Netflix has turned to aggressive promotions and discounts in India as it tries to gain ground on Amazon and Disney after investing heavily in the country’s promising but fiercely competitive streaming market.
Viewers in India will be able to watch Netflix content for free on Saturday and Sunday this week as part of a so-called “StreamFest”, the first big promotion of its kind the US company has run globally.
It is one of a growing number of offers and discounts that Netflix has introduced in India as the streaming giant reassesses its premium approach in price-sensitive market.
Media Partners Asia, an advisory firm, estimates that Netflix will have about 5m subscribers in India by the end of 2020. That tally is well behind Amazon’s 17m and Disney’s more than 25m, the market leader thanks to its acquisition of local platform Hotstar, according to the firm.
“They’re not only having to get their content right, but they’ll have to work on better economics,” said Mihir Shah, vice-president of MPA. Netflix wants to “showcase [its service] to a much more mass market”, he added, referring to this weekend’s promotion.
In 2018, with Netflix’s India business still in its infancy, chairman Reed Hastings said he hoped to reach 100m subscribers in the country, underscoring how global media groups view India as the next great growth market.
Netflix invested Rs30bn ($406m) to develop its roster of Indian content in 2019 and 2020, including original films and shows like the Emmy award-winning Delhi Crime.
But the company has hit a long-running challenge for multinationals entering India, many of which have struggled to grow in the country while charging prices on a level with other markets.
Despite India’s 1.3bn population, economists estimate that the proportion with spending power comparable to western markets is 50m or less. Companies such as Harley-Davidson have pulled out of the country altogether after struggling to balance price sensitivity with profitability.
Companies “come with their global strategy, global pricing, global quality of products”, said Jayanth Kolla, founder of consultancy Convergence Catalyst. “Indians love the global quality but not the global prices.”
Netflix introduced a cheaper, mobile-only plan priced at just Rs199 a month last year. That is less than half the price of its other packages, but its services in India are still costlier than Amazon’s and Disney’s.
Netflix has taken other steps to broaden its appeal, including launching a Hindi-language interface and tying up with India’s largest telecom operator, Reliance Jio.
The company declined to comment. But on an October earnings call when it announced this weekend’s promotion, chief operating officer Greg Peters called it “a great way to expose a bunch of new people . . . and hopefully get a bunch of those folks to sign up”.
Mr Kolla said that if the promotion can convince new viewers that Netflix’s content is superior to that of its rivals, it “will take a win”.
Additional reporting by Alex Barker in London
Your crucial guide to the billions being made and lost in the world of Asia Tech. A curated menu of exclusive news, crisp analysis, smart data and the latest tech buzz from the FT and Nikkei