Netflix has started taking giant strides in Asia, and India happens to be one of its biggest markets. On the back of its recent strategic partnerships with leading Indian telcos, Netflix wants to rule the Indian OTT space. Will the going be easy? Shashank Venkat explores…
Netflix CEO Reed Hastings' recent visit to India has definitely established the fact that the country is a very significant market for the company. With close to 5 million people already subscribed to the service in India, and the video-on-demand space poised for huge growth, the entertainment giant sure has its eyes set on a big share of the pie. Taking its first steps in this direction, Netflix recently announced strategic tie-ups
with telecom majors Vodafone and Airtel along with Videocon D2H to offer content through their mobile and direct-to-home (D2H) platforms.
It is not surprising why India has caught the attention of Netflix. An increasingly young population coupled with access to cheap smartphones and constantly declining data prices means that Netflix is well poised to take advantage of this scenario. Moreover, with industrial heavyweight Reliance Jio throwing their hat in the ring with their $20 billion investment in mobile services, the other telecom companies are only going to bring their data prices down to compete on a level playing field, which will provide a further shot in the arm for OTT (Over The Top) service providers like Netflix.
What has been surprising however, is Netflix's growth strategy in India up until now. Unlike arch rival Amazon Prime, which offers a significantly low subscription service for Indian subscribers (INR 499 or roughly £6 per year), Netflix offers its basic service at a recurring billing cost of INR 500 per month
. This substantial price difference is a significant deterrent for the price-sensitive Indian market which is quite used to accessing free OTT content from other local players. Also, at this price point, only the cream of Indian OTT subscribers from Tier-1 cities will ever subscribe to its services. This strategy, while attracting a loyal set of users, will unlikely ever give Netflix a very large share of the market.
So, will these recent partnerships see Netflix lowering its subscription prices or is it just a ploy to gain easy access to other widespread networks? For starters, Netflix will offer value-added services such as carrier billing on the Vodafone network as well as reach the users on Airtel and Videocon D2H platforms. These partnerships may result in lowered subscription prices to begin with as the new users get used to a whole new content and viewing experience. But if history is any indication, Netflix has considered itself as a premium player and it is doubtful that it will change that positioning anytime soon. Netflix will continue to focus on creating more premium original content by partnering with some big regional players in the space.
But, one thing that Netflix has done very well is drive new change in the subscription billing industry. With carrier billing, Netflix will offer payment integration through monthly recurring bills for subscribers on the Vodafone network. This will be an altogether new concept for subscribers on this network. Netflix might also explore newer subscription billing strategies for the app embedded on the Airtel and Videocon D2H platforms.
In addition, Netflix has always been as much about technology as it has been about its content. And this is where it is miles ahead of the competition. Specifically for India, Netflix is investing in newer technologies which will allow it to deliver buffer-free streaming and deliver rich content without eating into the subscribers' data plans. Also, with Netflix Open Connect
, the company aims to localise the traffic and provide a great viewing experience.
With the Indian mobile subscriber base growing at a rate of knots and the internet TV trend
about to explode, Netflix seems to be in the right place at the right time. But it's playing a slightly different game than the other OTT content players in the country. Will battleground India be conquered? We are watching closely!
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