystem continues to change.
