Five years after its grand entry into India, and a year after it said it would invest Rs 3000 crore on Indian content, Netflix India finds itself at a crossroads as it is unable to make headway in the market where rivals are continuously growing numbers.
In an investor call last week, Netflix cofounder Reed Hastings said: “In every single other major market, we’ve got the flywheel spinning. The thing that frustrates us is why haven’t we been as successful in India. But we’re definitely leaning in there.”
It was revealed that the streamer had recently witnessed a slump in the growth of its subscriber base. Globally, Netflix is expected to add about 2.5 million subscribers to its user base in the first quarter of the year. In 2021, the company could add only 18.2 million customers, which was 50% less than that of 2020.
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Netflix's desperation is showing in India
To be sure, in India Netflix commands 29% of the subscription video market by revenue, with Disney+ Hotstar taking 25% and Amazon holding 22%. The thing is the figures don’t include AVOD (advertising-based video on demand) where Disney+ Hotstar makes much of its money in India.
Netflix revenue in SVOD market is directly related to its higher subscription rates. But the same precludes it from gaining subscribers, which is where the action is now.
Although Netflix has a significant subscriber lead in many markets of Asia, it trails rivals Disney+ Hotstar and Amazon Prime Video by a wide margin. As of December 31, 2021 Netflix had around 5 million subscribers in the country, massively lagging behind Disney+ Hotstar with 46 million and Amazon Prime Video with 19 million.
Netflix understood that it is pricey for the average Indian purse, and even though it has hiked subscription rates elsewhere, took the extreme step of slashing its subscription prices significantly in India last month.
The cheapest Netflix plan — the mobile-only option, which allows lower resolution consumption on tablets and smartphones — is available at Rs 149 in India. That’s down 25% from its previous price. The crucial entry-level plan is now available at Rs 199 per month compared with Rs 499 per month - that's a 60% drop!
The price cut, in a sense, conveys Netflix's desperation to crack the Indian market. For, at around the same time, its competitors Disney+ Hotstar and Amazon Prime, have increased the prices of their respective plans in India.
Is Netflix's content out of touch with Indian reality?
The price cut also hinted that Netflix is also trying to move from premium segment of the market to a more mass category. Of course, this can't be done through pricing alone. It has to go deeper local and more regional in its content.
That is where the rub seems to lie. Netflix choice of films and series have been a bit baffling. To be sure, it has had 'big hits' like the Malayalam superhero flick Minnal Murali. But overall, its slate of Indian content has more misses than hits. On social media platforms, fans claim Netflix is out of touch with Indian reality when it comes to the sort of content it promotes.
Maybe the Netflix India team needs a little reshuffling. It’s ridiculous how out-of-touch their content is with the Indian people. They keep facing boycott calls as well. Indians are already keeping alternatives. It’s not an easy market to woo while also peddling a woke agenda.January 22, 2022
Also, the general perception is that Netflix as a platform is typically Mumbai and Delhi centric. "If you cast a Malhotra and a Dassani in a movie about Tamilians based out of Madurai, how will it pick up?” one Twitter user carped. The reference is of course to the Netflix's original Meenakshi Sundareshwar, which goofed its Tamil references even though the story was about two Tamil families living in Madurai.
Another charge levelled at Netflix's doors is that it though it promotes its original series and films, it doesn't seem willing to stretch itself when it comes to hard-selling outside films.
One industry hand pointed out the case of how Amazon Prime did the hard yards promoting the Telugu movie Pushpa - The Rise, even though the film had done its theatrical run. On the contrary, Netflix dropped an interesting film like Chandigarh Kare Aashiqui almost unannounced.
Also, quite unlike other platforms, Netflix has not entered the lucrative and popular sports streaming segment in India. But Amazon Prime has gotten into it already while Disney+ Hotstar and SonyLIV (Zee5) are past masters at it.
Indian OTT pie is growing
With its market share apparently reaching a saturation level in other places, Netflix needs India more now than ever. India has seen a four-fold jump in the number of OTT platforms, a four-fold increase in the share of digital in total video watch time, and a near 50% increase in data consumption, with video being the largest use case. OTT revenue in India is expected to grow to $13-15 billion over the next decade at a growth rate of 22-25%.
But the message to Netflix is clear: It needs to pull up its socks and embrace the Indian sensibility more earnestly. Snootiness does not work in a market like India.
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