Netflix a damp squib; broadcasters long term gainers: Edelweiss

MUMBAI: While the world is going gaga over Netflix’s simultaneous launch in 130 countries across the globe including India, financial services company Edelweiss is not too impressed, at least in the medium term.


So when all and sundry are trying to predict and second guess the impact Netflix’s launch will have on the over-the-top (OTT) scene as well as on the broadcast industry in India, according to Edelweiss, the impact of Netflix in India will be limited on direct to home (DTH) and cable TV players over the medium term.


Citing the reasons for the same, Edelweiss lists:


1) Netflix does not have local content

2) Free content is easily available on Erosnow, Hotstar, YouTube

3) Steep pricing at 2-3x prevailing cable TV/DTH rates

4) Broadband speed beyond top cities will be a huge challenge

5) Lack of India cricket matches


The Indian pay TV market is on its way to embrace OTT platforms, especially for sports content, following increasing usage of internet. According to the company, this will be an additional source of revenue for broadcasters like Zee, Sun TV and TV18 over the longer term. “However, most broadcasters already have their OTT platforms and are yet to sign content deals with Netflix,” the company said in its report.


A successful OTT in US:


Netflix is a successful OTT in US as cable TV ARPU is $60 per month versus Netflix’s ARPU of $20-24. Secondly, the US has higher broadband penetration (~80 per cent) with good speed; and original content is dished out by Netflix. However, in India, Netflix currently lacks these advantages.


“Hence, we do not expect Netflix to have any major impact on Indian DTH/cable TV players over medium term. Netflix has a long way to go before tasting success in India,” Edelweiss said.


Pricing, slow broadband key challenges in India:


As was reported earlier by Indiantelevision.com, in India, Netflix’s subscription rates are Rs 500, Rs 650 and Rs 800 for basic, standard and premium packs respectively. “These are 2-3x the prevailing cable TV/DTH rates. Besides, broadband will entail additional costs,” the report added. 


Internationally, Netflix has done well riding attractive pricing, which is almost half the cable TV/DTH rates, and original content. While the company currently does not enjoy these benefits in India, in a bid to attract subscribers, it is offering free services in its first month of operations. 


According to Edelweiss, plans are also afoot to facilitate streaming via laptops, TV, smart phones and tablets. “However, we believe in India where subscribers pay ~Rs250-450 per month for cable TV (includes sports channels), Netflix’s rates are on the higher side. Broadband speed will also be a challenge. Netflix requires minimum speed of 512kbps and recommends 3mbps speed for SD content and 5mbps for HD videos, which further limits its expansion plans,” the report said.


Sports missing, India savours diverse content:


Netflix is currently beaming international TV shows in India along with English and Hindi movies. “The company is currently not offering local content. Sports content, the main driver of the OTT platform, is also not offered. With India being a country with diverse culture it consumes content in eight different languages. Currently, Netflix is beaming only English content which will attract only niche audience,” the report added.


With Netflix’s subscription price being by far the steepest in India as compared to competition, some of whom even offer content for free on their platform, it remains to be seen whether other players up their price, match Netflix’s or continue to offer content at a lower price. That said, with growing competition in the space from the likes of Arré, ALT Digital, DittoTV, ErosNow, HOOQ, Hotstar, Netflix, nexGTV, Sony Liv, Spuul, Voot and YuppTV, Netflix’s content strategy in the near future will be the key differentiator, which will separate the best from the rest.

Latest Reads

Culture Machine launches digital channel Om Bhajan Bhakti

Culture Machine has launched its new digital brand on devotion and spirituality, titled "Om Bhajan Bhakti". The channel explores the spiritual and devotional space by providing unique experiences and learning to viewers.

iWorld Video On Demand
Welcome offer lands Reliance Jio in 4G speed soup

Even as Reliance Retail today launched 4G F1, the first device under the LYF brand outside the four elements branding, Reliance Jio seems to have received a setback with TRAI declaring its speed to be the poorest among five telecom operators. LYF F1 has been launched with advanced 4G for Reliance...

iWorld Telecom
Vodafone India announces roaming free from Diwali

Vodafone India, one of India’s leading telecom service providers, has announced free incoming calls while roaming nationally for all its customers. Starting this Diwali, all Vodafone India customers, travelling anywhere in the country, can continue to talk worry free without having to cut short...

iWorld Telecom
Facebook updates architecture for India's next billion coming online

GURGAON:  "We (Facebook) are now launching a new architecture so you can see less grey boxes, and more relevant stories quickly, regardless of your network connection. This new architecture of News Feed allows stories to be ranked on the client after being sent from the server. We avoid spinners...

iWorld Social Media
Q2-17: Reliance: Jio busts records, organised retail grows 63 percent

The Mukesh D Ambani led Reliance Industries Limited (RIL) organized retail segment - Reliance Retail, continued its growth momentum and profitability in the quarter ended 30 September 2016 (Q2-17, current quarter), while its digital services offering Jio has broken all records in terms of...

iWorld Telecom
Social media 'Ae Dil Lets Airbnb' contest starts

A social media contest has been launched to celebrate the upcoming smash release of ‘Ae Dil Hai Mushkil,‘ a Bollywood feature starring Fawad Khan, Ranbir Kapoor, Anushka Sharma and Aishwarya Rai Bachchan.

iWorld Social Media
Amazon Prime announces exclusive partnership with Vishesh Films

Prime Video, which is coming as an added benefit for Amazon Prime members in India, will be the exclusive subscription video streaming home for upcoming new releases from Vishesh Films. The releases will stream on Prime Video before their television premiere.

iWorld Video On Demand
Facebook's India-focused news feed feature launched

Social media giant Facebook a short while ago announced a new feature for providing India-focused news feeds. This decision was announced at Facebook's yet-to-be-officially-launched office here (in Gurgaon).

iWorld Social Media
OTT players spend exceeds traditional broadcasters; Netflix weighing Indian content to drive growth

MUMBAI: Online platforms such as Amazon and the streaming giant Netflix have ramped up their investment in programming, investing US$ 7.5 billion last year which is more than HBO, Turner and CBS in most countries including Australia and South Korea.

iWorld Over The Top Services

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories