Opinion: Netflix India bites the ‘price’ bullet, goes desi | IWMBuzz

Netflix India cuts subscription rates, an opinion piece

Opinion: Netflix India bites the ‘price’ bullet, goes desi

When the international video-on-demand giant Netflix first arrived on Indian shores in 2016, it was expected to shake up the burgeoning digital streaming market in India like nothing else before. It had chalked out lofty aims and grandiose plans to grab maximum eyeballs in India by flexing its primary weapon- superlative content.

Once in India, Netflix launched itself on the warpath to achieve success in the enormous market that India presented. Flush from its success in the US and Canada, and exultant at its rapid achievements in Australia, its biggest success story in the Asia-Pacific region, Netflix aimed to capture the nascent, and highly lucrative, Indian streaming arena. India was the low-hanging fruit that Netflix couldn’t help reaching out for with gleeful hurry. Or so it thought.

Netflix CEO, Reed Hastings, had famously declared in the August of 2018 – “The next 100 million subscribers for us is coming from India”. At this point, Netflix’s global subscriber base stood at around 140 million.

Only several months later, Hastings had also unequivocally asserted in an interview to a media company that Netflix had no plans to reduce its subscription prices in India. Its focus, as he stressed, was on the ‘upper-middle class, English-language, English-entertainment households’, which boasted higher disposable incomes and thus could afford Netflix’s relatively expensive subscription plans.

Surprisingly, home-grown content companies such as ALTBalaji, ZEE5, Voot, Eros Now, SonyLIV hardly had their knickers in a twist, despite Netflix’s thumping entry into the Indian OTT space. Maybe they knew something Netflix didn’t – the highly price-sensitive nature of the Indian market.

Notwithstanding the heavy rates, Netflix did seem to gain an impressive foothold in the Indian market by virtue of the runaway 2018 hit, Sacred Games, headlined by Bollywood A-listers, Saif Ali Khan and Nawazuddin Siddiqui. An Indian original, the series was watched and appreciated across the world, besides being touted as India’s answer to cult series, Narcos.

Netflix quickly followed it up with the dystopian hit, Ghoul, and the breathtakingly stunning Delhi Crime. It soon realized that, rather than western content, focussing on Indian originals would guarantee it a faster rate of success in the singularly unique Indian streaming scene. It then proceeded to go desi with a vengeance, commissioning a spate of India-centric programming, conceived and executed in India itself.

Eventually, the law of averages caught up with the streaming giant. With an eye on ratcheting up subscriptions, Netflix failed to focus on the quality of programming dished out in the name of Indian originals, is what we believe. Thereon, its content has gone into a downward spiral, and is now at par with home-grown content. Its quality of content, which was its distinguishing factor, has rapidly been engulfed in the sea of sameness that is digital content in India. One can hardly differentiate Netflix’s content from any other content platform in India.  Its focus more is on heave weight names rather than quality storytelling.

With dramatically differentiated content out of the picture, Netflix’s price points make it a considerably less alluring proposition for the average Indian consumer. Chew this – Netflix offers three price tiers in India – 500 rupees per month for a basic plan, 650 rupees for a standard plan and 800 rupees per month for the premium plan.

Compare that with its direct competitors, Disney-owned Hotstar, which offers its premium content at 199 rupees for a monthly subscription, and 999 rupees annually. Amazon Prime too has the exact same subscription plans.

In contrast, home-grown content companies such as ALTBalaji, Eros Now and Zee5 offer their monthly subscription packages dirt cheap. For instance, ALTBalaji is available at a monthly rate of 33 rupees. Its original content is also available for free on Jio Cinema and MX Player.

And guess what, ‘jugaadu’ Indian consumers have found a way to stream Netflix on their devices for as low as 200 rupees per month. How? Elementary, dear Watson! The 800 rupees plan allows you to access Netflix simultaneously on four different devices. So four friends/relatives share the subscription, split the cost at 200 rupees per head and enjoy unlimited HD Netflix content on their mobile phones. Yes, it happens only in India, but hey, we are like this only.

Net result – despite spending tonnes of money into its Indian programming, Netflix has hardly made spectacular inroads into upping subscription numbers. At the end of three years of presence in India, it boasts of a measly 5-8 million subscriptions. Hotstar meanwhile has garnered an astonishing 300 million active users on its platform in quick time.

And yet, Netflix had steadfastly refused to lower rates in its India plans.

That was then. Today is a different story.

News coming in from overseas conveys in cut and dried terms Netflix’s loss of subscription base in the US of A. Just a couple of weeks ago, the streaming giant reported a loss of 126,000 paying customers in the US, its home market. The loss had an instantaneous cascading effect and Netflix shares tanked 10% at the stock market.

India has therefore become an even more important market for Netflix, to offset the inevitable slowdown in developed markets. The Indian subcontinent is the proverbial Holy Grail for Netflix, with its largely-untapped, millions-strong middle class and stunning mobile-internet boom. Provided it takes heed of the adage – tough times call for tough measures.

Ever quick on the uptake, Netflix India has taken its toughest step yet – one it had proclaimed was beyond chance. It has finally bitten the ‘price’ bullet. In the hope of penetrating deep into the Indian market, including the golden goose – tier II and tier III Indian towns, it has announced a special mobile-only subscription plan for India at a reasonably cheap 199 rupees per month.

It has also announced a slew of Indian shows and digital movies to lure the original-content-crazy Indian consumer into its fold, tying up with Bollywood biggies like Shah Rukh Khan and Anushka Sharma to produce content that will appeal to Indian viewers.

According to independent media research firms, India’s streaming market, valued at over $700 million, is expected to grow to $2.4 billion by 2023. And over 40 streaming companies, with more in the pipeline, are hankering for a slice of the Indian video-on-demand revenue pie.

As of now, India has proved to be a tough nut to crack for Netflix. But recent developments prove it is not giving up without a fight. All that remains is for us to watch from the side-lines, as Netflix cracks the code, sooner, rather than later.

Also Read

Latest stories