PROJECT REPORT

On

“INDUSTRY ANALYSIS OF INDIAN AIRLINES

&
MARKETING STRATEGIES OF OVER THE TOP
PLATFORMS”
S no.
CONTENT

1 Executive Summary and Objectives

2 Industry Analysis (Detailed Study)

 Airline Industry
 Over the top Industry

3 Financial Analysis (Balance Sheet and Ratio computation)

4 Survey Data Visualisation, Tabulation , Conclusion

5 Advertising Strategies

 Advertisement Spendings
 OOH Campaigns
 Social Media Presence
 Digital Marketing Strategies

6 Pre and Post pandemic study

 Shift in strategy due to the coronavirus pandemic

 Change in revenue and operations

7 CONCLUSION
 8 Project Learnings and References

EXECUTIVE SUMMARY :

This project comprises of detailed study of the industry dealing in the following two
products/services:

 Civil Airlines
 Over-the-top media streaming services

For a more in-depth study of the product and the industry, the following brands are chosen
under the

above-mentioned product categories.

o INDIGO , AIR INDIA (Civil Airlines)

o Netflix, Amazon Prime Videos(OTT Media Streaming)

The project was a part of the Summer Internship Programme (SIP) which covered a duration of
approximately two months. As a marketing major, my task was to study the broad aspect of the
market operations of the brands chosen in the two industries.

The current millennium has unfolded new business rules most the significant of them being that
company has to constantly look into minds of the customer. Customer loyalty plays a significant
role and today securing that loyalty requires quality right price and of course last but not the
least i.e. creating awareness about their service. As a trainee, I was given knowledge about the

way and style of their working, their routine and their environment.
The study under this project opened door for broad research on the civil airlines in India and the
Indian OTT platforms . It deals with studying their business model, marketing strategy, pricing
strategy and all other business aspects which drive its growth and market share in every
possible manner. Detailed study includes the following points:

 Comprehensive company profiles covering the product offerings, key financial

information, recent developments, SWOT analysis, and strategies employed by the
major market players.
 Segmentation Targeting and Positioning (STP) of different players in the sector and how
it differs.
 Study of plans and strategy formulation by different players to acquire and retain market
share.
 Work on some statistical data and run analysis to find out the trends and future growth
opportunities of both the industries.
 Rolling out of online customer survey form to solicit responses from the customer and
carrying out data interpretation and gaining insights from the same.
 The change and effect in the operations of the major players of both the industry after
the unfortunate encounter of pandemic(Covid 19)

The source of this research includes recent trends, technical writing, statistical data from
company websites, trade associations, and other web sources. These have proved to be
reliable, effective, and successful approaches for obtaining precise market data, capturing
market participants’ insights, and recognizing business opportunities.
Objectives of the Project :

 The prime objective of the project undertaken was to study and analyse the concerened
industry and its features and a detailed study of the brands competiting in that industry.

 To analyse the marketing strategies and tactics adopted by each of these brands to
survive, grow and prosper in their respective market.

 To study the advertisement strategies of the companies. This includes both online and
offline medium of advertising , i.e., Out of House campaigns, digital presence(digital
marketing strategies) and the advertisement campaigns rolled out by the brands during
festive and other special occasions.

 To study the developments and advancements introduced by the companies to tackle

the disruptions caused due to the unprecedented situation of the pandemic. Consumer
views on the change in the offerings and strategies in the post corona era were also
solicited through the survey form.

 To study the customer preference and the satisfaction level derived by customers on
availing the services.

 A comparative study was conducted to analyse the differences in the strategies and
policies adopted by the brands. The objective was to obtain customer response on the
performance of a company in contrast with other within the same industry.
 INDUSTRY ANALYSIS :

Indian Aviation Industry

OVERVIEW:
India is the 9th largest aviation market in the world with a size of around US$ 16 billion and is poised to
be the 3rd biggest by 2020. India aviation industry promises huge growth potential due to large and
growing middle class population, rapid economic growth, higher disposable incomes, rising aspirations
of the middle class and overall low penetration levels. Civil aviation industry in India is experiencing a
new era of expansion driven by factors such as low cost carriers, modern airports, and foreign direct
investments in domestic airlines, cutting edge information technology interventions and growing
emphasis on regional connectivity. Civil aviation sector has been growing steadily registering a growth of
13.8% during the last 10 years. The air transport in India has attracted FDI of over US$ 569 million from
April 2000 to February 2015. The Indian airports have a combined capacity to cater to 220.04 million
passengers and 4.63 million tonnes cargo per annum and handled 168.92 million passengers and 2.28
million tonnes cargo in 2013-14. As per estimates, passenger traffic at Indian Airports is expected to
increase to 450 million by 2020 from 159.3 million in 2012-2013. Looking at future air transportation
requirements and desire to become a global player in developing/commercializing aerospace
technologies, India is rapidly building capabilities to emerge as a preferred destination for
manufacturing of aerospace components. Over the next decades, India undoubtedly has the potential to
become a significant part of the global aerospace supply chain as India offers cost advantages of
betTheyen 15 to 25 per cent in manufacturing, together with its large procurement appetite. Robust
technical and engineering capabilities backed by top-notch scientific and technical institutes are other
positive offerings on the table.

HISTORY of the industry:

 In 1911 first commercial flight was airmails from Allahabad to Nani (10 km) and in 1932 the
aviation department of Tata sons ltd was established.

 In 1938 Tata airlines was established and after 8 years in 1946 Tata Air Lines converted into a
public Company and renamed Air India Limited

 In 1948 Air India International was incorporated and in 1953 Nationalization of Aircraft Industry
was established.

 At that time Air India was serving the international sectors and Indian Airlines was serving
domestic sectors

 Other domestic airlines are Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation,
Kalinga Airlines, Indian National.

 In 1986 Private Sector Players permitted as Air taxi operators.These players including Jet, Air
Sahara, NEPC, East Theyst,

 In1990 Open sky policy was made came into existence.

 In 1995 Private Carriers permitted to operate scheduled services.

 2005 was the phase of competition and low-cost carriers was entered into the market.

 In 2007 Indian Airlines was merged into Air India.and Jet Airways acquired Air sahara.

 In 2008 Kingfisher was acquired 49% stake in Deccan Aviation. Regulatory Authorities

 Ministry of Civil Aviation was responsible for the formulation of policy, development and
regulation of Civil Aviation. Its functions also extend to overseeing airport facilities, air traffic
services and carriage of passengers and goods by air.

 Directorate General of Civil Aviation (DGCA) was promote safe and efficient Air Transportation
through regulation and proactive safety oversight system.

 Bureau of Civil Aviation Security (BCAS) was the regulatory authority for civil aviation security in
India

 Airport Authority of India (AAI) who accelerate the integrated development, expansion and
modernization of the operational, terminal and cargo facilities at the airports.
Market Size

During January-August 2016, domestic air passenger traffic rose 23.14 per cent to 64.47 million from
52.36 million during the same period in 2015. Passenger traffic during FY 2015- 16 increased at a rate of
21.3 per cent to 85.57 million from 70.54 million in the FY 2014-15. In July 2016, total aircraft
movements at all Indian airports stood at 168,400, which was 14.3 per cent higher than July 2015.
International aircraft movements increased by 8.2 per cent to 32,830 in July 2016 from 30,330 in July
2015. Domestic aircraft movements increased by 15.8 per cent to 135,570 in July 2016 from 117,050 in
July 2015. Indian domestic air traffic is expected to cross 100 million passengers by FY2017, compared to
81 million passengers in 2015, as per Centre for Asia Pacific Aviation (CAPA). India is among the five
fastest-growing aviation markets globally with 275 million new passengers. The airlines operating in
India are projected to record a collective operating profit of Rs 8,100 crore (US$ 1.29 billion) in fiscal
year 2016, according to Crisil Ltd.

Major Players In The Market

India is one of the fastest growing aviation markets in the world. It has caused high competition
to airline Industry. As by the DGCA Traffic data and No of Passengers carried by domestic
airlines during Jan-Aug 2015 There are 523.55 lakhs as against 433.24 lakhs during the
corresponding period of previous year thereby registering a growth of 20.84%. There are scads
of private airlines increased their presence in India by ordering new fleets and destinations. They
have amassed a list of the largest airlines in India, according to market share.

