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5 Factors That May Spoil The Show For Netflix In India

29/01/2016 8:19 AM IST | Updated 15/07/2016 8:25 AM IST
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Netflix's much-anticipated foray into India is here, a big addition to the company's empire of 190 countries and counting. Netflix reports that it has added more than 17 million subscribers in just 12 months. But while this underlines the growing popularity of the video on demand (VOD) market across the globe, will Netflix will be able to replicate its success elsewhere in India?

As with any disruption, concerns have been voiced. The primary concern for the Indian user of Netflix is the pricing. Let's put this in perspective: Netflix charges Rs 500 to 800 per month while domestic VOD service providers like ErosNow and BigFlix are far gentler on the pockets at Rs 49 and Rs 249 respectively. In addition, demand services of channels like Sony and Star TV (Hotstar) offer viewers the latest episodes of various television shows and a good number of movies at no cost. However, Netflix has access to large collection of international content while the local providers don't, and Indian audiences are going global.

Netflix charges Rs 500 to 800 per month while domestic VOD service providers like ErosNow and BigFlix are far gentler on the pockets at Rs 49 and Rs 249...

So keeping in mind this new generation of global viewers and their demands, here are a few areas Netflix should watch out for:

1. Erratic and unreliable internet connections and speeds

Most cities in India, especially Tier-2 ones, present a hurdle to the success of VOD service providers and Netflix is no exception. Coming up with an option that lets users watch their favourite shows and movies offline might be one solution, something that YouTube has addressed with their offline content feature. Getting a Netflix subscription might also require users in India to upgrade their internet subscription. Low speeds, high costs and limits on downloads are problematic enough while using YouTube, leave alone streaming a movie on Netflix.

2. Limited access to advanced gadgets and media

A vast majority of the Indian population does not have access to a smart television and fewer still to laptops and home computers. In terms of Netflix use, users need smart TVs or computers that are hooked to TVs for the best user experience -- something that is limited due to the availability of appropriate hardware to the masses.

Mobile phones are a different story, but watching movies for long hours on a handheld phone/tablet is certainly not as enjoyable as it is on a big screen. And companies like VuClip already have a firm grip on the mobile video content market.

3. Limited country-specific content

The access that Netflix offers to users in India has also left a sour aftertaste for many. Figures indicate that a whopping 93% of the content available to US users of Netflix is not available to users in India. The number of Bollywood movies available on Netflix in India is also way lower than that of its competitors.

Netflix has only 3% of the top 100 Bollywood movies while Spuul and Hooq come in at 25.3% and 21.2%.

Netflix has only 3% of the top 100 Bollywood movies while Spuul and Hooq come in at 25.3% and 21.2%. No prizes for guessing which one Bollywood aficionados will make a beeline for.

4. Social and cultural differences

The attitudes with which media and content are shared need consideration. With data becoming an addition to monthly budgets in India, the young working professional class keeps a close tab on their internet usage. The mandatory credit card details that users need to provide in order to create a Netflix account is another similar issue. The category of Netflix users (young adults) in India tends to not own credit cards of their own.

Also, streaming content may not become a popular practice. Taking into account all of the cultural, social and economic differences we have with the West, it might be interesting to pay attention to how Netflix will interact with these challenges. Some organisations have responded well with culture-specific market behaviour in the country -- for example, Amazon's introduction of the "Kirana Now" services and Uber's cash payment option.

5. Censorship and VPN practices

The extent of censorship and lack of content on Netflix India and other countries has led many to use VPNs (virtual private networks) to access Netflix USA. (VPNs basically trick Netflix into thinking that the users are residing in the US, whereas in reality they are from some other part of the world.)

Netflix is threatening to crack down on the use of VPNs which many are using to access Netflix USA... this may work against the brand.

To add fuel to the fire, Netflix is threatening, albeit not very convincingly, that it will crack down on the use of VPNs which many are using to access Netflix USA. Whether this action, if taken, will help Netflix add more users to Netflix India or not remains to be seen. But it might work against the brand and reduce the overall user base because at one end Netflix is not providing international content to Indian users, and on the other, it is stopping the only means by which users can access what they want to watch.

All in all, it seems to be a game of "wait and watch" to see who emerges as the leader in India's VOD market.

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