India on their minds

On January 6, Netflix, the popular American streaming service, completes three years in India. The date marks a turning point for the company, as in 2016, Netflix added to its kitty new countries such as India, Russia, South Korea and Turkey, bringing its total tally after eight years – Netflix was launched in 2011 – to 190.

Three years back, India had about 300 million odd Internet users and India’s telecom sector witnessed a shakeup with the entry of a new service provider that further fuelled data consumption in a country still plagued by “no network zones” and “deadspots”. Today, over 250 million Indians watch video online.

Headquartered in Los Gatos, California, Netflix first started its international journey with Canada and Latin America. It entered the UK in 2012 and other European markets such as France and Germany by 2014. In its final phase of expansion in January 2016, the service went live across 130 countries including India.

When India joined the Netflix club three years back, the company had changed. Its user base was no longer restricted to only English-speaking subscribers. Nor was it just American. It began to produce multi-lingual content from all over the world.

“As Netflix expanded internationally, the user base that speaks English as its primary language is decreasing. More and more of the Netflix population is watching its content with dubs or subtitles,” says Erik Barmack, its vice-president, international originals. International shows such as Suburra, an Italian political drama, 3%, a Brazilian dystopian thriller and Dark, a German thriller, among others, have gained popularity on Netflix across the world, including India.

“We started our international business in Latin America,” recalls Ted Sarandos, the chief content officer of Netflix, “and both Mexico and Brazil were expensive markets. So, we took time to figure out the different specificities of these markets.” This is the strategy for India too, it seems.

The viewers

In India, Netflix has approximately 2 million viewers (the number of viewers doesn’t equate to the number of paid subscribers), less than 1 per cent of India’s total internet user base of 500 million.

Last year, Netflix was ranked No. 8 among video-streaming apps in terms of monthly active usage on the basis of data collected across Android phones by the app analytics firm, App Annie Inc. Netflix’s viewership number compares favourably with the overall viewership for premium English language TV channels like Star World and Colors Infinity in India, which have a similar audience profile.

“Netflix has done one thing very well. They have identified their audience, the high-end Indian user, and are addressing their needs both in terms of quality of content and the volume of new content being released on the service. They are not bothered about the masses,” says Ashish Pherwani, partner, media and entertainment, at consulting firm, EY.

Downloading, which is driving Netflix consumption, is also a much more popular feature in India than it is in the US or Europe. Netflix usage here is higher on mobile devices and laptops compared to television; globally, around two-thirds of Netflix viewing is on a TV.

“In India, our viewers love mobile viewing while commuting to and from office. So, the viewership at 9 am and 5 pm is pretty high,” says Sarandos, who watches about four hours of Netflix a day.

The average revenue per user (ARPU) extracted from India indicates the importance of India in the global scheme of things for most international companies, says Sameer Nair, who heads the Aditya Birla Group’s entertainment business at Applause Entertainment. “Given our population numbers, India tends to be a volume rather than value market, so it becomes a combination of ARPU x Number of Users that will determine how critical India is or will become.” A key to Netflix’s popularity in India, as elsewhere, however, has to be about content.

After Sacred Games

Six months ago, Netflix’s hit shows, House of Cards and Narcos released in India and hoardings were plastered across the country. Its big Indian show, Sacred Games, too, got substantial media coverage.

“Shows like Rain out of Denmark or Dark out of Germany have travelled all over the world as did Sacred Games. So you are just seeing this mixing of cultures that is unprecedented. In India, Sacred Games has created a level of awareness for Netflix that didn’t exist before,” says Barmack. “It demystifies the notion that shows that are a hit with people have to come out of Hollywood.” Just like House of Cards was that first big moment for Netflix globally, Sacred Games was that moment for Netflix in India – and abroad. “Two out of three of our viewers who watched Sacred Games were outside of India,” said Todd Yellin, Netflix’s vice president, product innovation, in an earlier HT report.

As traditional barriers to distribution disappear thanks to the internet, the likelihood of Indians loving sci-fi thrillers like Stranger Things is just as high as Americans taking to crime dramas such as Sacred Games. “Content from India will have more global reach than it’s ever had before,” says Sarandos, who has worked at Netflix for over 18 years since 2000.

In India, so far, Netflix has developed measured content relationships, commissioned shows and indulged in selective acquisition of licensed content. But a quick glance through their home page shows Indian films and originals in local languages have gained prominence over the last 6-8 months.

In the Indian streaming ecosystem, both Amazon Prime and Hotstar, however, have a vast library of Malayalam, Tamil and other south Indian films, points out entertainment writer Aseem Chhabra. “Amazon Prime also gets the leg up for the pace at which they manage to get new releases on to the service quickly.”

Netflix launched in India with limited Indian content with a movie catalogue of 75 film titles in Hindi and some in Tamil. The company claims it has since doubled its India catalogue every year.

Local content

Arch rivals Netflix and Amazon have extended their battle to the Indian market, where they have set aside ~2,000 crore each for acquiring content to attract subscribers. Amazon Prime ranks number four in terms of monthly active users on the basis of data collected across Android phones by app analytics firm App Annie Inc.