Indigo:

Indigo Airline is an Indian Low-cost airline company headquartered at Gurgaon, India. The
airline offers more than 633 daily flights connecting to 38 destinations including 5 international
destinations with its primary hub at Indira Gandhi International Airport, New Delhi. It presently
operates a fleet of 97 aircraft belonging to the Airbus A320 family. In 2014, Indigo carried 21.4
million passengers in the domestic sector.

Total Market Share: 38.5%

Fleet size: 97

Passenger Load factors: 76.8%

Cancellation Rate: 0.10%

Passenger Complaints in average: 0.7 % (No. of Complaints/10,000 Pax)

Jet Airways:

Jet Airways is a major Indian airline based in Mumbai. It is the second largest airline in India,
both in terms of market share and passengers carried, after IndiGo. It operates over 300 flights
daily to 74 destinations worldwide. Its main hub is Mumbai, with secondary hubs at Delhi,
Kolkata, Chennai, Bengaluru, Jet Airways serves 47 domestic destinations and 22 international
destinations, a total of 69 in 19 countries across Asia, Europe and North America.

Total Market Share: 19.8%

Fleet size: 116

Passenger Load factors: 80.8%

Cancellations: 0.96%

Passenger Complaints in average: 1.4 % (No. of Complaints/10,000 Pax)

Air India:

Air India is the flag carrier airline of India owned by Air India Limited (AIL), a Government of
India enterprise. It is the third largest airline in India (after Indigo and Jet Airways) in domestic
market share, and operates a fleet of Airbus and Boeing aircraft serving various domestic and
international airports. It is headquartered at the Indian Airlines House in New Delhi.

Total Market Share: 16.4%

Fleet Size: 108 (excluding subsidiaries)

Passenger Load factors: 79.3%

Cancellations: 1.20%

Passenger Complaints (average):1.7 % (No. of Complaints/10,000 Pax)

Spice Jet:

Spice Jet is an Indian low-cost airline headquartered in Gurgaon, India. It is the country’s fourth
largest airline by number of passenger carried with market share of 12.3% as of July 2015. The
airline operates more than 270 daily flights to 41 destinations, including 34 Indian and 7
international cities.
Total Market Share: 12.3%

Fleet size: 34

Passenger Load factors: 92.1%

Cancellations: 0.70%

Passenger Complaints (average):1.4% (No. of Complaints/10,000 Pax)

Go Air:

Go Air is an Indian Low cost carrier based in Mumbai. It commenced operations in November
2005. It is the aviation foray of the Wadia Group. As of January 2014, it is the fifth largest airline
in India by market share. It operates domestic passenger services to 22 cities with over 140 daily
flights and approximately 975 flights. Its hubs are at Chhatrapati Shivaji International Airport,
Mumbai.

Total Market Share: 8.2%

Fleet size: 19

Passenger Load factors: 75.6%

Cancellations: 0.44% ; Passenger Complaints (Average): 1.3 %(No. of Complaints/10,000 Pax)

INDUSTRY LIFE CYCLE:

Startup Stage

At the startup stage, customer demand is limited due to unfamiliarity with the new product’s
features and performance. Distribution channels are still underdeveloped, so there are very few
product supply and promotional activities. There is also a lack of complementary products that
add value to the customers, limiting the profitability of the new product.

Companies at the startup stage are likely to generate zero or very low revenue and experience
negative cash flows and profits due to a large amount of capital initially invested in technology,
equipment, and other fixed costs.

Growth Stage

As the product slowly attracts attention from a bigger market segment, the industry moves on to
the growth stage where profitability starts to rise. Improvement in product features leads to the
easiness of use, thus increasing value to customers. Complementary products also start to
become available in the market so people have greater benefits in purchasing the product and its
complements. As demand increases, product price goes down, which further increases customer
demand.
At the growth stage, revenue continues to rise and companies start generating positive cash flows
and profits as product revenue and costs break-even.

Shakeout Stage

Shakeout usually refers to the consolidation of an industry. Some businesses are naturally
eliminated because they are unable to grow along with the industry or are still generating
negative cash flows. Some companies merged with competitors or are acquired by those who
were able to obtain bigger market shares at the growth stage.

At the shakeout stage, growth of revenue, cash flows, and profit start slowing down as industry
approaches maturity.

Maturity Stage

At the maturity stage, the majority of the companies in the industry are well-established and the
industry reaches its saturation point. These companies collectively attempt to moderate the
intensity of industry competition to protect themselves and maintain profitability by adopting
strategies to deter the entry of new competitors into the industry. They also develop strategies to
become a dominant player and reduce rivalry.

At this stage, companies realize maximum revenue, profits, and cash flows because customer
demand is fairly high and consistent. Products become more common and popular among the
general public, and the prices are fairly reasonable compared to new products.

Decline Stage

The decline stage is the last stage of an industry life cycle. The intensity of competition in a
declining industry depends on several factors: speed of decline, the height of exit barriers, and
the level of fixed costs. To deal with decline, some companies might choose to focus on their
most profitable product lines or services in order to maximize profits and stay in the industry.
Some larger companies will attempt to acquire smaller or failing competitors to become the
dominant player. For those who are facing huge losses and do not believe there are opportunities
to survive, divestment will be their optimal choice.
 INDIGO

About Indigo:
IndiGo is India’s largest passenger airline with a market share of 40.3% as of December, 2016.
They primarily operate in India’s domestic air travel market as a low-cost carrier with focus on
our three pillars – offering low fares, being on-time and delivering a courteous and hassle-free
experience. IndiGo has become synonymous with being on-time. Since their inception in August
2006, they have grown from a carrier with one plane to a fleet of 126 aircraft today. A single
aircraft type, high operational reliability and an award winning service make us one of the most
reliable airlines in the world, currently operating flights connecting to 43 destinations – 37
domestic and 6 international.

Facts and Figures

8 consecutive years of profitable operations

Market share of 38.3% as of December, 2016

Fleet of 126 aircraft including 14 new generation A320neos

"Great Place to Work for in India” 8 years in a row

Results of Operations
Highlights

 Successfully completed its Initial Public Offering and got listed on domestic bourses,
namely, BSE Limited and the National Stock Exchange of India Limited; raised Rs.
30.17 billion.

 Declared 8th consecutive year of profitability with highest ever yearly profit.

 Got delivery of 3 new generation fuel efficient A320Neo.

 Added 3 new destinations, Dimapur, Udaipur and Dehradun, making it a total of 35
domestic destinations.
 Financials of the Company

The Board of Directors of the Company (“Board”) have pleasure in presenting their sixteenth
report on the business and operations of InterGlobe Aviation Limited (“the Company”, “Our
Company” or “we”) for the financial year ended March 31, 2019.
 V.R.I.O Analysis Framework

In order to understand the sources of competitive advantage firms are using many tools to
analyze their external (Porter’s 5 Forces, PEST analysis) and internal (Value Chain
analysis, BCG Matrix) environments. One of such tools that analyze firm’s internal resources is
VRIO analysis. The tool was originally developed by Barney, J. B. (1991) in his work ‘Firm
Resources and Sustained Competitive Advantage’, where the author identified four attributes that
firm’s resources must possess in order to become a source of sustained competitive
advantage. According to him, the resources must be valuable, rare, imperfectly imitable and non-
substitutable. His original framework was called VRIN. In 1995, in his later work ‘Looking
Inside for Competitive Advantage’ Barney has introduced VRIO framework, which was the
improvement of VRIN model. VRIO analysis stands for four questions that ask if a resource is:
valuable? rare? costly to imitate? And is a firm organized to capture the value of the resources?
A resource or capability that meets all four requirements can bring sustained competitive
advantage for the company.

Valuable:
The first question of the framework asks if a resource adds value by enabling a firm to exploit
opportunities or defend against threats. If the answer is yes, then a resource is considered
valuable. Resources are also valuable if they help organizations to increase the perceived
customer value.

Rare
Resources that can only be acquired by one or very few companies are considered rare. Rare and
valuable resources grant temporary competitive advantage. On the other hand, the situation when
more than few companies have the same resource or uses the capability in the similar way, leads
to competitive parity. 

Costly to Imitate
A resource is costly to imitate if other organizations that doesn’t have it can’t imitate, buy or
substitute it at a reasonable price. Imitation can occur in two ways: by directly imitating
(duplicating) the resource or providing the comparable product/service (substituting).

