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Localised content the way forward for Netflix in India

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MUMBAI: Global to local seems to be the key strategy of Netflix to spread its wings in India. ‘Netflix and Chill’ is the popular term across the OTT ecosystem but the number of Indian consumers chilling with Netflix’s high-quality content dwarfs in comparison to users in other markets. However, it is adapting to Indian tastes and modifying its pure international content line-up. Will this shift drive the growth for Netflix?

Netflix launched in India in January 2016 and has since created a niche for itself for high-quality TV series and Hollywood movie content for the English-speaking audience in the country but it is far behind other OTT players in terms of subscribers. Currently, it is the fifth largest player in India, behind players such as Hotstar, Voot and Amazon, according to the Counterpoint Technology Market Research report.

With the rollout of 4G internet services by the top telecom providers, especially Reliance Jio, streaming in India has taken a giant leap forward. In the year 2017, Netflix acquired more subscribers than local cable connections in the US (according to data from Statista and Leichtman Research Group). However, even after spending two years in India, things aren’t quite as rosy for the company as in the US. On average, the Indian consumer would spend around $32 dollar (close to Rs 2200) per year on entertainment, whereas in the US, people spend around $2260 (close to Rs 1.5 lakh) annually, according to global entertainment and media outlook 2017-2021 report by PWC.

How does Netflix aim to take over the minds of India when cable connections give you 100-150 channels at just Rs 1100-200? Netflix subscriptions can vary from Rs 500-800 a month. An annual plan can range from Rs 6000-9600.

Netflix CEO Reed Hastings believes that the amount that an Indian consumer pays for cable services, on a global level, is very low, which keeps the industry smaller than it should be. Speaking at an event, he had said that Netflix’s strategy is to build up local and global content. Though he admitted that Netflix’s rates were higher than cable TV, they were significantly lower than movie tickets and other entertainment experiences. Hastings is aligning the OTT player as competition to the bigger entertainment options and not the idiot box.

So far, Netflix has focussed on pushing its global content such as House of Cards, Orange is the New Black, Master of None, Stranger Things, Narcos and Daredevil to Indian subscribers. While it has made significant progress in adding regional content, it still has a lot of ground to make up.

Now, Netflix sees a potential of adding a massive 100 million Indian customers. According to Hastings, Netflix has around 120 million subscribers in over 190 countries who consume over 140 million hours of TV shows and movies per day, and about 60 million are from the US. However, in the price sensitive market of India, Netflix banks on close to 1.5 million subscribers.

How does Netflix aim to break the ice? The answer is local content. Hence, instead of price, Hasting suggested that Netflix wants to be sensitive to great local stories and content and be able to invest in them. So, the strategy will be to build up the local content that includes regional stories as well.

But will producing local content be enough for Netflix to chill in India? Commenting on the same, PwC partner & leader, media & entertainment Frank D'Souza says, “Growing smartphone and internet penetration across the country has created a wide range of opportunities for OTT players. Focus on creating and producing regional content should be of utmost importance considering the fact that India is a multilingual country. A ‘one size fits all’ approach would not work for the country with over 22 official languages.”

OTT platforms have realised the power that regional content has over the dissected Indian audiences. Amazon Prime was one of the first to take the plunge followed by Zee5, Hotstar, ALTBalaji, Voot, Viu etc.

Netflix recently announced three Indian original productions Ghoul, Leila and Crocodile apart from four productions already under works which include Sacred Games, Selection Day, Again, and Bard of Blood. On Valentine’s Day, Netflix released its first India original Love Per Square Foot by Ronnie Screwvala.

Where the platform is likely to get cold feet is in growing in tier II and III cities and the rural audiences. Commenting on the same, D'Souza says, “These are price sensitive segments of the Indian market. Considering the fact that OTT requires one to incur additional costs like that of internet subscription, it is important for players such as Netflix to have value added services or bundled services to penetrate these markets. Tying up with internet service providers and telecom operators in rural markets would give them an early mover advantage.”

Netflix has one more interesting feature to bet on—sharing the subscription package among people. Many networks limit the number of people who can watch programming at the same time. Netflix allows two to four simultaneous streams per subscription, depending on the plan, and charges more for the higher number of streams. So, the premium plan can be shared among four people or in a family of four.

By focussing on producing more local content from India, Netflix is betting on product over pricing when it comes to adding the next 100 million users. As a part of its future strategies, it should create movies and TV shows that Indians will be ready to die for while also keeping in mind the various languages.

Also Read :

2017: The year OTTs went regional in India

Regional OTT content more than just catch-up TV    

Indians among top commute streamers for Netflix

Amazon strikes the balance between bingeing and episodic with 'Breathe'

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