MX Player, an Indian video streaming service, has been acquired by Amazon

The latest move by the e-commerce behemoth to popularize its services and brand in smaller cities and towns in the important overseas market is a deal to buy major assets of the Indian video streaming provider MX Player from the regional media the giant Times Internet.

According to a source familiar with the situation who spoke with TechCrunch on Wednesday night, the two companies have come to a final agreement on the deal. The source, who spoke on condition of anonymity because the companies have not yet made a public statement regarding the purchase, said that the deal values MX Player at less than $100 million, which is far less than the $500 million valuation at which the streamer secured its most recent funding.

While Tencent is one of MX Player’s investors, Amazon is only buying a part of the company’s assets. Following the transaction’s closing, a large number of MX Player’s top executives will join Amazon.

The agreement concludes a roughly two-year search by the two companies for opportunities to combine their holdings. Over the last two years, Times Internet and its subsidiary Times Group have been trying to sell off a lot of their internet properties.

In February of last year, TechCrunch revealed that Amazon and MX Player had been discussing a merger. According to multiple people with knowledge of the situation, Sony, which was concurrently seeking to combine its India division with media giant Zee, also indicated interest in purchasing MX Player. However, problems emerging from the Zee transaction disrupted its plans.

According to a source familiar with Amazon’s strategy who spoke with TechCrunch, Amazon gains a marketing and distribution partner in MX Player that could help increase the e-commerce platform’s appeal and credibility among audiences in the smaller Indian cities and villages. These demographic groups particularly enjoy MX Player, while Amazon’s e-commerce service has historically only been well-liked by customers in urban areas. The source added that Amazon will continue to use the MX Player branding.

To gain momentum outside of India’s major cities, Amazon has been expanding the number of video streaming services it offers. For as little as $9.50 a year, the firm offers a version of its Prime subscription that includes Prime Video. Additionally, it keeps up a number of partnerships with regional telecom providers to include Prime Video in their tariff packages. Amazon also introduced a free, ad-supported video streaming service in India in 2021.

A spokesperson for Amazon confirmed that, following the publication of this report, the company has decided to buy some MX Player assets.

An Amazon representative sent a comment to TechCrunch saying, “We are always looking for ways to introduce new products and services that help improve customers’ lives.” “With the fantastic local originals and exclusive content available across our Prime Video and miniTV services in India, we’re excited to continue entertaining India.”

Along with Disney, Reliance, the company running the biggest retail chain in the country, dominates the Indian video streaming service industry. In late February, the two businesses decided to combine their media holdings in India. When combined, their apps accounted for 55% of India’s monthly active users for all video streaming providers. Based on information obtained from S&P Global Intelligence, a UBS note stated that MX Player held a 15% market share. According to the investment bank, Netflix and Prime Video each have a 3% to 5% market share.

In 2018, Times Internet paid $140 million to acquire MX Player. The app’s distinctive local video playback feature helped it become extremely popular in India despite its South Korean beginnings. Because of this feature, the app can support a large number of video file formats and is therefore very suitable with low-cost Android smartphones that are common in developing countries.

Times Internet strategically changed MX Player from a local video playback app to a full-featured video streaming platform after the acquisition. To meet the expanding demand for online entertainment in India and many other international markets, such as the U.K. and the U.S., the firm made an investment in packing the app with a wide variety of licensed and original content, including TV episodes, movies, and games.

Midway through 2020, the Indian government banned the well-known short-video app TikTok. MX Player saw a chance to capitalize on this development and released MX TakaTak, its own short-video app, to address the gap in the market. Subsequently, Times Internet sold the app with short videos for nearly $650 million to ShareChat, a well-known social media platform in India.

When a statement was requested on Thursday, Times Internet did not immediately reply.