Organized to Capture Value

The resources itself do not confer any advantage for a company if it’s not organized to capture
the value from them. A firm must organize its management systems, processes, policies,
organizational structure and culture to be able to fully realize the potential of its valuable, rare
and costly to imitate resources and capabilities. Only then the companies can achieve sustained
competitive advantage.
Indigo’s V.R.I.O Analysis
 BCG MATRIX

BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray
firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis)
and speed of market growth (vertical axis) axis.
Growth-share matrix is a business tool, which uses relative market share and industry
growth rate factors to evaluate the potential of business brand portfolio and suggest further
investment strategies.

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic
position of the business brand portfolio and its potential. It classifies business portfolio into four
categories based on industry attractiveness (growth rate of that industry) and competitive
position (relative market share). These two dimensions reveal likely profitability of the business
portfolio in terms of cash needed to support that unit and cash generated by it. The general
purpose of the analysis is to help understand, which brands the firm should invest in and which
ones should be divested.

 Relative market share. One of the dimensions used to evaluate business portfolio is

relative market share. Higher corporate’s market share results in higher cash returns.
This is because a firm that produces more, benefits from higher economies of scale and
experience curve, which results in higher profits. Nonetheless, it is worth to note that
some firms may experience the same benefits with lower production outputs and lower
market share.

 Market growth rate. High market growth rate means higher earnings and sometimes
profits but it also consumes lots of cash, which is used as investment to stimulate further
growth. Therefore, business units that operate in rapid growth industries are cash users
and are worth investing in only when they are expected to grow or maintain market
share in the future.

There are four quadrants into which firms brands are classified:

 Dogs. Dogs hold low market share compared to competitors and operate in a slowly
growing market. In general, they are not worth investing in because they generate low or
negative cash returns. But this is not always the truth. Some dogs may be profitable for
long period of time, they may provide synergies for other brands or SBUs or simple act as
a defense to counter competitors moves. Therefore, it is always important to perform
deeper analysis of each brand or SBU to make sure they are not worth investing in or
have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation

 Cash cows. Cash cows are the most profitable brands and should be “milked” to provide
as much cash as possible. The cash gained from “cows” should be invested into stars to
 support their further growth. According to growth-share matrix, corporates should not
invest into cash cows to induce growth but only to support them so they can maintain
their current market share. Again, this is not always the truth. Cash cows are usually
large corporations or SBUs that are capable of innovating new products or processes,
which may become new stars. If there would be no support for cash cows, they would not
be capable of such innovations.
Strategic choices: Product development, diversification, divestiture, retrenchment

 Stars. Stars operate in high growth industries and maintain high market share. Stars are
both cash generators and cash users. They are the primary units in which the company
should invest its money, because stars are expected to become cash cows and generate
positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly
changing industries, where new innovative products can soon be outcompeted by new
technological advancements, so a star instead of becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration,
market development, product development

 Question marks. Question marks are the brands that require much closer
consideration. They hold low market share in fast growing markets consuming large
amount of cash and incurring losses. It has potential to gain market share and become a
star, which would later become cash cow. Question marks do not always succeed and
even after large amount of investments they struggle to gain market share and eventually
become dogs. Therefore, they require very close consideration to decide if they are worth
investing in or not.
Strategic choices: Market penetration, market development, product development,
divestiture.

Indigo BCG Analysis

Indigo is primarily a low cost carrier and its main business focus is to provide low fare flights to
its passengers. Hence, the ‘No-frill segment’ of the airline is the core of Indigo. Over the years
Indigo has worked constantly on improving its strategies and models to gain maximum share in
the market. Today, almost half of the market is captured by Indigo. Its market share as of March
2020 stands at 49.8%. Civil aviation sector in India is a rapidly growing industry and awaits a
great future ahead full of growth. Indigo, being the most successful airline in the country also
enjoys a high market growth. Hence, the No-frill portfolio of the airline is placed in the star
section of the matrix.

Whereas, the premium services provided by Indigo faces a more competitive rivalry with the
other full service airlines in the country, namely, Air India, Vistara, Spice jet etc. Hence, this
portfolio of the airline, though it enjoys a high market growth but the relative market share is
low which ultimately puts this product portfolio in the ‘Question Mark’ segment of the matrix.
 Air India

About Air India:

Air India, formerly Air-India, airline founded in 1932 (as Tata Airlines) that grew into an
international airline owned by the Indian government; it serves southern and east Asia,
the Middle East, Europe, Africa, the United States, and Canada. Headquarters are
in Bombay (Mumbai). The first scheduled service was inaugurated in 1932 by J.R.D. Tata, flying
mail and passengers between Karachi, Ahmadabad, Bombay, Bellary, and Madras. By 1939
routes had been extended to Trivandrum, Delhi, Colombo, Lahore, and intermediate points.
After World War II, in 1946, Tata Airlines was converted into a public company and renamed
Air-India Limited. Two years later, to inaugurate international services between Bombay
(Mumbai) and Cairo, Geneva, and London, Air-India International Limited was formed.
INDIAN OTT INDUSTRY

The OTT video market in India is gradually becoming a mainstream entertainment destination in
the midst of growing Internet users. With the rapid commoditization of data and the ongoing
price wars, online video streaming is a more feasible option today than ever before. This has led
to the influx of many global, local, and independent platforms in the past year that are hoping to
capitalize on this vast growth opportunity in the market. As operators optimize their operations
with advertising revenues, they are evolving content strategies and marketing effectively to reach
the masses. The focus has shifted from the urban youth to mass market, regional audiences
across multilingual backgrounds.

There is a disconnect between the total addressable market of Internet users and the served
market, as a majority of the population has access to erratic and slow broadband speeds. The
focus on Hindi and English programs has gradually shifted toward regional content, thus catering
to a larger audience. Monetization of platforms remains one of the biggest challenges for
operators, as they depend on advertising for their revenue. The inclusion of regional content has
paved the way for mass-market adoption as opposed to the initial niche offering. Live sports and
other marquee titles going online has reiterated the growth opportunity for OTT video, attracting
global Internet companies to invest and enter this lucrative market.

The OTT industry in India is open for competition right now. Many local players have
established their audience, while major platforms from the US are trying to replicate the same
supremacy in India that they hold in other Western countries. This also comes at a time when
every company in the field is realizing the value of content to reach customers.

The stock of quality content has never been higher. From investors to industry titans and VCs,
everyone is looking for a way to become a part of the content business. Job roles such as ad
executives and marketing consultants are getting replaced by copywriters and content strategists.
Advertising has become little more than a cog in the content vehicle driving the marketing
message of a campaign home.

The Indian OTT space is populated by many players. In 2018, the OTT industry was valued at
Rs. 21.5B. In 2019, its value is slated to reach Rs. 35B. It is showing signs of growth typical of a
young industry about to explode onto the scene. The competition between the different platforms
has also been great for consumers who have gotten the chance to watch a variety of content at a
cheaper price.

Artists have also been a beneficiary of this trend. While only TV and movies were the two
mediums artists could enter, digital content has opened opportunities in places previously
unseen.

A welcome change from all sides, the next stage of the OTT revolution is a battle to gain
supremacy over the Indian market.

NETFLIX

Netflix is a leading streaming video on demand (SVOD) company operating in 190 countries
with 130 million subscribers . The product and revenue model in video streaming industry is
very tangible and direct. Users watch TV shows, movies (on-demand) or any video content on
variety of devices e.g. Tablets, Laptops, Smart phones. Netflix, being one of the early pioneers in
this industry has a managed to make a firm user base and as well as a business model that
generates a substantial revenue for the firm.

The biggest streaming platform in the world, Netflix has struggled to capture the attention of the
Indian audience. Some have questioned its Rs. 500/month subscription prices, which compared
to other Indian platforms is too much. It has cut down on the price recently, but the perception of
being expensive has hurt Netflix in India.

As of June 2019, Netflix had 11M monthly active users. It also has a much higher feedback score
compared to platforms like Hotstar and ZEE5, suggesting Netflix has been successful to strike a
chord with its content.

The road to capturing the Indian market is still long. With the competition Netflix is facing in the
US from the arrival of Disney+, dominating a growing market like India makes all the more
important.

