Why is Netflix failing in India?
OTT or streaming platforms have been a constant source of entertainment. Most of the population has a subscription to at least one brand operating in the industry, it could be shared or purchased. Companies like Netflix, Zee5, and Voot have a plethora of content to keep us hooked, but most important is the quality of movies or series which attract consumers.
If we consider the customer base of these corporations, then Netflix is 3rd with 5.5 million subscribers, which some may think is a good number. But not for the company because the competitors have given a significant lead in terms of subscriber base, even Hoichoi (a regional platform) has over 10 million users. Netflix has recently lost thousands of consumers and also the shares have plummeted. Reed Hastings who leads Netflix has expressed frustration since it has not been able to attract customers, despite the country being one of the biggest markets. Disney+ Hotstar and Amazon Prime lead the industry with 50 million and 22 million buyers, Reed’s company has only 5.5 million consumers.
Some might argue that this is because people share their credentials, which can discourage potential customers. This could be one of the reasons but not the major one as the company’s strategy and policies are to be blamed. Let’s see in detail the reasons for Netflix’s failure in the country.
Things that went wrong
Advertisements
The company hasn’t included adverts in its offerings, and its business promise was to enhance user engagement. Netflix eschewed marketing in contrast to rival video providers since it believed that the operation could be more effective. The video giant’s CEO made a fundamental change in the company’s philosophy by saying that it intends to integrate ads in the coming years. As they have placed a premium on service quality, this is directly at odds with their product’s objectives. This action was taken as a result of Netflix losing around 2 lac subscribers.
Innovation
Netflix is renowned because of its top-notch creative programming. Nevertheless, some users believe that video giant has ceased creating original content recently. It is producing monotonous, repetitive material and they have forgotten the importance of what made them successful.
Bundled offers
You must be aware that telecom giants like Vodafone and Airtel provide subscriptions for Amazon, Disney+, and other streaming platforms. Even Netflix was available along with the telecom plans. But suddenly it took the back seat for Reed-led American giant. This move is surprising because the communication sector companies generated a whopping 85 percent of viewership for the OTT platforms. Netflix’s decision to be a lone ranger and its strategy to invest huge money has backfired.
Pricing
Netflix is considered to be a premium streaming platform due to its pricing. The company recently announced price cuts specifically for the Indian market. But before that, the plans ranged from Rs 499 to Rs 649. By international standards, the prices are low but if compared to competitors in the market the charges were very high. Netflix is among the few premium platforms which entered the market. Services like HBO Max and Showtime which particularly have similar cost-based issues haven’t started operations in the country. If we consider the market globally then only Amazon Prime operates and due to its region-specific policies as well as a good business strategy, has been able to attract a subscriber base.
The Indian market is not only one of the most price-sensitive zones in the world but also among the cheapest regions for the OTT industry.
Content
In this aspect also, the organization has not been able to do well. Netflix has started to bore customers not only because the movies or series are becoming repetitive as well as monotonous, but also because the target market is metro cities that love English content. However, the platform has content that has started to discourage the subscribers and they are getting attracted to the competitors.
The next big issue is the lack of local or regional content. Local entertainers have been a major part of strategies for OTT companies like Zee5 or Voot Select. The company’s focus was majorly on Bollywood, but with people getting attracted to regional content Netflix has recently started to invest more in regional viewers, but not at a scale of the other contenders.
The only sector Netflix has been able to have a stronghold is SVOD or Subscription video on demand. Revenue and user base have been huge. Considering the SVOD market without sports it earned 1500 Crore rupees, which is roughly 35 – 40 percent of the sector’s total revenue.
Netflix has lost in the sub-continent because of its strategies and policies. It tried to be successful with an approach that tasted success globally. However, it failed miserably in the country. Though they are revising and working to change, it will take time for the firm to attract viewers. Reed Hastings along with the board must be patient as the company is fairly new and the boom in regional content is in the starting phase. Netflix has some good content and we hope that it does not leave the country after growing frustrated with being short of the expected returns.
If you want to share anything on a topic you care deeply about, send us your submission. Here are the guidelines.
