MUMBAI: There’s a content acquirer on the prowl in India. And it is carrying a fat purse to buy and create the content. Chinese company Leshi Internet Information & Technology aka LeEco – introduced its Super3 TV sets in India last week – and a day later a whisper campaign started that it was going to spend top dollar to build a robust OTT content ecosystem to encourage uptake of the screens by Indian consumers.

The figure being bandied about is US$200 million or Rs 1,330 crore, according to media reports. It reportedly is in talks with Netflix in the US to offer its content on its devices – which includes smart phones, TV sets, and even smart cars. And it has appointed a content head Harini Calamur whose job is to work with local producers, and distributors to build up its Indian content roster further.

Its LeEco content ecosystem was launched earlier this year (in May 2016) when it introduced its Le 1S Eco phone at a price tage of Rs 10,899 (discounted to Rs 9,999 in the early flash sale period). Existing phone owners wanting to subscribe to the content package would have to ante up Rs 450 a month separately or Rs 4,990 annually.

LeEco’s plan to sell 100,000 of these phones through a flash sale on Flipkart on 12 May was a resounding success with the ecommerce site having to shut the registrations quickly. 70,000 of its devices were sold in two seconds.

LeEco later launched the Le Eco Le 2 and Le Max 2 phones in India in July.

And finally its latest line of LeEco Super 3 smart TVs launched in early August. The Super3 X55 is priced at Rs 59,790, Super3 X65 at Rs 99,790 and Super3 Max X65 at Rs 1,49,790. These are being made available for pre-sale on Flipkart, as well as LeEco’s e-commerce platform LeMall, from 10-12 August.

It announced that the LeEco content ecosystem would be available to buyers of its Super TVs also which would allow them to access the movies and TV channels. All that they would have to do is download a software update.

The LeEco content ecosystem has content from YuppTV, Eros Now, and Hungama.

Its Yupp TV deal, under the brand Le Live, allows customers to watch Sony Entertainment, NDTV, Gemini Movies, 9X Tashan, Sun TV, Times Now, Nickelodeon, Colors, and others, in multiple Indian languages.

Its Eros Now partnership allows it to offer 2,000 plus movie titles in various languages under the brand Le Vidi.

Its Hungama relationship has resulted in the Le Music app under which users can listen to 3.5 million tracks and another bunch of live concerts (in partnership with iConcerts).

The Le View app which users also have access to consists of curated YouTube content categorized into news and politics, science and technology.

Will this strategy of bundling content with TV sets and phones work in India? Especially at a time when data usage costs are a dampener? And when cable TV and DTH are offering a slew of channels at low sticker prices. Observers doubt that the content that is on offer in the LeEco content system currently could be a driver for sparking off TV set sales; the TV sets would be bought on their own merit in comparison to the LG, Samsung, Sony, Vu, Videocon and Haier offerings.

As far as phones are concerned it could be a different story on account of LeEco’s perceived quality and lower prices.

“Whether they will use the services in their homes on their TV sets or not is a moot question,” points out a senior media observer. “The audience that is using Wifi to watch video in their homes is in nano proportions compared to DTH and cable TV. The content library is also not exclusive and alluring enough.”

Adds another media expert: “Consumption on the phone seems a more likely bet because there is some amount of on the go viewing happening in India. Mobile service providers have already resorted to a round of bandwidth cost cuts in advance of the Reliance Jio launch. But even so costs are still too high for consumers to binge watch on the phone. Maybe another round of price cuts will come to pass and that will bring costs down further. We will have to wait and watch. ”

LeEco could draw some inspiration from what it did in Hong Kong earlier this year. It coughed up $400 million for exclusive rights for the region for the English Premier League, probably the highest for Asia, to add to its catalogue of other sports and entertainment content.

It then bundled its hardware and software into a promotional pack wherein customers subscribing to the Premier League matches for two years at a cost of HK $1,690 a year got a 40 inch TV set free. If customers opted for a more premium Premier League package at a cost of HK$2,490 per year for two years, they got their hands on a 43 inch TV set at no cost to them. The super sports plan also included access to LeEco’s newly secured English FA Cup and other international sporting events such as Major League Baseball (MLB), men’s and women’s China Super League and the Copa Libertadores soccer tournament in South America.

LeSports chief executive Cheng Yizhong had then stated that “The days that users have to pay for their own device have gone and we are trying to develop a content-led platform for our users. They only have to pay for the content and the device will be given free.”

“The promotion worked very well and the company notched up HK$27 million in buy-ins in over just two days,” says a Hong Kong based media expert.

Indian media observers believe that LeEco will have to pick up rights to sports events like cricket or top Bollywood movies and these need to be exclusive for its device-content ecosystem package to work with the masses.

“Tieups with Netflix are just incremental steps as its has barely 50,000-70,000 paying subscribers and the content there is not that expansive,” says the head of an ad agency. “If it has to get into the mass market it needs to offer fiction and non-fiction shows which will then pit it in competition with the existing majors such as Star, Sony, Colors and Zee. Now that is totally a different ball game. Exclusive sports and films could be alluring as well as sticky for subscribers. Look at how well Star’s hotstar does when the cricket comes up.”

Another media observer points out that its game strategy could attract buyers. LeEco plans to put out more than 500 plus high end games on its content ecosystem, eliminating the need for consoles.

“That could be a game changer for its content play,” says she. “Let’s not worry too much however. We are in the very early days of the OTT industry’s play out in India. Go back to the late nineties: no one believed that satellite TV and cable TV would really explode the way it has in the country. Yes, the different players will make mistakes, they will course correct, they will spend money, they will lose money, they will make profits, they will course correct again. But the good thing is that another optional mode of video delivery and for entertainment is being given the push in this country.”