Next on Netflix’s India strategy: Lower prices, more local content
MUMBAI/BENGALURU: Netflix Inc.’s Indian operation drew attention in a surge of international subscribers in the third quarter, but it faces fierce competition and a difficult cultural conundrum to make inroads with the country.
In a few months, video streaming service has launched a blockbuster crime thriller, been sued over comments about a former Indian prime minister and seen the future of two of its hit shows threatened by the #MeToo movement.
Helped by a roster that includes movie franchise Baahubali, it has won fans among a young, tech savvy middle class and chief executive Reed Hastings has said India could deliver its next 100 million subscribers.
Local industry players, however, say Netflix’s strategy of pricing close to rates it charges in developed markets will see it struggle against domestic competitors like Hotstar.
Amazon, with a trove of original Indian content, offers movies and shows free to members of its Prime service.
“With the prices that we’re at, we’ve got a long runway ahead,” Netflix chief product officer Greg Peters said after Tuesday’s third-quarter results. “Now we’ll experiment with other pricing models, not only for India, but around the world. ”
The streaming giant has a library of local content comparable to rivals and scored a big hit in July with Sacred Games, a hard-boiled thriller built around Saif Ali Khan.
Like other US entertainment companies, it has identified the need to create local content as important in winning viewers. But it has run into trouble with the studio that produced Sacred Games disbanding earlier this month in a cloud of sexual harassment allegations against one of its partners, and the show’s lead writer, Varun Grover. Grover has denied these claims.
The service’s monthly fees are almost identical to what it charges in the US—₹500 for a basic plan, ₹650 for a standard plan and ₹800 for premium.
Hotstar in comparison offers its premium service at ₹999 for the whole year.
None of the companies provide subscriber numbers for India, but media executives say Netflix’s numbers are probably less than a million.
One analyst asked Hastings on Tuesday how much will Netflix have to tweak the model to achieve success.
“We’ll go from expanding from English to Hindi to many more languages to more pricing options, more bundling,” he said. “There are over 300 million... households and almost twice that in mobile phone subs. We’ll take it a million at a time and figure out how to expand the market as we grow.”