Position Of Netflix In The Indian Market

Netflix entered to Indian market at the beginning of 2016. At the launch event, Hastings mentioned, “Netflix was the first to allow ‘binge watching’ and give consumers control over entertainment. We have helped consumers discover [the] value of entertainment on demand.” This was the advantage of Netflix, while the problems the company had to face were price-sensitive customers, slow internet speed, content and piracy issues. Furthermore, Netflix offered a one-month free trial for new users, partnered with one of the local film studios to produce its original series in India and expanded its content that is in available in several local languages.

Reed Hastings believes that Netflix’s next 100 million subscribers will come from India. While there’s certainly a case that Netflix could hit these lofty subscriber goals, it’s worth noting that the company isn’t simply going to waltz in and be the leader. Many of the countries took the cue from Netflix’s success, and released home-grown streaming services of their own over the past several years. Then there’s the matter of big-name competition like Amazon Prime Video. If Amazon Prime Video entered the Indian market, of course it would be vying for their piece of the streaming pie. Although facing with tough competition, the company would have built a heavily engaged user base that uses Netflix more frequently and for longer periods, as compared to users of other streaming platforms – as evidenced by higher viewing sessions per user and viewing session duration. Netflix may well achieve these lofty benchmarks.

In late 2018, Guggenheim Partners analyst Michael Morris made the case that the company’s customer base would more than double, topping 285 million subscribers by 2023. One facet of his argument was predicated on improving broadband infrastructure and a growing population of upper-middle class smartphone users in India. In mid-2019, Netflix introduced a less expensive mobile-only plan to customers in India, and it could expand that strategy into additional low-income markets. Although Netflix recognized the need for local content and priced itself significantly lower compared to its other markets, it has not been able to capture significant market share in India. Chief Product Officer Gregory Peters stated that the company “needs to have a lower price offering to improve accessibility.”

However, the company — which prides itself being a content-first company — needs to view local content in a more nuanced manner. Even though Netflix produces high-quality local original content, most of the content appeals to users from cities, i.e. those from affluent, urban and educated backgrounds. Some of Netflix’s ‘local’ content is more foreign to the majority of Indians than ‘foreign’ content is to Netflix’s India user base in Tier 1 cities. Although Netflix has announced some regional language content, the company still lags behind its Indian counterparts and must look to applying an India-first lens to content production as well.