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.