After receiving $2B in funding to create original content, Netflix is slated to splash some of it in
India. Despite any preconception, Netflix knows it can win the viewers of India with quality
content.
The video streaming industry is growing and is expected to grow at approximately USD 82
Billion by 2023, at 17% of compound annual growth rate (CAGR) between 2017 and 2023[15].
As the prospect of the growth is higher and some of the big market (like Asia-Pacific) remains
relatively unexplored so, the video streaming space is increasingly becoming a competitive
industry. Companies like Amazon (Amazon Prime/Fire TV), Hulu, HBO, Google (YouTube
Premium) have entered the market or adapted their existing infrastructure to enter the market.
And other companies e.g. Apple, Disney are planning to enter the market. The barrier to entry in
streaming space is low. There is no “entry blocking” patented technology or any regulation that
hinders the entrance of new player. Environment analysis of SVOD industry in presented in
Exhibit 1.

With no differentiation in the distribution of the content, subscription (annual or monthly) and
business model, the video streaming industry is rapidly converging towards becoming an
entertainment or media industry or a content generation industry. Users do not incur any
switching cost and can quickly change the provider. In such scenarios, the content is and will be
the sole differentiator in SVOD space. There two ways the companies get the content, they
license it already produced content (popular movies, series etc.) from the studio or they make
their own series and movies. With the licensed product, the content remains with the company
only for a fixed time.

So, there are limited popular content with no exclusivity. Besides, there are contractual
obligation (like only for certain region, countries) that company must adhere, and this hinders the
same user access and experience across the platform. The content provider companies like
Disney themselves are entering into SVOD space and will pull out their content from other
SVOD providers [16]. This is the reason that Netflix and other competitors are making their own
shows and movies. The company needs a quality content to entice the user to them. And, this
demand and creation of “original” content is expansive and there is no guarantee that every new
shows and movies will be received the user favorably. Even if the new content is popular, there
is only fixed shelf life for the content. Most content remain popular only during first 6–12
months. Then, there is piracy, one of the biggest threats to SVOD.
Challenges for Netflix in Indian Market:

The largest OTT video streaming player in the world has not yet dominated the market here in
India. Netflix, although not very popular, has built a niche audience for itself. Below mentioned
are some of the major key points which comes in as a challenge for Netflix India.

Dominance of Cable:

In India cable costs average around INR 250 (about $5) per month. In it you get most of the
channels. Now majority of Indians watch local language movies, which end up in these channels
within about 2 month from release in theaters to cut down on piracy.

In rural areas also where cable coverage is not there the DTH platform is dominant, using DTH
also these customers can watch newly released movies for a small amount (Around $2-$3).

Internet speeds & FUP:

Netflix’s popularity in the US has been based on ever increasing internet speeds in terms of both
wireless and wired broadband. At least one third of Americans are on a cellular carrier that
provides them with unlimited data plans. These carriers are Sprint and T-Mobile which provide
unlimited data without any speed restriction unless users cross a 22-25GB threshold and happen
to be latched on to a congested cell site.
The situation in India is beyond comparison. A large part of the country has BSNL, Airtel and
MTNL providing them wired broadband. Both BSNL and Airtel have post-FUP speeds of 512
kbps at which even a 320p video doesn’t buffer properly. Also, data caps by Indian broadband
providers are much less generous. Anyone who streams Netflix in HD quality would consume as
much as 3GB of data per hour. Assuming someone watches Netflix in HD quality for an hour
everyday, then this translates to at least 80-90GB in data consumption every month and a
minimum of 8 Mbps would be required to stream HD quality videos without any hiccups. This
means, to enjoy Netflix properly, one needs an 8 Mbps connection with a data cap of at least
100GB.

Free Access of Content by local competitors:

Zee, parent of the country’s largest private broadcast network, offers movies, exclusive TV
content and more than 90 live channels on its ZEE5 platform with content across 12 languages
for as little as 70 cents a month. Partial access to the platform is free to subscribers of mobile
phone carrier Bharti Airtel, controlled by billionaire Sunil Mittal. Users of Airtel’s plans priced at
$7.25-a-month or more get full access to ZEE5 free.

Ambani’s Reliance Jio Infocomm Ltd., which elbowed its way into the country’s mobile phone
business three years ago with free calling and low-priced data services, has jumped into film and
TV streaming, including a tie-up with Balaji Telefilms. Sunil Lulla, chief executive officer of Balaji
Telefilms, said the company’s service ALTBalaji is focused on producing exclusive content in
Hindi, the country’s most-used language.

Competition from DTH/Integration:

DTH is very popular in India and has been very innovative for the past couple of years as
compared to the MSOs. TataSky for example has its own VoD platform where one can watch
several movies and TV shows, on demand. Similarly, TataSky has its own mobile app whereby
paying a fixed fee one can access all the content catalog on their mobile screens.

DTH providers have definitely raised the bar for any on-demand streaming service to compete
with them. It’s definitely not the same old cable days when MSOs would hardly innovate.

Almost all major companies have some kind of integration advantage for their streaming apps.
HotStar for example can tap into the vast amount of content that’s held by their parent company,
the Star Networks. Same goes for Eros Now. A telecom company like Airtel owns the
infrastructure and has launched Airtel Xstream, a video streaming app that doesn’t count against
a user’s data cap for a fixed fee just like Wynk Music Plus and Wynk Movies. Netflix has neither
of these integration advantages (as of now).

Torrent Downloads:

India has a price-sensitive audience. “Pricing is going to be the biggest challenge," said Hanish
Bhatia, senior analyst at Counterpoint. “Indian users have not accepted the idea of paying for
content yet. Two to three years back, everybody relied on torrent," the free protocol that lets users
share and download films and TV shows without paying for them. For a market like India, Netflix
needs to update its catalogue. Even if broadband and torrent related problems are solved, for
Netflix to be truly profitable, they need to invest in original programming in India as well.
However with around 15+ major languages being spoken, investing in original programming
takes a whole new meaning.

__________________________________________________________________
______________

Porter’s Five Forces Model

THREAT OF NEW ENTRANTS

For established organisations in the entertainment industry, the barriers to entry are fairly low,
as they will be able to immediately launch the service with their own content and can already
have a fan base for the organisation as a whole or for a specific series.

The threat of new entrants is a very real and serious issue for Netflix with an increasing number
of organisations deciding to launch similar services with their own content. The size of these
organisations also means initial costs for technology and marketing would not be an issue. While
many customers will have multiple subscriptions, there will no doubt come a time where
subscribing to so many services is no longer viable so they may decide to close their accounts.

In conclusion, the threat of new entrants is high for Netflix and must be monitored carefully.
POWER OF SUPPLIERS

Traditionally, cinemas want an exclusivity window of up to 90 days before moving onto on

demand streaming services. Netflix, however, has been fighting back against the major cinema
chains by demanding a window of 45 days at most.

As more companies - Comcast, Apple, Disney - unveil their own streaming services, they're trying
to make them more appealing with exclusive shows and deep libraries. Entertainment companies
are pulling some of their stuff from Netflix to stock their own services.For example, the forever
popular 90's sitcom Friends will be removed from Netflix in 2020 and instead move to HBO's
very own streaming service. This is unlikely to be the only big-name Netflix will lose, therefore
increasing the risk of power of suppliers.

While the Martin Scorsese deal is a clear indication of the power shift from cinemas to the
producers, Netflix will be wary of the number of acquired properties they will be losing. That
being said, Netflix is in its own right an accomplished and trusted producer of content now;
therefore the power of alternative suppliers can be considered a slight high from moderate threat.

POWER OF BUYERS :

The power of viewers will continue to rise because of the increasing number of streaming services
being launched. When we talk about Indian market in particular, the price sensitive audience is
likely to shift to other streaming services which provides same or better content in a relatively
lower cost.

Viewers are not tied into contracts, so many viewers are paying on a monthly basis with the
option to cancel subscriptions at any time, thereby putting even more power into the hands of the
consumer. The power of buyers cannot be underestimated here, with viewers now having the
choice to watch whatever they want if they cannot find something they desire on Netflix they can
simply look on a competitors site for something else. Also, as stated previously with content
moving to other suppliers, it is only natural for viewers to therefore follow the content to other
platforms.

Therefore the power of buyers will always be high because of how easy it is for viewers to join and
cancel subscriptions.

THREAT OF SUBSTITUTES:

The rise of OTT and VOD industry in India is followed by the fall of traditional broadcast
television. Gone are the days when the whole family used to sit together and watch a show or
movie together. We live in the age of privacy, where the consumers or audience of the video
content prefer to watch it in private and are switching over to paid video services which are
tweaked and targeted to their personal interest rather than worrying about sharing a common
interest with their co viewers. It would take a long time for a replacement product of video
streaming to hit the market. Hence, It would be safe to assume that the OTT streaming service
companies are threat free when substitutes are considered (as of now).

