Streaming wars: Netflix tries to beat the India blues as rivals race ahead

More Indian languages, bigger films and shows, and an ad-supported version are being rolled out as the global streaming service works to crack one of the world's fastest-growing streaming video market

Sanjay Leela Bhansali’s Gangu­bai Kathiawadi is as mainstream as Hindi films go. The Alia Bhatt-starrer, inspired by a true story, grossed over Rs 200 crore at the box-office earlier this year. This week, Netflix released it with a high-decibel campaign with ads across the front pages of major newspapers. It is the sort of thing Amazon Prime Video, which acquires most of the big blockbusters, or SonyLiv, which is trying to establish itself, do. It is also a sign that the $30 billion Netflix is now doing everything possible to crack the India market.

In December 2021, over five years after it entered the country, only 5.5 million of Netflix’s total subscriber base of 222 million came from the fastest growing streaming video markets in the world. Compare that with Amazon Prime Video, which got 19 million of its 200 million subscribers, or Disney+, which has a whopping 46 million or over a third of its global 130 million, from India. When Netflix dropped prices by 60 per cent in December 2021, the hope was that it would see a surge in subscribers. A ripple is what it seems to have got.

“We have seen a nice uptick in engagement in India. So, we’re definitely taking it in the right direction,” said co-CEO Ted Sarandos in earnings call last week. Though the India numbers are not available, globally Netflix lost 200,000 subscribers. Password sharing, more competition and the shutdown of its Russia service in the aftermath of the attack on Ukraine are among the reasons. At an estimated Rs 1,700 crore in revenues, Netflix remains a largish player in the Rs 14,000-crore streaming video market by value. But when it comes to getting more users, the world’s largest subscription video-on-demand (SVoD) player and the one that birthed this business seems lost.

“We’ve seen an ex­citing response to the price change in India. We are focused on ease of access through partnerships with Tata Play, Airtel, Jio and payment methods like UPI Autopay. We have an exciting slate ahead and will continue to improve every aspect of our service, like we do everywhere else,” said a Netflix India spokesperson. Mihir Shah, vice-president, Media Partners Asia, reckons that Netflix “should hit 7.5 (million subscribers) by the end of the year, if it wants to deliver some level of revenue growth. From here on it needs a steady delivery of content”.

That is where Gangubai Kathia­wadi or SS Rajamouli’s RRR, for which Netflix just picked up the Hindi streaming rights, come in. The Telugu superhit has crossed Rs 1,100 crore in ticket sales globally. Netflix now commissions productions in seven Indian languages and is also dubbing some of its popular shows like Money Heist in Hindi, Tamil and Telugu. “Last year, our 28 Indian original series and films were across 11 genres, eight formats and seven languages,” said the spokesperson. That is the second sign of its attempts to grow in India. Unlike Netflix, Prime Video has been aggressive about lic­ensing and commissioning from all across India. With hits like Pushpa (Telugu) and Soorarai Pottru (Tamil) under its belt, it now has a firm foot in the South, which brought in 60 per cent of India’s 102 million-odd OTT subscribers (2021).

The Netflix conundrum: “Glob­ally, Netflix is known for creating trends; in India it is simply following trends,” said Constantinos Papava­s­silopoulos, associate director, consu­mer research (and India expert) at UK-based Omdia. That is strange considering the advantages it started with.

Netflix has the best product on offer, especially if you go by user interface. On programming, it began well with the critically acclaimed Sacred Games. Ever since it entered India in 2016, it has been committed to this market investing more than $400 million on shows and films such as Delhi Crime, Mai and Little Things.

There are many theories on why Netflix continues to struggle with India even as rivals race ahead. “The Indian content is simply not good enough. The perception in India is that Netflix offers great international content. People take it for one month when 3-4 big shows are coming in and then unsubscribe. And Netflix does not offer an annual deal (unlike its key rivals),” Shailesh Kapoor, CEO, Ormax Media, pointed out. He reckons that the whole “pricing and content perception (for Netflix) is niche and international”. Not surprising since international shows have done better on Netflix than Indian ones. According to Ormax viewership estimates, The Fame Game had an audience of 8.8 million Indian viewers against 15.5 million for Money Heist.

The Viral Fever (TVF) has been creating content for over 10 years now. It has worked with Amazon Prime Video, Zee 5, YouTube and SonyLiv. In 2019, its show Kota Factory, which delves into the lives of hundreds of thousands of students coming into the eponymous small town in Rajasthan to prepare for competitive exams, released on YouTube. Netflix picked up season 2 for release in September 2021. It was the only Netflix India show that made it to the Ormax list of the top 10 Hindi shows on SVoD in 2021. Vijay Koshy, president, TVF, said a third season is currently in discussion.

A second and third season “is a huge measure of success. You already have an audience. Multiple seasons tap into it. It makes things easier to plan and execute and also brings economies of scale. Netflix has used them very well internationally with Stranger Things (in its fifth season now) and Ozark (four so far),” said Koshy. That, however, did not happen with many of Netflix India’s successful shows. Now the second season of its big hits — Delhi Crime, Yeh Kaali Kaali Ankhein, and The Fame Game, among others — are on the cards. That is the third sign of the change at Netflix.

To be fair, Amazon Prime Video comes from a firm that is trying to sell shoes and groceries with entertainment thrown in. Disney+ Hotstar had, so far, the rights to the biggest sporting event in India, the Indian Premier League or IPL. Netflix doesn’t seem to have any other layer of content or revenues unlike its global rivals. That too will change going by the announcements made during the earnings call. There is talk of getting into gaming and building an ad-supported layer, a blasphemy by Netflix’s standards. But these will work in India bringing in millions of users, say analysts. After all, the ad-supported YouTube and MX Player are the largest OTTs in India.