Be it all-time favourites such as ‘Narcos’, ‘House of Cards’ and ‘Crown’ or some of the more recent originals such as ‘Emily In Paris’, ‘Good Doctor’ and ‘Atypical’, India has a fair share of die-hard Netflix content fans who binge-watch these shows for hours every day. The American streaming platform, which debuted in India at a premium price point of ₹899, has over the years lowered its subscription rates. Today, Netflix India’s entry level price-point is ₹149 per month, while its premium package is priced at ₹695 per month. In fact, the premium package enables 3-4 people to watch the content on their respective devices. Contrary to its global pricing strategy, where it has increased prices, in India it has slashed its subscription price.
A mass pricing strategy in a price-sensitive market is certainly the right approach, so what’s amiss in Netflix’s India strategy? What prompted founder Reed Hastings to say that the lack of success in India is frustrating? While the company has certainly dealt with pricing, where it might have gone wrong is its content strategy. Though it has been ahead of the curve in investing in original shows and acquiring Indian films, bulk of its content lacks mass appeal.
“Netflix has the opportunity to connect better with Indian audiences and build strong local franchises. They have extremely good international content, which works for metro audiences but has limited appeal in Bharat. Strong clear local leadership and strategy could change that," points out former ZEE5 CEO and Eve World founder Tarun Katial.
The industry believes that apart from its first Indian original, ‘Sacred Games’, the rest of them (‘Suitable Boy’, ‘Bombay Begums’, ‘Leela’ or ‘Taj Mahal’) are not meant for the masses. Competitor Amazon Prime, say experts, has done a better job of connecting with the masses. Not only have they come up with Hindi originals such as ‘Paatal Lok’, ‘Mirzapur’ and ‘Family Man’ that resonate with an average Indian, they have also been ahead of the curve in investing in regional content that has paid off.
With a subscriber base of just 4-5 million (Amazon Prime has 17 million subscribers, while Disney+ Hotstar has 46 million), former Walt Disney India director Kavita Panda claims Netflix is profitable unlike the rest of the streaming platforms which are in the red.
“Even if the bulk of the 4-5 million Netflix subscribers are on the ₹149 per month plan, it adds up to a revenue of ₹1,799 per consumer, per year. Amazon Prime Video is ₹1,499 for the year and so is Disney+ Hotstar. Also, a large portion of Disney+ Hotstar consumers are part of their advertising-led plan. Their paid subscribers are much lower,” explains Panda.
All that Netflix India needs today is an aggressive local content strategy, agrees Karan Taurani, Senior Vice-President, Elara Capital. “They have resolved the pricing issue. Also, consumers are willing to pay for good content, so all that Netflix needs to do now is make investments in high quality local/regional content.”
Most multinationals make the classic mistake of painting India with their global brush and Netflix is not an exception. “You land into Netflix India’s home page and all that you can see is global content. India needs to be looked at distinctively, but most of the content decisions are taken globally and that’s where their strategy has erred,” points out the CEO of an OTT platform.
In fact, Netflix doesn’t have a CEO in India and media industry stalwarts feel that the company urgently needs to have a team at the top that would take on the India operations. “They have Monika Shergill, but she is head of content, they don’t have an overall head of business in India,” says a senior media industry expert.
The rate of attrition in the Indian business has also been high. “Since the employees are not empowered, the drop-outs are high,” points out an industry veteran, who also believes that their hiring strategy is flawed. “Most of the people in their content team, despite coming from the broadcast industry, have not really created mainstream content. Netflix needs a team which understands the pulse of Indian consumers.”
“They are willing to pay a 25% premium when it comes to acquiring films, but they end up acquiring films which don’t resonate with mass audiences and that’s because the strings are being pulled by the global headquarters,” adds the CEO of the rival OTT platform.
He says that for a premium service like Netflix, it becomes important to focus a lot more on distribution. He cites the example of Lionsgate Play which has ensured that it is available on telco platforms. It is also available on Amazon Prime Video. “Apart from Vodafone, I don’t think Netflix is distributed on any other platform.”
The need of the hour for the world’s most popular streaming platform is to have an India-specific strategy and more importantly a local leadership team.