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What the Netflix, Vodafone, Videocon d2h and Airtel tieups mean

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MUMBAI: It clearly is looking at spreading its net far and wide, at least on the availability front. Global video on demand service Netflix has announced the signing of partnerships with three of India’s leading players in the DTH and mobile telephony space: Airtel, Videocon d2h and Vodafone.  

CEO Reed Hastings was in Delhi yesterday and is expected to be in Mumbai over the next few days to probably make a few more announcements.  Said Hastings at the conference: “India is one of the top 3 markets for Netflix in terms of mobile usage. We’ve had strong growth here; it’s stronger than all of the other Asian nations. It’s a larger market. In terms of investments, we are investing heavily into content. The watch time of our shows has gone up significantly since the launch of Jio.”

He added: "India is one of the most important and vibrant countries in the world, and we are delighted to be teaming up with three of its leading companies to make it much easier for consumers to enjoy Netflix. In the months and years to come, we look forward to bringing our Indian members more compelling stories from all over the world, and ever-improving viewing experience, and incredible joy.”

Details of the Videocon d2h tieup were made available through a press release yesterday. It said that Videocon d2h consumers will be able to enjoy Netflix on a large screen by simply clicking a dedicated Netflix button on the remote control of HD Smart Connect set top box (STB).

 Netflix will be available through a dedicated app available on the connected Set top box, HD SMART STB  which converts any existing TV into a Smart TV besides showing more than 600 channels and services in high definition and standard definition. The HD Smart Connect set top box allows viewing in SD and HD, using the satellite feed like any other Videocon d2h set top box. It can be connected to the Internet through any Wifi or Ethernet connection in the home for accessing a curated set of applications available through the Internet. The minimum Internet speed needed is 2 Mbps. These apps, both free and paid cover a range of content genres and utility apps. By connecting the HD Smart Connect STB to any TV, the TV would become smart.

The Airtel partnership is expected to be in the same vein. Hastings told journalists that “we are focussed on the set top box with them so that the device attached to the television has Netflix on it, so they can stream directly to the television. In case of Vodafone, it is a mobile partnership wherein payment for Netflix will be integrated via mobile billing or through pre-paid schemes.

With more than 94 million members (read subscribers) worldwide, the tieups will give Netlflix access to  humungous potential audience numbers.

Says a media observer: “It’s a master stroke of sorts.  Depending on whether the Airtel DTH partnership extends to the mobile parent;  whether the partnership with Videocon d2h extends to Dish TV when they merge, and to Idea when it partners with Vodafone, the potential member base could extend the Netflix service to around 500-600 million potential viewers. And around 300 million smart phone and DTH viewers. Clearly Netflix means business in India.”

The media observer who was unwilling to be quoted stated that what Netflix will have to look at pricing in India if it wants to become a mass brand.

“We will get to know over time whether it is playing the volume game or the premium niche game. Currently it is the latter. Rs 550 to Rs 700 per month is limiting its subscriber base. But the advantage of Netflix’s higher pricing is that it can share more with its partners on the other hand, apart from the data consumption revenue that will accrue to the telco,” she said. “Our estimates are that its paid subscriber base in India is sub-500,000. All the other players are priced much lower and are yet to take off. Even Hotstar is struggling despite having a great content offering. And Amazon is almost giving away its content for free with its 499 per year package. Netflix will  have to decide which route it is taking.”

Hastings acknowledged this to the media saying that Netflix  could come up with other payment plans - like a weeky one or daily, keeping in mind the purchasing power in India. But the current model is working well with the top 10 per cent, he disclosed. " Our main focus is on adding more content. What we really want to be is a content solution, where you can get almost all you want to view in one place on Netflix.”

Media observers expect other announcements soon – possibly a partnership with Jio? An office is likely to be set up in Mumbai by 2018. Hastings is slated to meet some production biggies in Mumbai in the coming days apart from following up on the progress of Sacred Games Phanton Films is producing for it.

Watch this space!

(Updated on 7 March at 1:15 pm)

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Videocon d2h partners Netflix for HD Smart Connect

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