Rivalry Among Existing Competitors:

Competitive rivalry is extremely high is for Netflix. While competitors such as Amazon Prime
Videos can offer additional services for customers' subscription fees, others are removing the
most popular video content from Netflix to show on their own platforms.

This competition does take toll on the overall long term profitability of the organization.
 VALUE CHAIN ANALYSIS

Porter’s Value Chain Analysis of Netflix

Porter's value chain model is highly popular in the business world. However, Netflix must not
take it as a rigid, standalone framework by assigning the equal importance to all activities. The
effective Value Chain Analysis requires Netflix to realise that all activities or functions do not
require same scrutiny level. Hence, the first step of adapting the Porter Value Chain framework is
to identify the importance of activities according to their role in product/service delivery process.
Here is the list of primary value chain activities as proposed by Porter:
1. Primary Activities

The primary value chain activities of Netflix are directly involved in producing and selling the
product to targeted customers. Analysis of primary value chain activities can improve the
performance of Netflix as explained below.

1.1 Inbound Logistics

It is important to develop strong relationships with suppliers as their support is necessary to
receive, store and distribute the product. Without analysing the in-bound logistics, Netflix can
face various challenges in product development phases. Analysis of in-bound logistics requires a
company to focus on every aspect of transformation from raw material to finished product. Some
examples of inbound logistics are retrieving raw material, storing the inputs and internally
distributing the raw material and components to start production.

1.2 Operations
The importance of analysing operational activities raises when raw material arrives, and Netflix is
ready to process the raw material into the end product and launch it in the market. Some
examples of operational activities are machining, packing, assembling and testing. Equipment
repair and maintenance also falls into this category.
It includes both- manufacturing and service operations. Analysis of operational activities is
important for improving productivity, maximising the efficiency and ensuring the competitive
success of Netflix. The increased productivity can help Netflix to achieve consistent economic
growth, increase profitability and set a powerful basis for competitive advantage.

1.3 Outbound Logistics

Outbound logistics include the activities that deliver the product to the customer by passing
through different intermediaries. Some outbound logistics activities are material handling,
warehousing, scheduling, order processing, transporting and delivering to the destination. Netflix
can analyse and optimise the outbound logistics to explore competitive advantage sources and
achieve its business growth objectives.
Because, when outbound activities are timely managed with optimal costs and product delivery
processes put a minimum negative effect on the quality, it maximises the customer satisfaction
and increases growth opportunities for the firm. Netflix should pay specific importance to its
outbound value chain activities when its offered products are perishable and require quick
delivery to the end customer.

1.4 Marketing and Sales

At this stage, Netflix will highlight the benefits and differentiation points of offered products to
persuade the customers that its offering is better than competitors. Only producing a high quality
product at affordable costs and distinctive features cannot create value until Netflix invests on the
marketing and sales activities. The sales agents and marketers play an important role here.
Some examples of Netflix's marketing and sales activities are- sales force, advertising,
promotional activities, pricing, channel selection, quoting and building relations with channel
members. The company can use the marketing funnel approach to structure its marketing and
sales activities. The marketing strategies can either be push or pull in nature, depending on the
Netflix’s business objectives, brand image, competitive dynamics and current standing in the
market.
Effective and wisely integrated marketing activities can develop the brand equity of Netflix and
help it stand out from the competition. However, Netflix must avoid making false commitments
about product features that cannot be fulfilled by the production department. It indicates the
need to ensure coordination between different value chain activities.

1.5 Services
The pre-sale and post-sale services offered by the Netflix will play an important role in
developing customer loyalty. The modern customers consider post-sale services as important as
marketing and promotional activities. The power of negative e-WOM due to poor support service
cannot be undermined in the current technologically advanced era. The company must analyse
its support activities to avoid damaging brand reputation, and instead use it as a tool to spread
positive word of mouth due to quick, timely and efficient support services.

2.Secondary Activities

The support activities play an important role in coordinating and facilitating the primary value
chain activities. Netflix can also benefit from analysis of its support activities as explained below.

2.1 Firm infrastructure

The firm infrastructure denotes a range of activities, such as- quality management, legal matters
handling, accounting, financing, planning and strategic management. Effective infrastructure
management can allow Netflix to optimise the value of the whole value chain. Netflix can control
the infrastructure activities (or commonly called overhead costs) to strengthen the competitive
positioning in the market.

2.2 Human resource management

Netflix can analyse human resource management by evaluating different HR aspects, including-
recruiting, selecting, training, rewarding, performance management and other personnel
management activities. The effective HR management can allow Netflix to reduce competitive
pressure based on motivation, commitment and skills of its workforce. The company can also
achieve its cost minimisation objectives by analysing hiring and training costs with their relative
return. The heavy dependence of Netflix on employees' talent will increase the importance of this
value chain support activity.

2.3 Technology development

In a modern, technological advanced era, almost all value chain activities depend on
technological support. The technological integration in production, distribution, marketing and
human resource activities requires Netflix to realise the importance of technology development.
It can be divided into product and process technological development activities. Some examples
are- automation software, technology-supported customer service, product design research and
data analytics. The research and development department of Netflix is classified in this category.

2.4 Procurement
The procurement in value chain denotes the processes involved in purchasing the inputs that
may range from equipment, machinery, raw material, supplies, raw material and other items
necessary for producing the finished product. Due to its linkage with multiple value chain
activities, Netflix should carefully consider its procurement activities to optimise the inbound,
operational and outbound value chain.
As mentioned above, the application of Porter Value Chain model depends on understanding the
importance of all activities. After understanding the relative importance of identified value chain
activities, Netflix should highlight areas where value can be added, cost efficiency can be
achieved, differentiation basis can be set, or processes can be optimised.

FINANCIALS OF THE COMPANY

Income Statement of Netflix INC.

Ctd..
Source: www.investing.com

SWOT ANALYSIS
Netflix Inc.’s growth and success are attributable to business strengths and competitive
advantages that enable global expansion and market dominance. The net competitive advantages
are among the net outcomes of the company’s SWOT factors. In the SWOT analysis framework,
the strengths, weaknesses, opportunities, and threats are a reflection of the movie streaming
organization’s internal situation (internal analysis) and external environment (external analysis).

The strategic management issues described in this SWOT analysis indicate that Netflix Inc. needs
to continue growing while developing capabilities to protect the business against competition and
other threats in the media and entertainment industry. While the online entertainment
corporation keeps improving its finances, this SWOT analysis enumerates internal strategic
factors and external strategic factors that challenge long-term business growth.

STRENGTHS:

 High Brand Equity: One of Netflix Inc.’s major strengths is its high brand equity,
which is the business benefit and value associated with the company’s brand, relative to
competitors. In this SWOT analysis case, the brand enables the movie streaming company
to maintain its popularity and ability to penetrate its current markets.

 Large Platform for Content producers and consumers:  Its large platform of
content producers and consumers is a strength that allows Netflix to maximize its
operational effectiveness, service attractiveness, and business growth. For example, as the
platform’s entertainment content creators increase, the service attracts a larger
population of consumers, which in turn attract more producers. This kind of business
strength is also seen in other platform-type businesses, such as Spotify Technology and its
on-demand music streaming operations. 

 Capacity for Original Content Creation: Another of Netflix’s strengths is its capacity
for original content creation. This means that the company earns from its original movies
and shows, in addition to earnings from streaming operations. The strengths assessed in
this SWOT analysis are among the core competencies identifiable through a VRIO/VRIN
analysis and value chain analysis of Netflix Inc. The company’s value proposition is
achieved by using these strengths in the online streaming value chain. 

WEAKNESSES:
  Imitable Business Model: Netflix Inc. has an imitable business model, which is an
internal strategic factor that weakens the business. For example, competitors can copy the
same business model to create a platform for on-demand online media streaming.

 Dependence on content producers: This is another weakness examined in this

SWOT analysis of Netflix Inc. This internal factor makes the company vulnerable to the
effects of producers’ strategies.

 Dependence on ISP Providers: Moreover, the business depends on Internet service

providers (ISPs) that determine customers’ connectivity speed, which is a critical factor
influencing customer satisfaction in Netflix’s service. With these internal strategic factors,
this SWOT analysis reflects the strategic challenge of making the company less
vulnerable, given these weaknesses.