India is Netflix’s fastest growing market in terms of the investment towards local content. Less than six months after Sacred Games, cricket drama Selection Day, based on Arvind Adiga’s book, shot in Mumbai, released on Netflix on 28 December to mixed reviews. Chhabra, however, summarises Netflix’s Indian content library as a disappointing mixed bag where Sacred Games was the only bright spot. “Ghoul, to my mind, was flat and weak. Little Things has not generated much curiosity or buzz,” he says.

House Of Cards Season 6 (Photo courtesy: Netflix)

Big money

Netflix has earmarked over Rs 600 crore for original content in India. It has announced 14 India originals, the highest number of shows commissioned outside the US, UK and Japan at budgets similar to that of Bollywood films. Last year saw the first chunk of big money being deployed behind Indian content on streaming services.

The rising cost of content doesn’t worry Sarandos. “In the case of The Crown, everyone talks about how much it cost but so many people signed up to Netflix to watch it all over the world. It’s a great use of money,” says Sarandos.

Eighty-two percent of the users in the Indian market are currently engaged on advertising-led video-on-demand platforms (AVoD) versus 18% who pay for content on subscription-led (SVoD) services, according to a report published by Boston Consulting Group titled Entertainment Goes Online, released in November.

The report estimates that by 2023, there will be 40-50 million users paying for SVoD content while 600 million will be engaged on AVoD platforms.

At present, Hotstar, part of Rupert Murdoch’s 21st Century Fox Inc., is the market leader, with between 75 million and 100 million active users a month, helped by rights to key cricket broadcasts including the popular Indian Premier League.

At one point, paid subscription to watch streaming content used to be very niche. It’s very mainstream now. “Netflix is on that same trajectory. Over time, we will get bigger and bigger,” says Sarandos.

Three years might sound like a long time but the company is “still very new” in the country, says Sarandos. “When we started the business in the US, most of our early programming was liked on the coast, basically in California and New York. Then we just programmed to the middle. That’s what we are doing here in India,” he explains.

It remains to be seen if Netflix can go beyond the top metro cities like Mumbai and New Delhi.

It’s hard to critique the leader, says Nair. “They’ve chosen to move at their own pace and operate on their own terms... Having understood the market, I guess they will up the ante when they need to.”

 

Popular Netflix titles

House of Cards

House of Cards took its final bow in November 2018, with a shortened final season of eight episodes wrapping up the story of Claire Underwood (Robin Wright) following her ascension to the Presidency previously held by her husband Frank (Kevin Spacey). Perfectly suited to the then-new concept of binge-watching with its on-edge storytelling, season one of House of Cards set the bar high when it was first launched in February, 2013.

Stranger Things

Stranger Things is a science fiction series released in July 2016, six months after Netflix went live all over the world across 190 countries. The show is a love letter to the VCR era, a satisfying mash-up of all the scary and speculative movies you loved when you were 12.

Sacred Games

Based on Vikram Chandra’s novel, Sacred Games was Netflix’s first big India moment. The Mumbai story tackles all the big themes: crime, friendship, betrayal, love. In the making for over two years, it released as an 8-episode series on July 6. The second season of the show is already underway and is expected to release later this year.

The Crown

The Crown (released in November 2016) tells the inside story of two of the most famous addresses in the world -- Buckingham Palace and 10 Downing Street -- and the intrigues, love lives and machinations behind the great events that shaped the second half of the 20th century. Two houses, two courts, one Crown.

Upcoming titles on Netflix

With 14 Indian originals and 13 original movies commissioned, India is the fastest growing market for Netflix where content is concerned. A majority of these upcoming titles will release on Netflix in the calendar year 2019.

Bard of Blood

Set against the backdrop of the Indian subcontinent, Bard of Blood follows the story of expelled Indian intelligence agent Kabir Anand who is recalled from his new life as a Shakespeare professor in Panchgani to save his country and long-lost love. Actor Shahrukh Khan’s Red Chillies Entertainment is producing the show which has been shot in Leh.

Baahubali: Before the Beginning

Based on India’s highest grossing film franchise Baahubali. The two season order, Baahubali: Before the Beginning, will be a prequel to Baahubali: the Beginning and Baahubali: the Conclusion (both of which are currently available on Netflix to audiences around the world)., The cast of the upcoming series includes Mrunal Thakur as Sivagami, Rahul Bose as Skandadasa, Atul Kulkarni, Vaquar Shaikh, Jameel Khan, Siddharth Arora and Anup Soni.

Leila

Based on a book by Prayaag Akbar, this Deepa Mehta produced show tells the story of Shalini, a free-thinking woman in search of the daughter she lost. Set in the near future, this inventive, boundary-breaking story centres around longing, faith and loss. The cast of Leila includes Huma Qureshi in the title role and Siddharth Suryanarayan.

Crocodile

Written by Binky Mendez, this is a young adult murder mystery thriller series set in Goa. When Mira’s best friend goes missing, she starts her own investigation, uncovering secrets among her friends.

Hotel Mumbai

The true story of the victims and survivors of the devastating Mumbai attacks of 2008. The film directed by Anthony Maras stars Dev Patel, Armie Hammer, Nazanin Boniadi, Anupam Kher and Jason Isaacs.