By Anirudh Jain
After its foray into the international market in 2016, Netflix now boasts 120 million users worldwide, with nearly 5 million of them from India. This coincided with Reliance Jio launch in November 2016. With the access to free data, the number of Indian users soared and there were more Indians online, with the majority of the time spent on video consumption. Netflix CEO, Reed Hastings, has praised Jio for their efforts to democratise the internet through their affordable data plans. Reliance Jio has been a transformational network in India and has brought down data cost massively. There are other people around the world having that kind of impact and can get people to use the internet more. We hope someone would do a Reliance Jio in every other country, says Reed Hastings in an interview with Economic Times. Though the OTT market is congested with nearly 30 OTT players and 90 million OTT viewers, Netflix is investing heavily in India to not only be relevant but also a leader in the coming years.
OTT battleground
While Jio did benefit Netflix, it has also benefited other OTT players as well. One-line video consumption grew by five times in India by 2017, with small towns logging as the highest jump, however, Netflix remains behind their competitors. As of 2017, Hotstar had the highest number of active users, with 63 million whilst Netflix has only 4.2 million. The top spots are taken by Hotstar, Voot and Prime. In addition to this, according to a report by FactorDaily, Jio is looking to enter this space. Jio is in talks with 18 to 20 video production houses and is looking to launch exclusive content on their platform JioTV and JioMovies. This will cover content in various formats like reality television, movies, series in genres like comedy, action, drama and more. Viacom 18, AltBalaji and Arre already have partnerships to launch exclusive content on JioTV and the streaming of Bose: Dead or Alive is an early sign of the deal. With regional content, Jio plans to make a foray into the Tier II and Tier III cities and might disrupt the OTT market in a way it disrupted the telecom market.
Netflix: Its India strategy
Netflix has a focused strategy for India which will be in various phases and domains. The strategy ranges from partnerships, payments, technology and content. Netflix has announced partnerships with key d2h and mobile operators. Vodafone, Videocon and Airtel being the three. With Vodafone, Netflix is planning a bill payment integration for pre-paid customers so that the monthly subscription fee for the service is bundled with the mobiles billing. With Airtel and Videocon, the Netflix app will be integrated into the set-top boxes, allowing users to access the services with a dedicated remote button. “We are delighted to have Netflix as a partner on our HD Smart Connect STB. This partnership strengthens our DNA of innovation by providing an instant TV screen experience for Netflix users in a seamless manner,” added Saurabh Dhoot, Executive Chairman, Videocon d2h.
Demonetisation, combined with the internet access, has also given a spur to various mobile payment platforms and Netflix is open to partnering with them. They will experiment with various payment options like weekly payments so that customers can pick and choose the plan that suits them. ”With demonetization, there has been a rapid acceleration (in stuff like mobile payments) so we are looking at seeing who’s emerging as the new payments platform that’s great for us to work with”, Hastings said.
At the Mobile World Conference, Netflix announced new video formats which will consume less data, a key feature for Asian markets like India. It took years for Netflix to reduce their data consumption to 1 and a half megabits, which they brought down 200 kilobits. Now they have announced that they are working on bringing that down to 100 kilobits. For a mobile screen on 4 to 5 inches, at 200 kilobits rate, you can watch content for up to 25 hours on 1 GB data pack. Their app also features an offline mode similar to YouTube.
A cat and mouse chase
This is a battleground where Prime and Netflix are butting heads. When one announces a content partnership the other has a fitting reply. For example, while all Salman Khan movies will be available on Prime, all Shah Rukh Khan movies will be available on Netflix. When Prime announced that they will have more than 10 standup comedy specials by Indian comedians, none featured a female comic. Netflix jumped on this opportunity and streamed Aditi Mittals stand up special on their platform. While this cat-and-mouse chase is evident, there are certain spaces where Netflix will not venture, that is, the local content space. Netflix has announced seven original series for India: Sacred games, Leila, Selection day, Ghoul and more. This will primarily be in the Hinglish segment, focusing on the premium audience. Netflix has stood by high-quality content and will be focused on the same. Our core strategy is to tune everyone out, try to stay focused. If we produce great series and movies, customers will love us. If we get distracted and try to copy other people like do our own prime service, we will never succeed with that. Their strategy is to win by being broad with a little bit of everything, added Hastings.
With the largest open media space of 300 million phones, India is proving to be a more lucrative market for Netflix than China, which has their walled garden philosophy. The winner of the battle for the OTT space will be determined by the one who has the best content, technology and partnership in place and as of now, Netflix seems to have all three in place.