With competition heating up in the over-the-top (OTT) market, with India having potential of 1 Bn internet viewerships, world’s popular online paid TV network Netflix may as well consider tweaking its premium strategy. The ad-free content provider is, however, satisfied with “getting success, getting established, getting reputation going” in India.
Operating on user-based revenue model, Netflix is known for adding best of the contents for audio-visual entertainment, and is continuously improving in terms of making viewing process easier. Company’s co-founder Reed Hastings asserts Netflix to have become “a small fraction of very societies’ overall viewing” and continually seeks to grow in the segment.
For this, Netflix which launched its service in January 2016 in India, recently started broadcasting company’s first original Hindi-language thriller series ‘Sacred Games’. According to Netflix chief content officer Ted Sarandos, the series has already been a ‘great success’. Prior to this, the company had launched Indian film ‘Lust Stories’.
In this direction, Netflix also announced three Indian original productions — Ghoul, Leila and Crocodile, in addition to the four productions already in process which include Selection Day, Again, and Bard of Blood.
In terms of its viewership in India, Reed agreed to the fact that Netflix lags behind the likes of Google-owned free content provider YouTube, especially Star India-owned Hotstar, which charges only for premium contents. It also competes with Amazon’s Prime Video. However, Indian viewerships are also largely categorised in terms of viewing experience.
Reed said, “We are still a niche product and have a long way to go.. expand languages and many other aspects to be able to be a broad Indian product.”
While viewers may keep guessing if Netflix may or may not tweak its premium strategy, company’s chief product officer Greg Peters said the team to be constantly testing its pricing model. “What pricing strategies work best for our members around the world, what features can be added…to make it both a revenue positive having a consumer fair approach,” Peters said.
Sarandos added that the price point is mostly relevant to value proposition. “Indian consumers finding a lot to watch on Netflix and having a great time doing it; and if they are, that price point becomes a very valued proposition,” he said.
Netflix costs ranges from $7.7-$12.35 (INR 500-INR 800) a month in India depending upon the plan. It measures its viewership as per minimum view hours. “The numbers is growing and we are super excited about that,” said Reed.
Company’s top-notch were commenting on “Netflix Q2 2018 Earnings” on 16 July after reporting its second-quarter earnings after the market closed on Monday.
In its Q2 2018 earnings, Netflix has added 5.15 Mn subscribers, with 4.47 Mn international subscribers, and a revenue generation of $3.91 Bn.
India is estimated to emerge in the top 10 lists in the global OTT market by 2022 with revenue of with over $803Mn (INR 5,500 Cr), according to latest report by PwC, an audit and consultancy firm. There are nearly 30 OTT companies running OTT service in India.
Update: This story was updated at 2 pm on July 19, 2018, to correct an error. It earlier said that Hotstar is owned by Sony India. Hotstar is owned by Star India.