Marking its entry into India’s USD 500 million on-demand video streaming industry, Chinese internet giant Tencent said Wednesday, it has led a USD 110 million round in MX Player, a video streaming service owned by Times Internet, India’s largest digital products company.
Times Internet also participated in this funding round, which MX Player claims is one of the biggest investments in the digital streaming space in the country.
Launched in 2011 by South Korean firm J2 Interactive as a video playback app, MX Player’s majority stake was acquired by Times Internet in June 2018 for USD 140 million. At the time, the Korean app claimed it had 175 million monthly users in India. Earlier in February, Times Group relaunched the app as a video streaming service, directly competing with global giants like Netflix, Amazon, and Hotstar.
MX Player claimed its on-demand video-streaming service currently offers “150,000 hours of content from TV, web-series, movies, and music videos across 10 languages including over 20 MX original and exclusive series.” It boasts of about 100 million daily active users, and 275 million monthly active users globally.
“Within a relatively short period of time, MX Player has leveraged its vast user base and rich content library to be one of the leading video-streaming services in India,” Jeffrey Li, managing partner, Tencent Investment, said in a statement. “As the smartphone user base continues to expand in India, we look forward to working with MX Player to further grow its platform by delivering original content and differentiated user experience.”
In over-the-top space (where a service is provided over the internet, bypassing traditional distribution channels), besides its recent funding in MX Player, Tencent had led a USD 115-million round in music streaming service Gaana in February 2018 and USD 175-million funding in messaging service Hike in August 2016.
MX Player plans to use the funds in technology, talent, and content, it said. In the statement, Karan Bedi, CEO of MX Player, called Tencent’s investment as a “glowing endorsement” to its growth and future potential.
“Our vision is to be one of the world’s largest entertainment platforms, serving our users across their online entertainment needs, starting with streaming video and beyond,” the statement said.
Indian video OTT market is expected to reach a market potential of USD 4.5 to USD 5 billion by 2023 from half-a-billion dollars in 2018, according to research firm Boston Consulting Group (BCG). It expects the country to have 40 to 50 million paying subscribers by 2023, while about 600 million Indians would consume AVOD (ad-supported video-on-demand) such as YouTube.
The video OTT segment is becoming fiercely competitive. It witnessed a 3.5x increase in the last six years growing from just nine players in 2012 to 32 such services in 2018, BCG report said. In 2019, Chinese file sharing app ShareIt and MX Player jumped into the race.
Over the last five years, Tencent has made diverse investments in big names such as Flipkart, Ola, Swiggy, Byju’s, Dream11, and Udaan. Some of its smaller bets include USD 35 million round in Bengaluru-based digital banking company NiYO, along with Horizon Ventures and JS Capital, and USD 25 million funding in ledger app Khatabook, with participation from GGV Capital, Sequoia India, and Y Combinator among others.