Times Internet (TIL) has acquired video platform MX Player for Rs 1000 crore. Developed by South Korea-based app publisher J2 Interactive, MX Player is a video player app like VLC, QuickTime Player etc, and now it is planning to begin streaming exclusive content as an OTT platform.

Times said in a statement that MX Player is investing into original, content, with an emphasis on  Hindi and regional production. In its first year, the platform will launch with more than 20 original shows and over 50,000 hours of premium content. Meanwhile,  MX Player will also continue to run its offline video playback features that are currently available.  TIL claims that MX Player currently has 350 million install base in India with a monthly active user base of 175 million users.

Gautam Sinha, CEO, Times Internet said in a statement that, “We are building a content experience with the quality of mainstream media, but designed specially and exclusively for Indian millennials that are digital-first.”

Note that this is Times’ second bet for video streaming business. Back in 2012, it had launched BoxTV, a video content destination modelled on kinds of Netflix, offering premium content, TV and movie video streams across devices, including web browsers. However, the media company shutdown the service as it could not make money. In this interview, TIL’s Gautam Sinha said that, “the unit economics were such that it did not allow us to earn money. While we have preserved the technology, we have moved out of the business. Video is important. However OTT players currently have no control on cost of content, be it original or acquired. Also cost of customer acquisition is very high. With only two ways to monetise — advertising and subscription, with the latter yet to find enough number of takers, it is difficult to get return-on-investments”.

Siladitya adds: Times Internet has taken an interesting approach (or bizarre if we want to be less charitable) to gaining a foothold in the video streaming space.  Firstly, MX Player is popular with its users as it is a solid offline player which supports a large number of file formats, which means it will play almost any video file you throw at it. But the belief that people would use the same app to stream premium content (or ad-driven free content) is something we are unsure about. Popular media players like RealPlayer and Window Media Player, have in the past tried their hand at offering streaming content, but none of them ever really caught on. The only outlier in this regard is iTunes but that was due to a perfect storm of hardware (iPods) and content (all major labels offered their music content on iTunes).

Video streaming competition

Video streaming has now become the most likely reasons for users in India going to the internet, and players in the segment have responded. Besides major players like Youtube, Netflix, Amazon Prime, etc, other players too have mushroomed as they want to grab the pie. There are prominent players like Hotstar, Voot, AltBalaji, Zee5, Vodafone Play, Airtel TV, JioCinemas, so-on-and-so-forth. Also, Instagram recently announced its entry into long-form video with a new app IGTV, which will also run as a separate tab within the Instagram app.