At half a million subscribers, Netflix still a ‘premium’ service in India
Even though Netflix’s popularity stays restricted to the premium-end of the subscriber spectrum in India, it does not seem to have a near-term strategy to salvage market share from Prime Video, which is actively amping up regional content.
Netflix, a leading global streaming service, is picking its regional programming in India selectively, and doesn’t seem keen to expand into regional programming at a pace followed by its top competitors such as Amazon Prime Video.
“We are not a generic ‘video’ company that streams all types of video”, Jessica Lee, Vice President for Communications at Netflix, Asia told HT on being asked if the company plans to foray into live broadcasting of sports or news. “Netflix is a movie and TV series entertainment network, offering original series and movies, in addition to a broad variety of licensed programs”, she added.
Unlike most other digital content firms which tailor content to the demographic they operate in, Netflix’s programming is based on “taste communities”. Even Netflix’s first India-original Sacred Games, which is set to debut this year, is a show CEO Reed Hastings expects to “expand globally.” In an interview to Livemint, Hastings said it “certainly helps” if a show is Indian to work with Indian audiences, but the focus, is on doing “an original here and have it be popular in the US and Europe.”
“Our Indian members enjoy many of the same shows that Netflix members around the world enjoy, such as Stranger Things, Narcos, The Crown and Love Per Square Foot…They are also more likely to devour a TV series over three days, at a faster pace than the rest of the world [the global average was four days]”,Netflix’s Jessica Lee said.
Netflix’s adherence to a global programming catalogue for its Indian audiences comes in contrast to Jeff Bezos-owned Amazon, whose digital offering Prime Video is actively pushing towards content in Hindi and other local languages on its platform.
“Amazon Prime’s efforts to invest in Indian content along with a highly subsidised offering is enabling it to garner viewership. Netflix is still a more urbane choice. Still known for its international content, its popularity has been restrained”, said Vidya S Nath, senior director, digital media practice, Frost & Sullivan.
Home-grown streaming companies like Hotstar, Alt Balaji and Voot, are “pushing home-produced content as well as gaining popularity on the back of catch-up television on their apps”, she added.
The Indian streaming market grew 116% in 2017 in terms of the number of subscribers, says Tim Westcott, global data provider IHS-Markit’s research director of channels and programming. But Netflix isn’t even close to leading that growth even after more than two years since it has entered the field in India.
India accounted for only about a percent of the 23.78 million members Netflix added worldwide in 2017, according to IHS-Markit.
But even though Netflix’s popularity stays restricted to the premium-end of the subscriber spectrum, it does not seem to have a near-term strategy to salvage market share from Prime Video. “India is still a long-term market for Netflix”, Westcott told Hindustan Times by email. Gregory Peters, Netflix’s chief product officer, confirmed he has “no near-term plans” for India in the company’s Q1 earnings con-call.
A mass player in its largest market USA, Netflix is “unlikely to move away from being a premium service in India”, said Nath.
Perhaps for good reason: Despite being the number 5 player in the Indian streaming market by viewership, behind Hotstar, Alt Balaji, Eros Now, and Amazon Prime Video, Netflix still rakes in the most revenue, according to iOS App Store and Google Play data analysed by App Annie, reported Livemint. The mobile data and insights firm said Netflix leads the list of streaming apps by revenue in India, as of June 2017. App Annie didn’t ascertain the actual revenue netted by the companies.
“In India, it’s hard for [Netflix to flourish] until they break down pricing, but Netflix’s vendor has decided that the company will not have differential pricing across different regions. Even half a million paying active subscribers every year, which is set to increase at 10% is not necessarily a bad strategy for them,” said Nath. Netflix subscriptions start from ₹500 a month for a basic plan, and go up ₹800 per month for a premium plan.
Amazon, in such a situation, is more favourably positioned to act as a mass player because of the wide range of products and delivery infrastructure that Prime offers. “Amazon is a retailer first and foremost so Video is more of an add-on rather than a driver of Prime in its own right”, said Westcott.
By end-2017, Amazon Prime Video had 6,10,000 users, while Netflix only had about 5,20,000 subscribers, according to IHS-Markit.