Netflix plans to invest Rs 3,000cr in India; here's why it is confident about the Indian market

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India is estimated to have an online video viewer base of 300 million, which is expected to go as high as 550 million by FY23, according to a KPMG-Eros report titled Unraveling The Digital Video Consumer.

This makes India the second biggest market after China. Since Netflix is not in China, India is a crucial market for the platform.

Indians are spending as long as 70 minutes every day on OTT platforms, the report pointed out. Therefore, it doesn’t come as a surprise that in 2017, Indians viewed a web series in three days as against the global average of four.

If Statista data on user penetration of video (SVoD) streaming segment is taken into consideration, then India stands at 3.7 percent against the global rate of 38.6 percent and 38 percent in Sweden and the US, respectively.

While it looks like some of the mature markets may have reached their saturation point, it points at the untapped market in India for video OTTs to lure more viewers. Netflix CEO Reed Hastings had once said that they are looking at 100 million subscribers in India.

In addition, Netflix’s investment to produce Indian content is paying off in international markets as well.

Its first Indian original series Sacred Games (Season 1) had two out of three viewers streaming the show from outside India. Another original Ghoul, starring Radhika Apte, was watched in the US, the UK, Australia and Canada.

In these markets, 45 percent watched Ghoul with English dubbing and 37 percent watched it with English subtitles. There’s more, as Mightly Little Bheem became the second most-watched kids original animated series on Netflix worldwide.

No wonder Netflix is planning to invest as much as Rs 3,000 crore in India next year.

The announcement tells a lot about the Indian OTT space as well.

According to veteran producer Anand Pandit, “The nature of this investment in the Indian OTT space by Netflix clearly shows that India has emerged as an extremely serious market for this global behemoth. For one, it shows the potential of the massive audience in India. Second, the level of talent in every department of film-making. Third, OTT space in India is not just a trend anymore, it’s here to stay, and is the future of international media jams.”

India is a promising market and Netflix  is taking it seriously, with big investments in content. In fact, it claims that outside the US, the Indian market has seen the fastest-growing content investment. Now Hastings is focusing on many vernacular languages along with Hindi and English.

“Anybody who has to be a significant player in India, cannot ignore regional content. It has to be a big part of their strategy,” said Jehil Thakkar, Partner, Deloitte India.

Concurring with Thakkar, Siddharth Anand Kumar, VP, Films and Television at Saregama, said that regional market is one that has great potential to develop. “Talking to local audiences and serving them engaging content in their native tongue is one way of penetrating into the masses.”

Reaching out to the Indian masses was probably on Hastings’ mind when he decided to launch the mobile-only plan in India at Rs 199. In fact, India is the only market where Netflix has dropped its price drastically.

“With Netflix offering a Rs 199/month plan, shows are now being watched on phones and not just by the urban audiences, but also by the masses,” creator-producer Siddharth P Malhotra said.

According to Kranti Gada, Chief Operating Officer, Shemaroo Entertainment, Amazon Prime has been more aggressive than Netflix in terms of regional push. So, Netflix’s partnership with Shemaroo, which is focusing more on distribution and has huge content libraries in regional languages such as Gujarati, Marathi Punjabi, and Bengali, could play out well for Netflix.

Despite its investments and efforts, Netflix stays behind when it comes to user base. But, Thakkar says that it is a mistake to think that every OTT player is looking at big MAU (Monthly Active Users) figures. “The objective might be profitable growth,” he said.

If it is indeed about profitable growth, then Netflix is going in the right direction as it has seen 700 percent growth in India in the last two years.

Besides, Malhotra believes, “With the plans that they (Netflix) are introducing, the subscription base will multiply two fold or three fold, especially with the new shows which Monika Shergill or Ashish Singh will bring in, along with the films. I’m pretty confident that the user base will go way higher from where it is currently.”