OPPORTUNITIES:

 Growth through expansion of Product Mix: Netflix’s opportunities include growth

through product mix expansion. For example, the company can develop new types of
entertainment content that can be accessed through its website or mobile apps.
Considering the other factors in this SWOT analysis, such an external strategic factor is
directly related to Netflix Inc.’s generic strategy for competitive advantage, intensive
strategies for growth, and business model.
  Penetration in new markets: Penetration of new markets is another opportunity in this
SWOT analysis, especially because of the on-demand streaming company’s lack of
significant presence in countries like China. Netflix’s marketing mix or 4P affects how
such market penetration is achieved. 

 Business Diversification into other industries and market:  Furthermore, the online
business has the opportunity to diversity, such as by acquiring a complementary firm that
could improve overall strategic positioning and success. In the SWOT analysis framework,
this external factor is based on market conditions as well as organizational capacity to
diversify, thereby requiring Netflix’s corporate structures adequacy and support.

THREATS:

 Competition: Competitors and related business imitation are a strong threat, as can be
determined through a Porter’s Five Forces analysis of Netflix Inc. Competition is an
external strategic factor that, in this SWOT analysis, is an obstacle toward maximizing the
company’s revenues and profitability in the online streaming industry. 

 Content Piracy: Piracy threatens Netflix by allowing customers to consume pirated

content instead of the ones available through the company’s service. In the SWOT
analysis model, this external factor intensifies competition for customers’ viewing time.

 Cybercrime: Considering the resource-based view, cybercrime is a threat based on the

information technologies that Netflix uses. Proprietary and sensitive customer
information may be compromised as a result of this external strategic factor in the online
streaming industry environment. This SWOT framework application highlights
cybercrime, which is a technological trend that shapes the industry, as can be assessed
through a PESTEL analysis of Netflix Inc.

__________________________________________________________________
_______________
 PESTEL ANALYSIS

PESTLE analysis is one the significant and widely used tool or framework mostly by
organizationswith the intent of considering the market environment before commencing the
process of marketing. In fact, the analysis of the environment needs to feed all planning aspects
as well as it should be continuous. The internal environment of an organization includes internal
customers or staff, wages, office technology and finance etc. whereas the micro environment
includesthe external customers of an organization, distributors or agents, competitors and
suppliers. Additionally, the macro environment includes legal and political factors, sociocultural
forces, economic forces and technological factors.

Netflix is the leading streaming services provider with a global presence. It serves more than 169
million subscribers from 190 countries around the world as of 2019. In recent years the brand has
seen very fast growth driven mainly by increased use of smartphones and the proliferation of 4G.
The high popularity of Netflix is due to several factors including customer experience, a large
collection of original content as well as an effective marketing strategy. Following the spread of
coronavirus, as more and more people around the world are staying indoors, the demand for its
services has grown fast abruptly. 

As the consumption of digital services grows worldwide driven by increased use of the internet
and mobile devices, Netflix continues to enjoy growth in popularity and sales. 

This is a pestel analysis that analyzes how these forces affect the business of Netflix worldwide.
Political :
The political factors may involves environment regulations, employment laws, tariffs, tax policy,
trade restrictions, political stability and reforms. It is noteworthy, that the charities needs to be
included where a government are not willing services and goods to be provided.Political forces
continue to grow in relevance for tech companies worldwide. While Netflix is mainly a streaming
services company, it is also a tech company and therefore also subject to government scrutiny like
the other tech firms.  Governments around the world have tightened their grip on the technology
companies with regard to their data collection and other practices.
Depending upon the level of regulation in each market, Netflix has to tailor its services
accordingly for each region. Another area where the government’s role is highlighted in the
context of international tech businesses like Netflix is taxation. In many countries inside the EU,
the governments are actively considering new tax laws for such companies which could
significantly grow the tax liability of Netflix.

Economic :
Economic factors also play a direct role in the context of international business. Higher economic
activity and employment level lead to higher spending on leisure activities and entertainment,
For the past several years, the performance of the global economy has remained impressive
which has resulted in people around the world spending more on services like Netflix. However,
trends have slightly changed since the spread of the coronavirus and while the economic activity
around the world has gone down, Netflix has experienced a significant rise in its memberships.
Economic activity is expected to start rising again once stay at home rules are relaxed in the
United States and other regions of the world. In some areas including China where the situation
has been brought a lot under control, economic activity has started rising. Low economic activity
for prolonged periods can have an adverse effect on the business of Netflix since people will try to
save more if lockdown extends. Moreover, unemployment has risen heavily and if the situation
persists soon people will start cutting down on all unnecessary costs.

Sociocultural:
Sociocultural factors are also playing an increasingly important role in the context of
international business and considering their importance businesses are making them a part of
their operational and marketing strategy. Netflix is catering to a global audience and as such, it
becomes essential for the company to pay attention to the varying tastes and preferences of
people from different societies and cultures. This is why Netflix has brought content that spans
several genres and languages. It offers a wide range of content suited for audiences of various
ages and from different regions. However, this has helped the company attract a diverse set of
customers from worldwide since people can find a nice collection of movies and shows in their
native languages on Netflix. The demographic composition of the global population has changed
a lot during recent years. The millennials are the main target of Netflix and the brand has tailored
its products to cater mainly to the taste of the modern generation. This generation is highly tech-
savvy and consumes most of its entertainment online.

Technological :
Technological factors have been driving a lot of growth and competition in the business industry.
As in the case of Netflix, technology is at the core of its business model. Inside those Netflix
offices, there is a lot of technology-related stuff going on all the time. One of the most important
reasons behind the fast surge in its popularity during the last several years is its focus on
customer experience. The company has continued to improve its user interface to provide the
subscribers best-in-class experience. Technology is the main source of competitive advantage for
Netflix. The company uses various algorithms and machine learning to recommend the shows
and movies worth watching to individual subscribers. This is how the streaming brand has
created an exclusive and unique experience for its subscribers. However, technology is not just a
source of competitive advantage but it is also driving higher competition in the industry. Netflix
competes with several businesses including gaming, social media, and other online streaming
services Due to the intense competition in the industry, it is important for Netflix to continuously
improve its technology and overall services to overcome the competitive pressure. The company
invests a large sum each year in research and development to drive higher user engagement and
grow its popularity.

Enviornmental :
Environmental factors are of relevance in the context of nearly every large business which is
because how businesses impact the environment has a direct impact on their social reputation
and brand image. Every large brand invests in the environment including Netflix. Since Netflix is
a company whose entire business is operated online such businesses do not have a direct and
heavy environmental impact. Despite that all business processes related to a large and global
business cannot be run without consuming resources. It is why Netflix aspires to understand its
environmental impact and minimize it as much as possible. While its dependence on the
environment for raw material is very low still the brand consumes electricity heavily in its
operations. In 2019, the company used around 94,000 megawatt hours of energy directly. A part
of the energy that the company consumes in its business operations including its offices and
studios as well as the telecommunications facilities that are a part of its content delivery network
comes from non-renewable sources and so in order to minimize its environmental impact the
company matches that portion with regional renewable energy certificates.
Legal :
Legal factors will continue to play a major role in the context of the technology and digital
entertainment industry since the laws in this area are still evolving and governments around the
world are working on developing a strong legal framework to regulate the technology industry. A
large number of tech players in the world including tech leaders like Apple, Google, Amazon, and
Facebook have faced a large number of cases against them related to anticompetitive behavior
and user privacy. Several of them including Google and Facebook have paid large fines. In the
case of Netflix, user privacy is one of the most important concerns apart from the protection of
user data. Legal compliance is now more essential than ever for the technology firms since
noncompliance can result in hefty fines and also cause severe damage to a brand’s reputation.

AMAZON PRIME VIDEO

Prime Video, also marketed as Amazon Prime Video, is an American Internet video
on demand service that is developed, owned, and operated by Amazon. It
offers television shows and films for rent or purchase and Prime Video, a selection
of Amazon Studios original content and licensed acquisitions included in the
Amazon's Prime subscription. In the UK, US, Germany, and many other territories,
access to Prime Video is also available through a video-only membership, which does
not require a full Prime subscription. In France and Italy, and other countries
like Australia, Canada, India, etc. Prime Video content is only accessible through a
dedicated Prime Video website. In some countries Prime Video additionally
offers Amazon Channels, which allows viewers to subscribe to other suppliers' content,
including HBO in the United States.

