Netflix counts India as key market, plans bigger bets for more subscribers

Video streaming major Netflix counts India as a key growth market and is prepared to take bigger bets, Chief Executive Officer Reed Hastings said on Wednesday.

Addressing investors during a concall, Hastings, 58, who started Netflix 21 years ago, said that the company plans to add one million subscribers annually by expanding into more local languages and experimenting with pricing options as well as increasing partnerships. 

Netflix, according to industry estimates, has a subscriber base of 5 million in India, and is behind players such as Hotstar, ZEE5 and Amazon Prime Video.

"There is a large mobile phone subscription base in India. And, just like around the world, people (in India) love watching entertainment. So, that is a huge market (for us). We will take one million at a time (in terms of adding subscribers annually), expanding beyond English into Hindi and then into many more languages, offering more pricing and bundled options," he said about the firm’s India strategy.

Netflix launched three India-specific shows or originals in the last few months, including Sacred Games, Ghoul and Lust Stories, apart from a movie called Love Per Square Foot, which were all in Hindi. Some five other Indian originals are on the cards, said experts, as Netflix plans more local shows for local audiences, splurging as much as ~6 billion per year on all this.   

“Local content increases viewer engagement and with local shows what happens is that there is more talk among friends, peers and influencers. All of this has helped us and we would continue with that,” Ted Sarandos, chief content officer, Netflix, said during the call.

Considered a premium service, Netflix has added subscribers at the rate of 2 million per annum in the past two-and-a-half years, implying its one-million annual number now is more measured, experts said. 

They point to competitive intensity in the over-the-top (OTT) market, led mainly by broadcasters such as Star, Zee, Viacom18 and Sony, besides archrivals such as Amazon Prime Video. 

"Broadcasters are investing heavily in the OTT space. Bringing more intriguing content to their platforms is their primary target. This needs more investment in creating original content and content licensing, for specific consumer profiles. Apart from new content, they are also using OTT as a secondary platform to drive consumption for their shows offered on TV, " Hanish Bhatia, senior analyst, devices & ecosystems, Counterpoint, said. 

ZEE5, launched only six months ago, has already emerged as the number two OTT platform with 41.3 million monthly active users, behind Hotstar, which has 150 million monthly active users. 

Amazon Prime Video is estimated to have a subscriber base of 22 million in India. Both ZEE5 and Hotstar are tying up aggressively with smartphone companies apart from telecom companies, offering to be bundled with new phone models. 

They are also tying up with e-tailers such as Flipkart (with Hotstar) and EZMall (with ZEE5) as well as allied operators such as travel sites and hotel aggregators as they strive to improve penetration.

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