New Delhi: Popular online streaming service Netflix completes six months in India on Wednesday. Its only big achievement so far has been the announcement last month of its first original series in the country based on novelist Vikram Chandra’s Sacred Games, which dwells on small-time hustling to armed gang wars, of good men going to seed and the upward mobility of the baddies. The company has partnered with Phantom Films, a film studio founded by Anurag Kashyap, Madhu Mantena, Vikramaditya Motwane and Vikas Bahl to produce the series.
“It’s been six months since our global launch and there’s so much to learn—whether it’s technology, content, payment channels, languages and we are really excited by all that we discover because it means we get to really make the Netflix experience better and better for our customers," said a Netlfix spokesperson in an emailed response to queries on its India plans. Netflix did not divulge any figures on the number of subscribers it has signed up in India.
According to a top executive at a home-grown over-the-top (OTT) streaming platform, Netflix hasn’t made much of an impact in India yet. In the US it may be the market leader, but in India it faces several challenges. “It’s had a very lukewarm response in India so far. There was a lot of excitement when it launched and people took it on in the first month when it was free, only to discover that it doesn’t have enough content compared to its inventory in the US. After the first couple of months, many have disconnected," said the person cited above who declined to be named. “I think their pricing is also a bit on the higher side in the Indian context. Besides, Netflix is watched on TV sets around the world and not on mobile, whereas India’s broadband infrastructure still leaves a lot to be desired," he added.
Netflix is taking its first steps in India and it will take a while before everything falls into place, said another top executive at a leading Indian streaming service.
“Even in the US, subscription-led video-on-demand services have taken significant time to establish themselves. Also long format content works better in the US because their media ecosystem is PC (personal computer) driven unlike India where mobile is emerging as the touch point for video content consumption," he said. The two executives declined to be named as they do not want to be seen commenting on competition.
Several challenges of broadband infrastructure and payments still need to be fixed in India. “Payment systems are critical to the OTT eco-system and important for paid services. The consumer needs a frictionless payments gateway," said Uday Sodhi, executive vice-president and head (digital business), Sony Pictures Networks India.
To be sure, in India, Netflix, which launched on 6 January, faces competition from more than a dozen online streaming services in the entertainment segment. Independent OTT services brands such as Spuul, HOOQ, YuppTV and PressPlay, among others, have already launched operations in the country and boast of a significant number of subscribers. On the other side are a clutch of online streaming brands of leading television broadcasters such as Zee, Sony and Star under brands such as Ditto, Sony Liv and Hotstar, respectively. Hotstar recently started selling its most popular international TV series and films, largely from the 21st Century Fox library, for a monthly subscription fee of ₹ 199.
While most of the OTT service platforms follow a mix of advertising-led and subscription fee-based business models, Netflix, in keeping with its global strategy is free of advertising In India. Netflix launched with content subscription plans that are in line with its global pricing strategy of $8, starting at ₹ 500 per month. The video streaming service also offers two other plans priced at ₹ 650 and ₹ 800. The service is available free for a month.
While several digital entertainment experts feel that Netflix has not been able to create a dent in the Indian market yet, some others said that it was too early to comment on its performance. Ashish Patil, vice-president (brand partnerships and talent management) at Y-Films, the digital arm of Yash Raj Studios and maker of popular web series like Ladies Room and Bang Baaja Baraat, among others, said, “It’s early days but what’s exciting is that they have aggressive plans for India. I understand that there will be a few more originals (shows) that they’ll make in India."
“What’s important to recognize is that Netflix is creating a habit among consumers for paying for good quality content and that’ll help grow the original content market in India," added Patil.
Sri Rajan, chairman of Bain & Company India Pvt. Ltd, said that a paid service like Netflix caters only to an elite audience in India. “There will always be an audience for Netflix type of applications or content. But it’ll be limited to the very elite of this country. And so I think if you really want to find a way to access a broad sort of combination, I don’t think it’s going to happen soon," cautioned Rajan.
While the subscriber base for Netflix and time spent by users in India remain a mystery, their content preferences aren’t—Narcos and Making a Murderer rank among the top 10 most viewed shows for the American on-demand video streaming service across all the 190 markets it is present in.
“For now, we very quickly see that the shows Indians love are very much similar to what we see in other markets and the top ones are Netflix Originals like Master of None, Narcos, Marvel’s Daredevil and Marvel’s Jessica Jones. In general, we have seen that great stories transcend borders—we may be different culturally but we all seem to love a great story. We see this with Narcos, a big production 75% in Spanish about Pablo Escobar and Making a Murderer, a legal docu series about a murder in a small Wisconsin town no one’s heard of. Both ranked among the top 10 most viewed content in nearly all of our markets when they became available," said the spokesperson in the email response.
Netflix started in 2016 with 75 million members and in Q1 2016, the company headquartered in Los Gatos, California, had net additions amounting to a record 6.74 million. Of the 81.5 million Netflix members, 42% are now outside the US.
“The momentum is really driven by how customers in new markets like India are discovering Netflix and they like the fact that we are a flat-fee, unlimited viewing, commercial-free experience, and can cancel anytime without commitments. They can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen," added the company spokesperson.
“Our early adopters are usually consumers who are digitally-connected, tech-savvy who have smartphones and own Apple accounts but as we grow, we are starting to build around this momentum into our customer base through deeper local insights," he said.
The library Netflix had at its launch in January has been growing to include more Netflix originals and more licensed titles. “In 2016 we plan to spend about $5 billion on programming rights and that includes more than 30 new Netflix original series. That’s more than one full new season of a series every other week. In addition, we’re expanding our original film initiative, launching more than 10 films exclusively on Netflix in 2016. We are also adding more kids’ programming and documentaries," added the spokesperson.
In India, Netflix is pursuing recent Bollywood titles, notable indie films, memorable classic Bollywood titles and the best of regional cinema (Tamil, Gujarati, Punjabi and Marathi). In January, the company had acquired rights to the movie Brahman Naman from maverick Indian director Qaushiq Mukherjee, popularly known as ‘Q’. This was the company’s first distribution tie-up with an Indian director.