Even the niche in India is bigger than most countries: Reed Hastings
New Delhi: Reed Hastings, chief executive of popular streaming service Netflix, is visiting India for the third time in two years. “Work is surprisingly easy right now. Things are going very well. I keep thinking I should be working more,” he said. On Friday, the company announced three new Indian original series—Leila, Ghoul and Crocodile—taking Netflix’s India originals to a total of seven, the highest number of shows commissioned by the service outside the US, UK and Japan. The American streaming giant has earmarked a content budget for India on a short term basis. Hastings, who spends two hours a day watching Netflix, said the company will wait and watch for results before locking down further investment. In an interview, Hastings talks about subscriber growth, technological advancements and consumption habits in India. Edited Excerpts:
You’ve said in the past that international markets are growing rapidly for Netflix. Is India a big part of this?
Yes. International is growing over 40% year-on-year in membership whereas the US is just 11%. India is growing, like international, but far higher. The number of shows that we have announced in India is bigger than in any other country but the US, UK and Japan.
How closely are you involved with the commissioning of new projects for Netflix. Do you ever get to be on set?
I wish. Not at all. Our content team is very good. And so what I do is generate lots of revenue for them to spend and they’ve been spending it very well. But our head of content, Ted Sarandos, is the guy who is the best at it. Even he has many people who then pick. So think of it as on the internet, we could have many many shows. If you have a linear TV network, you’ve got a few shows that have to work and everybody focuses on those 2-3 shows. With Netflix, we can have 20 shows and take more creative risk on them. So we have less where we have to guarantee the success and more where we can allow the artistic freedom and take bigger risks. When that works well, like with Altered Carbon then it’s fantastic. But there are other times when we end up cancelling a show after a season or two and we just did one on Disjointed where it just didn’t have enough of an audience. But again, it’s because we are on the Internet that we could try so many different things.
Your audience is likely to be at the very premium end in India.
Do you have plans to try and tap the mass market? Or are you happy to do this?
Well initially. We’re also mostly western content and mostly in English with some Hindi. So, we have got a number of limiters compared to Reliance Jio or Hotstar. So, it’s a good place for us to start. And then as we build up the shows that we are producing here in India so that we have content that’s more relative to world audiences then we’ll continue to expand. But for now its really aimed at people who have some interest in western content because that’s where we are so strong. And as with everything in India, even the niche is bigger than most countries.
Isn’t content becoming more and more expensive?
It is, which is exciting if you’re a writer. But not so exciting if you’re an aggregator. But it is what the market is. What we have to do is focus on the best shows and we’re not going to get all of them, sometimes there are other networks. That’s good for the talent because if they can bid their content to multiple networks then it’s a lot fairer system. So it is competitive but so is everything else. At least, we are on the side of the internet and there is all this growth.
Are you happy with the progress in India so far?
Yes, we have made great progress in these first two years. Both in developing the content relationships and commissioning shows as well as in membership growth. We recently changed the payments. When we first launched you had to have an international credit card to use Netflix. Pretty limiting obviously. Then we got the right relationships with RBI (Reserve Bank of India) and now we can handle all the domestic debit cards and credit cards. So big expansion in who can pay for Netflix.
Would you consider changing the pricing at a later stage for India?
What we’d like to do is make the content so great that more and more Indians say that it’s of incredible value. Compared to movie tickets and Starbucks etc. it is great value. Our main focus is increasing the amount of content so you spend more time with Netflix rather than going low on price and then you don’t have the revenue to invest in new content.
Technologically, what’s the next step for a company like Netflix?
Well the internet looks quite robust, it might last like electricity for a 100 years or something. The big ones we are working on technologically are improving the sound and the audio with Dolby vision. Once you get a new TV, it’s got Dolby vision and spectacular colour depth. Eventually, you want your TV to be so bright that it’s hard to look at a sunrise on TV. It’s hard to look at a physical sunrise. Think of it as TV which is perfect when it mirrors the real world. So, the whole industry is trying to figure out how to do that.
And then at the low end, we’re doing more and more so that you can do an efficient data stream on the phone.