But unlike Netflix, which is a pure video streaming platform, Amazon Prime is a bundled
service. Apart from Prime Video, users also get host of other benefits like free two-day
shipping on Amazon India website, early access to Amazon sales and deals, and many
more. 
Penetration in the Indian Market:

Jamil Ghani, vice-president of Prime and Marketing International at Amazon.com, is very

familiar with India, given that he is responsible for the Prime membership programs offered to
customers in Europe and Asia and defining the launch of Prime in new countries. Ghani
perceives this country as one of the most dynamic market segments around the world, and
attributes this to the huge amount of India-first innovation in the payments space, in content and
consumer experience.

In addition to striking a slew of movie acquisition deals with major Bollywood production houses,
the streaming giant has so far launched around half a dozen original series across three Indian
languages and has a further 30 in development. Its partners on these shows include top
Mumbai-based producers such as Excel Media & Entertainment, Abundantia Entertainment and
Pritish Nandy Communications (PNC).

Sitting in Amazon’s shiny new offices in the Bandra Kurla Complex – a business district that is
fast becoming the Silicon Valley of Mumbai – Gaurav Gandhi, director and country head of
Amazon Prime Video, India, outlines what he describes as the four tailwinds that encouraged
Amazon to zoom in on India – devices, data, demographics and the abundance and popularity
of local-language content.

“This is largely an Android market, which means that you now have devices at all levels and
price points, and given that India mostly has single TV homes – around 95% only have one
television – the phone has become a TV screen for an additional four to five members of the
family,” explains Gandhi, who joined Amazon last year after heading the streaming service of
local media conglomerate Viacom 18.

“Couple that with the fact that you now have much cheaper data, which was not the case a few
years ago, and everyone can stream without worrying about what will show up on their bill.”

Content is one area in which the landscape in India looks completely different from other
international markets. The country has several big media conglomerates with large libraries of
content, most of which they own outright, as India has never had much of a pay-TV or premium
cable market. As a result, India’s ‘old media’ broadcasters have all been able to roll out
streaming services very quickly – most of which are ad-supported – which means Indian
consumers have online access to a vast amount of content mostly for free.

Starting out with several comedy specials (Prime Video is now regarded as the home of stand-
up comedy in India), Amazon then moved into producing drama series – each with a format of
eight-10 episodes and touching on subjects not usually seen on mainstream TV. The first batch
has included Inside Edge, revolving around the scandal and politics behind premier league
cricket; psychological thriller Breathe; gangster drama Mirzapur, set in the badlands of small-
town India; and most recently, Four More Shots Please, about a group of liberated young
women in modern-day Mumbai.

While online shopping has been slow to take off in India, due to issues surrounding digital
payments and logistics, video streaming in this content-mad country is the perfect way to build
brand loyalty until the ecommerce infrastructure is in place.

PORTERS FIVE FORCE ANALYSIS

 Threats of New Entrants: New entrants in the OTT platforms brings

innovation, new ways of doing things and put pressure on Prime Videos through lower
pricing strategy, reducing  costs, and providing new value propositions to the customers.
It is the existing players who need to manage all these challenges and build effective
barriers to safeguard its competitive edge.

 Bargaining Power of Suppliers: All most all the companies in the CATV
Systems industry buy their raw material from numerous suppliers. Suppliers in dominant
position can decrease the margins these companies can earn in the market. Powerful
suppliers in Services sector use their negotiating power to extract higher prices from the
firms in CATV Systems field. The overall impact of higher supplier bargaining power is
that it lowers the overall profitability of Streaming Services.

 Bargaining Power of Buyers: Buyers are often a demanding lot. They want
to buy the best offerings available by paying the minimum price as possible. This put
pressure on streaming channels’ profitability in the long run. The smaller and more
powerful the customer base, the higher the bargaining power of the customers and
higher their ability to seek increasing discounts and offers.
 Threat of Substitutes: It would be safe to assume that the OTT streaming
service companies are threat free when substitutes are considered, as of now. But, since
the industry is fresh and growing at a high rate, the industry need to be proactively
aware of the entry of substitute products.

 Rivalry among existing competitors: If the rivalry among the existing

players in an industry is intense then it will drive down prices and decrease the overall
profitability of the industry. Prime Video operates in a highly competitive market among
competitors with considerable market share, Netflix, Hulu, Hotstar Disney, Sony Liv, just
to name a few . This competition does take toll on the overall long term profitability of the
organization.
Objectives of the Survey :

 For each industry, three different survey forms were rolled out to solicit the
customer response. Two of them were forms targeting the particular brand
chosen and the last survey form was to carry out a competitive study among the
two.
 The primary objective was to gain consumer perception of the brand and its
industry regarding various aspects of the business.
 Since I have chosen service industries in both the cases, the prime focus was on
the brands’ success in terms of customer satisfaction.
 The other questions included were in alignment with the project structure, i.e,
customer perspective of the following:
 Advertisement Strategies and their digital presence.

 Change in company’s offerings as a result of pandemic and business

disruptions.
 The comparative study between the brands of similar industry to obtain

and reflect the competitive aspect of the brands .

 VISUALISATION OF THE SURVEY DATA

The below mentioned visualisations are from the comparative study survey conducted
of Netflix and Amazon Prime Video. The primary data reflects the preferences of very
the users of both the streaming platforms.

Note: Since this is a summary report, only the comparitive chart is published.

The survey was conducted on a much broader scale with each of the streaming
platform having a unique set of questions forming the questionnaire.
Avove mentioned graphs are from the survey form of Netflix .

---------------------------------------------------------------------------------------------------------------------

Now, let us take a look at the responses from the comparative study graph.
Hence, on a conclusive note we can state that Netflix has attracted higher percent of
favourable reviews as compared to Amazon Prime Video.

Netflix, although being the global OTT leader, is yet to gain a substantial share in the
Indian market. But, with the change in consumption pattern of Indian viewers, it seems
very much possible that Netflix will become the Indian OTT leader as well.
ADVERTISING STRATEGIES (OTT)

Out of the major changes and developments in the strategies of the OTT video streaming

platforms, Advertisement strategies is a big name in it. Coronavirus induced lockdown has

definetly had an impact on the traditional way of advertisement of new releases on these

OTT platforms.

India’s OTT industry, which was among the largest spenders on print and outdoor, has

scaled down its marketing activities on these two mediums and is focusing more on gaining

digital presence to reach out to audiences and acquire new subscribers. 

The likes of MX Player, Netflix, Amazon Prime, Hotstar, Zee5, AltBalaji, Voot among others

used to advertise a lot in print and outdoor at the time of launch of their new shows. But

with the distribution of newspapers taking a hit and the public being inside because of the

lockdown, OTT platforms have moved to a more cost-effective way of reaching out.  

According to experts, marketing in such times is about reaching out to maximum people

with the avenues available. As a result, most OTT platforms have started communicating

through digital in a big way.

According to Abhishek Joshi, Head of Marketing and Business Partnerships at

MX Player, the challenge is to explore avenues where the consumer is available

and that is digital.

“At a fundamental level, marketing is the process of understanding your customers and

building relationships with them. So, all that has changed in today’s scenario is reaching

out to them where they are available, which is indoors, with their window to the world

being news, social platforms, music, entertainment, streaming VOD, mobile games and TV

to a certain extent . As opposed to a normal situation, the challenge now is to explore more

avenues to reach the consumer to where he is and that’s a digital outreach strategy.

Basically, a lot more digital is being added to the traditional media mix,” he said.

Netflix

National Advertising Strategy :

Social Media Marketing:

Netflix has been at the helm of its game in India. The OTT platform has been regularly
releasing Original series one after another in order to keep the Indian audiences hooked.

The brand is leaving no stone unturned in communicating with the audiences. Over last few
months, it has been effectively using Twitter as a medium to establish its quirky
positioning.

In the latest development, the OTT platform launched a series of tweets where it compared
several popular Bollywood actors to food items. It drew a rhyming from their names to
popular food dishes. Some of the popular Bollywood actors in the series of tweets
included Purab Kohli, Shah Rukh Khan, Kubra Sait, Vicky Kausal, Rajkumar Rao.

As a result, people started sharing the names of their favorite film and television stars and
drew parallels between their names and food items. The tweets continued for a while and
fans enjoyed the engagement.

The platform is directly trying to communicate with its audiences to engage with them. It is
urging them to respond on such quirky tweets to keep the conversation going on.

