After making all the wrong moves in this full-court-press country, Netflix is trying to mend its course, by riding on the back of internet revolution in India.
Earlier this year, Netflix (NASDAQ:NFLX) CEO Reed Hastings made claims that his company aims at pocketing the next 100 million subscribers from India. However, dreamy-eyed Hastings didn’t gauge the time it might take to achieve this ambitious number. This is evident because, in harsh reality, the streaming giant is far less than what it wishes to achieve.
Netflix, till now, didn’t realize the full potential of the Indian market, and hence didn’t even gauge it as much of an opportunity during its first big step in 2016. Alike a pat on the shoulder, it gained the world’s largest paid online TV network by taking advantage of the proliferation of high-speed internet for streaming videos.
However, Netflix’s average monthly price in India of 500 to 800 rupees is double the average TV pay. For people living in the bargain-basement, this was too much. In addition to the woe, the vast majority of videos on Netflix India was in English, although the hype was on for Hindi or Tamil.
Yet, on a better and sound note, in the past two years, local telecommunications companies invested billions of dollars to bring India online. As of now, more than 150 million people have broadband connections of sorts.
The Growth of Netflix In India
Netflix’s reign and dominance over television’s old business model began seven years ago. By producing cult hits like ‘House of Cards’ and ‘Stranger Things’ with a budget of $8 billion, it is disrupting the entertainment business across the world.
According to reports by CNBC, With over 117.5 million subscribers in over 190 countries consuming 140 million hours of TV shows and movies every day, Netflix made an upsurge in its streaming revenue by 36% to over $11.6 billion. This marked an addition of 24 million new members. As a repercussion, the company could clap hands on a market capitalization of $120 billion, with double the growth of its share price in a year.
There’s no denying that India holds strong potential for streaming media players. With an estimate of 500 million smartphone users, forecasts also predict that the demand for entertainment will grow rapidly. This will happen since there are estimates suggesting that there will be 650 million internet users by 2020.
India positions itself as one of the top three markets for Netflix in terms of mobile usage. Per contra, with relatively low speed and the high cost of internet connection, many users are discouraged to stream high-quality videos. Netflix here is employing a new program to resolve this issue, to enable faster streaming and less network congestion. This is dubbed as “Open Connect“.
Reports claim that Netflix is may spend nearly $300 million on Indian-centric content in an attempt to garner more users. This is accounted to be an amount much higher than Amazon’s $75 million investment into content creation, aimed at the localized sphere.
Competition and Netflix
India positions itself as an untapped land for global tech giants. With huge population – which is most opportune – the country has become the nerve centre for multinationals to invest in eastern markets.
The entertainment industry can never gauge a loyal viewer base since with mood changes, the TRP value fluctuates too. Currently, TV and movie buffs in India are resorting to BoxTV, Google’s Movies and TV app, Hotstar and many others.
One thing which is crystal clear is that Netflix has to make a solid impact in this entertainment network. Prices are sure to play a crucial role. However, Netflix has a cutting-edge over other cheap services since not even one of them can create exclusive content. Again, not all services offer seamless streaming on all four screens, namely, smartphones, tablets, laptops and televisions. Hulu, Showtime and HBO Now, which are here to follow suit and enter the Indian market may lock horns with Netflix.
Given the fact that, Digital India is gladly spreading down the red carpet for anything and everything that can elevate the lifestyle of Indian consumers, the game to dominate entertainment business is, perhaps, here for long now.