Netflix is finding India to be a tough market despite lowering price points and pumping in millions of dollars into developing local content.
“The great news is 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,” Reed Hastings, co-founder and CEO, Netflix said during the company’s earnings call.
Netflix had recently reduced its subscription fees by up to 60 per cent as part of its two-prong strategy to make it the go-to choice for entertainment for Indians. The big challenge for Netflix, according to Hastings is the presence of well entrenched cable TV operators. “What’s unique about India is cable. It is about $3 per month per household. So radically different pricing than the rest of the world, which does impact consumer expectations,” he said.
‘Learning Indian tastes’
Greg Peters, Chief Operating Officer, said the company has been learning more about Indian consumers’ tastes. “We are thinking about go-to-market and the partnerships that we have and making sure that we’re available with those partners at that place where more people in India will find us. And that gets to payments and many, many, many things. And when we looked at it and we saw sort of the sum total of all those activities. We felt it was the right time to decrease our prices there, to increase accessibility to all of that sort of those incremental value or features that we’ve been trying to deliver to the market to more Indian consumers.”
Peters said it’s still very early to determine the impact on revenues in India. “Some of these effects, like retention, it takes a couple of months to get a very clean read on it. But the early data that we are seeing very much supports a positive read on that lens of revenue maximisation through these changes,” he said.
Peters said Netflix is still quite bullish that India isn’t fundamentally different from some of the other market like Brazil where the company had to face initial challenges before succeeding.