Netflix to double investment in India in 2017, plans its first office in Mumbai
India has seen the highest growth among all Asian markets for Netflix, which has entered a slew of partnerships to reach out to the country's 300 million plus Internet users
Putting India on priority, Netflix is set to double its investment in content here in 2017. Overall for 2017, Netflix has a ‘USD 6 billion content budget and plans to launch over 1,000 hours of original content’. As per a spokesperson for the OTT (Over-The-Top) player, it is also set to launch its first office in Mumbai soon. “The size and potential of India is strategically important to the next phase of our growth and setting up an Indian office in the near future will help us support that,” says the spokesperson.
The company’s CEO, Reed Hastings, was quoted by media reports as saying that the Mumbai office will be as large as the Tokyo office. He further mentioned that India had seen the highest growth among all Asian markets for the company's streaming service and that the company now wants to be among the top five apps on a consumer's phone here.
However, Netflix still has a long way to go in India. At 4.2 million subscribers in over a year according to KPMG FICCI Report 2017, the global streaming service has to catch up with players such as Hotstar (63 million), Voot (13.2 million) and Amazon Prime Video (9.5 million).
When asked about the overall experience so far, Netflix seems positive, “We are thrilled about our reception with consumers in Asia. We started in 2016 at 75 million members and today, we are at over 93 million. Our customers in India are seeing how they can have greater control over their entertainment experience with a service like Netflix.”
To get more subscribers, Netflix has forged partnerships with telecom players with a large user base. “We recently announced partnership deals with three leading Indian telecom operators: Airtel, Videocon, and Vodafone. These partnerships are important to the way we will reach the diverse Indian market. Together Airtel Digital TV, Videocon, and Vodafone make up millions of users and teaming up with them will make it much easier for the Indian consumer to watch Netflix, whether on a set-top box or on mobile,” shares the spokesperson.
Further, Netflix plans to tie up with Reliance Jio, seeking to reach out to India’s 300 million plus Internet users. The company also wants to enable new payment platforms in India, including partnerships with mobile wallets, according to reports.
Priority on content
Content is definitely the topmost agenda for Netflix as it has reportedly set aside a Rs 2,000 crore budget exclusively for acquiring content in India. The spokesperson further shares, “We want to become a leading producer and distributor of high-quality Indian content. This year, we will double down on Indian investment looking to curate a compelling content library encompassing original and licensed titles.”
“On the originals front, we are focused on finding great Indian stories – not just for Indians, but for the world. ‘Sacred Games’ is our first announced Indian original series and partnering with a top studio like Phantom Films speaks of the kind of quality we are looking at. Another area is top quality local stand-up originals like our exclusivity with Vir Das and we have just signed on female comedian Aditi Mittal,” he adds.
Netflix’s emphasis on expanding its local content catalogue is apparent from its partnerships with Indian production houses such as Red Chillies Entertainment and Viacom18 Motion Pictures. The spokesperson explains, “On local licensed content, we already have partnerships with Shah Rukh Khan’s Red Chillies Entertainment and Viacom18 and their films will come on the service starting the second quarter. With local content, we aim to strike a balance with mainstream, star-driven films with wide appeal (For example, ‘Dear Zindagi’, ‘Udta Punjab’ and ‘Pink’) and independent films where we can work directly with filmmakers here to bring their personal vision to the world (For example, ‘Brahman Naman’, ‘Visaranai’, India’s Oscar entry this year, exclusive to Netflix; and ‘Umrika’ - a Sundance favourite in 2015).”
Now Netflix is reported to have closed a long-term deal with Aamir Khan Productions, worth Rs 500 crore, to bring the entire catalogue from the latter to its on-demand video streaming service.
It has earmarked an investment of billion dollars in technology. “We are increasing pace in being even more locally relevant – meet the Indian consumers’ needs, cater to the diversity and potential of this market. We have a USD 1 billion investment in technology this year to optimize the Netflix experience for lower-bandwidth streaming, and improve the overall user experience,” the spokesperson states.
Countering India’s bandwidth problem
India’s average bandwidth speed has always been a challenge for OTT players despite its improvement from 3.5 Mbps to 4.1 Mbps. Netflix has tried to work its way through that with its own set of solutions, including a download feature. The spokesperson offers some of the solutions, “Our adaptive streaming technology adjusts the picture quality on the fly to ensure the picture looks its best regardless of your download speeds. The way we encode our videos will enable viewers to eventually watch up to 25 hours of Netflix on just 2GB of data, and stream quality video at speeds as low as 200 Kbps. We also recently launched a download feature for users who want to watch on the go or do not always have stable connectivity to stream on mobile devices and also on Windows 10.”
Competition heats up
Repeating himself on the query regarding heightened competition from its other 29 OTT players, especially Amazon Prime, the spokesperson says that the latter is getting aggressive with its content partnership deals with big production houses from Bollywood. “In today's world, when there are so many options for entertainment, we compete with anything consumers might be doing rather than watching Netflix, and that can be reading, playing video games, or dining out. Ultimately, our goal is to deliver a service that makes people want to watch Netflix rather than go to another form of relaxation and entertainment,” he adds.
However, Hastings, on his India visit earlier this month, acknowledged the competition from Hotstar, YouTube, and Amazon Prime, according to media reports.
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