#167 Netflix in India
When Netflix launched in India in 2016, the future seemed bright. With 200 million households having TV sets, India was and is a large market with a strong movie culture. It seemed to be ripe for Netflix’s combination of global hits and local productions. As it did in other markets, Netflix launched by serving a segment of wealthy, young, cosmopolitan consumers with internationally successful shows such as Stranger Things, and then hired local talent to locally produce movies and series with broader appeal. Bollywood, too, welcomed Netflix with open arms. Ever since Netflix’ big hit Sacred Games and several other shows that never even made it into a second season such as Ghoul, Delhi Crime or Leila or the acclaimed movie Haseen Dilruba, things didn’t develop according to plan. The goal of the global streaming giant to sign up to 100 million subscribers in the second most populous country in the world seems to be out of reach. Today, Netflix only has approximately 5.5 million subscribers. And to add insult to injury, Netflix competitor Amazon Prime Video has an estimated 16-19 million, and Disney Plus Hotstar and estimated 46-50 million paying customers – both growing at a significantly faster pace than Netflix. Much of Netflix’ failure is attributed to an approach that was a bit too generic and a bit too heavy-handed. Other than Amazon Prime, Netflix failed to recognize that India is a highly diverse market with different regional preferences, ethnic groups, religions and languages. Shows that resonate with the cosmopolitan elites in Mumbai or Delhi, simply don’t always cater to the tastes of a broader audience in other parts of the country. In addition, many industry insiders complain about Netflix’ formulaic approach in content-production. Amazon Prime, on the other hand, offers programming in ten different languages in India. And Disney early on secured the rights to air Indian Premier League cricket matches, and it offers other sports programming – a major draw for many viewers in India.
Similarly, Amazon Prime and Disney Plus Hotstar early on understood the price sensitivity in the market. When Netflix launched, its monthly subscription was 499 Rupees (approximately $7.50) per month while Amazon Prime and Disney Plus Hotstar stayed under 100 Rupees (let alone the low price points of dozens other competitors). While even $7.50 for a month of streaming may seem like a steal to consumers in the West, one wonders how positioning a product at almost five time the price of a competitor seemed like a good idea, especially in a market with significantly lower purchasing power. Over time and after having won their customers’ confidence, both competitors were able to slightly increase their pricing while Netflix had to implement two major price cuts since its launch. One of the adjustments included discounted pricing for mobile customers at 149 Rupees, which didn’t even take into account that mobile subscriptions in India are canceled much more frequently and that some laws in India require monthly renewals for mobile subscriptions.
Netflix probably won’t leave India any time soon, but with more than $400 million invested in local productions (not to mention other expenses), the market certainly hasn’t turned out to be the Shangri-La that it had expected it to be. Netflix’ global script seemed to have failed the company.
July 3, 2022 @ 10:48 am
Netflix, it seems, has not done its homework here and has not taken a closer look at the Indian market. With the two competitors Amzon Prime and Disney Plus Hotstar, Neflix has failed completely. But how can this even happen to such a giant as Netflix? Was it the thought that India was just waiting to stream via Neflix and nothing can go wrong anyway or did they simply fail to understand that India is a diverse market with diverse religions, languages and regional preferences?
I’m guessing the former because Neflix, like a blind fish, didn’t think about price sensitivity or legal regulations. Again, I ask myself: How can something like this happen to a giant like Neflix?
With more than $400 million dollars in spending, hopefully Netflix will approach things differently next time and not view a country as completely uniform. With such an amount I guess it has certainly hurt a bit…
As a marketing student, I think Neflix should understand that at the end of the day, the focus should be on people and their needs, not just on hard cash.
Lisa Marie Huber
July 3, 2022 @ 7:47 pm
I’m surprised that a company like Netflix, which has managed to be an essential service in so many countries, has not managed to establish itself in the Indian market. And didn’t even pay attention to things like local laws and regulations.
This case shows once again that you can’t be too sure of your universal “recipe” and that you have to look at each market anew. Not even within one country are cultures the same. And this is not only the case in India. Even if you look at Austria and Germany, there are big differences between the regions (the further away it is).
Furthermore, when offering fewer benefits than the competition, and this for a price that is 5 times as high, you don’t even have to consider the different cultures within a country. I guess that probably doesn’t go down well in any culture. 😉
July 5, 2022 @ 5:12 pm
Netflix ends 2021 with over 220 million subscribers worldwide. But the question on
my mind is: What could Netflix have done better when it entered India?
Meeting the culture at eye level is a success factor when entering a new country. In
India, a wide variety of cultures and religions come together. However, access to
western culture and various other media has brought about enormous changes
through the process of modernisation. Netflix also provided criticism in 2020: in the
series “A Suitable Boy”, a Hindu woman and a Muslim man kiss in a Hindu temple.
An Indian party felt attacked regarding violation of religious feelings and questionable
scenes. The exchange of affection in public is not welcomed. Violence and
disrespectful behaviour are shown in films and series. This is exactly what India
wants to avoid with stricter censorships. It took time (4 years!) for Netflix to release its
streams in the local language.
So why not get to know the cultures and interests of a country better before entering
July 6, 2022 @ 3:40 pm
For me personally, it looks like Netflix has rated itself as successful, popular and flawless. And because of this, they probably didn’t bother to do proper market research before entering India. Which is a big mistake because we know that over 20 million households in India have a TV. With a proper market research Netflix maybe would have seen that some exclusively for India produced shows will not catch the audience across the whole country and they wouldn’t look so overpriced next to their competition Disney Plus Hotstar and Amazon Prime Video.
Of course, not everything can be predicted with market research, but certain mistakes can certainly be avoided if companies like Netflix don’t rely on the success strategies of other country entries.
July 8, 2022 @ 10:38 am
Netflix has already made a name for itself worldwide. Especially in Europe and the USA. However, these are two markets that are different but very similar in the consumption of movies and series. In contrast, India is a completely different market. In India, there are not only linguistic differences but also cultural ones, which are also reflected in this industry. Netflix should have informed itself better in advance and analyzed the market more closely, in my opinion. The market entry with such a high price in contrast to the competition does not bring the desired subscribers.
Netflix has certainly learned from this incident that the previous market strategy is not adapted to all countries. It is important to deal with the new potential markets in the future and to develop an adapted strategy.