Some of the tweets are like ‘Tell Netflix what song is on your mind’, ‘What are you watching
when you friends ditch you’ and others like this.

Interestingly, the tweets are not just broadcast of developments on the Netflix India but
they are attempting to reflect the mood of its audiences. The brand keeps in mind to create
tweets that are in a good taste and are not hurting any sentiments or feelings.

With the help of influencers and active Twitterati’s, Netflix has been managing to get quick
responses to such moments.

Here are few snips from ‘Netflix India’s’ official twitter account.
Netflix has been in India for a while and is working hard to build a strong community of
audiences. The ad free platform recently launched its tailor-made plan for India which is at
Rs 199 per month. This is our fourth Indian plan, in addition to the existing basic, standard
and premium plans. The brand is facing a tough competition from its global and domestic
rivals both at national and regional keeping the Netflix teams awake at nights.

Netflix is investing heavily in Indian films and series across all genres and for all
generations, including much-loved hits like Sacred Games, Chopsticks and Mighty Little
Bheem. Thirteen new films and nine new original series are already in the pipeline.

Mantra behind Netflix’s highly effective social media marketing :

They communicate with their customers like a fan, believing a brand can only achieve
success with an authentic voice—unlike other entertainment companies, which stick to a
rigidly formal approach when interacting with their followers.

Humor in Advertisements

Globalization has resulted in cultures becoming more alike in many ways. The challenge is
determining when communication methods can be common for a global market as opposed
to targeted messages for a specific geographic area or demographic. When companies try to
expand internationally they face the challenge of adapting their advertisement when
communicating with the customers from new market as well as the existing customer base.

This is only suitable if the idea, product, or service that you’re promoting is not particularly
controversial. Although bold humor grabs attention quickly, it can backfire on you so bad,
thus leaving a long-lasting negative impact on your audience. But the good news is .,

Humor in advertising generates the most engagement if done correctly.

And when it comes to humor appeal, there’s no one in the industry that can dodge Netflix.
Since their brand tone is known to be a bit casually humorous, it resonates well among the
millennials.

Netflix India uses its twitter’s official account as a meme page. They have adopted a casual
approach to interact with their followers. The streaming service is hard to avoid on Twitter. If
you’ve ever stalked Netflix’s Twitter account in your spare time, you’ll notice how casually they
send out tweets and get people talking about them. Their social media team doesn’t even put
money into sponsoring tweets—instead they simply craft a casual tweet, flaunting how charming
and witty they are and voila… it goes viral!

Netflix fully understand how their subscribers procrastinate while binge-watching Netflix the
whole night. They know people share Netflix passwords among friends and family, and will do
whatever it takes to avoid paying $10 a month.

Here are a few snips of Neflix Inc.’s twitter posts wherein they engaged audience with the
use of satire and humor.
A sense of Recognition to its viewers and followers :
Netflix acknowledges funny tweets. That means if you tweet applaudable jokes or memes at
Netflix that also promotes their content, you have a good chance of getting retweeted by their
official account.

This strategy helps them pull high engagement rates on their tweets and posts.

This looks like Netflix supporting its subscribers, but it’s also another cost-free marketing
strategy. It’s something that helps the brand stay top of mind every time a customer thinks about
relaxing and watching movies at home.

E-Mail Advertising:
 As smart brands do, Netflix do not pile your inbox with repetetive spam emails. The company
keeps a strong eye on your browsing behavior and sends out personalized emails based on that.

Here’s just a sample of user preferences that Netflix measures:

 What time you watch content, on which day

 When you pause, rewind, and resume content

 The ratings you give to each movie/series

 The device you use to watch that particular show

 Do you prefer watching a single episode, or entire series at a time?

 Other browsing and scrolling habits

Netflix not only addresses its users with their first names, but also sends out highly personalized
content based on the factors mentioned above. Netflix also throws push notifications to users
who’ve permitted them.

Netflix took this hyper-personalization one step further and allowed its marketers to better
understand what content you would be most interested in by grouping you with others with
similar interests. Using data it already has, Netflix now offers suggestions on content likely to hook
you and keep me watching. Marketers know this as segmentation, and Netflix makes the most of
it. Its custom journeys categorize users and focus content to draw viewers back or deeper into its
platform. For example, sign-up abandoners and cart abandoners take different journeys.
Netflix’s OOH Campaign :

When it comes to advertising and marketing, Netflix never fails to impress. The digital streaming
platform has often taken the traditional billboard route in a big way to reach out to its
consumers. Roads of Mumbai and Delhi are full of gigantic hoardings featuring Netflix shows
such as Leila and Sacred Games, and highlighting what’s new on the streaming platform.

In busy metros like Mumbai, most citizens find themselves faced with long commutes. These are
often riddled with blaring horns, dust, heat and the ever-present risk of accidents. Netflix India's
new outdoor campaign aims to capitalise on the frustrations of an everyday commuter - gently
reminding them that they could be watching Netflix on their phones with the mobile plan for Rs.
199, instead and many other such appealing offers.

Not just Netflix, the scenario is pretty much same with most OTT players in top six metros of
India. Digital video platforms are spending plenty to stand tall at premium sites in cities to
garner eyeballs. In fact, according to reports, in 2018, the OTT segment surpassed the real estate
sector to become the biggest spender on outdoor advertising in top metros.
According to Shailesh Loni, Assistant Vice President, Laqshya Media Group, the marriage
between OOH and Digital has worked fantastic across India in the past five years.
“To start with, because of the dotcom boom, Flipkarts and Snapdeals and Quikrs saw value in
OOH and spent huge on it. Today, OTT channels, which are completely digital in nature, use
OOH as one of the prime mediums to reach their TG.”
“On one hand, they push trials through increasing app downloads, and on the other hand, they
have to keep the users active. Keeping users active is the biggest challenge. Planned and
consistent back-to-back OOH campaigns is the best strategy to achieve and overcome this
challenge. According to me, Netflix must have spent over Rs 50 crore across metros in India,”
Loni explains.
According to professional service company KPMG, OOH advertising is broadly segregated into
two parts - airport and non-airport. Airports contribute 30 per cent of OOH's total revenue while
the rest is divided among railway stations, high-traffic streets, elevators, shopping malls, and
high street markets. The Rs 3,200 crore OOH industry (FY18) is estimated to grow by 9.2 per
cent CAGR to Rs 4,970 crore by 2023.
Outdoor is one of the oldest advertising mediums. And interestingly, the most prolific user of this
space today is the youngest entertainment platform- OTTs.

While Netflix, Amazon Prime Video and Hotstar could lead the chart in terms of spends, analysts
say players like Zee5, VOOT, ALTBalaji, Eros Now and MX Player will also contribute
substantially to the OOH ad pie this year. For example, Zee5 is expected to have an annual budget
of Rs 70 crore for OOH, similar to that of Amazon Prime Video in India. A lot of outdoor
advertising spend at Hotstar is expected to go into Hotstar Special, which showcases its original
series; it has launched OOH campaigns for its webseries Roar of the Lion and Criminal Justice.

Major reason for OOH spends to be higher this year is due to OTT players strengthening their
presence in tier-II and tier-III markets, and looking at yearly deals and long-term campaigns. For
example, ZEE5 is fast acquiring OOH properties in tier-II markets.
Given the jostle for space, the price of outdoor media is also expected to go up this year by 8-10%,
say media experts. According to Rachana Lokhande, co-CEO, Kinetic India, which handles the
Netflix OOH account, “Today, OTT players are what consumer electronics or e-commerce were
two-three years back in terms of OOH spends. Now, the latter use it only tactically. OTT may take
a similar route.”

As per the reports, Netflix India is spending approximately Rs 5-6 crores on Out-Of-
Home (OOH) campaign. The billboards are installed all across the roads and flyovers of the
Western Express Highway, Juhu Circle and Bandra Linking Road, with an agenda to generate a
buzz for its first original series in India.

According to a senior media planner, “When Amazon Prime launched its second original web
series, Breath, they spent close to Rs 10 crores which was much more than any fiction and non-
fiction show. He said, “Since it is Netflix India’s first series, they will not compromise on the
advertising. It’s an on-going campaign; Netflix must be spending nothing less than Rs 5-6 crores
on OOH.”

Netflix is planning to own up to 35 billboard displays in Hollywood, as per reports. Netflix has
been rigorously using billboards in Hollywood to promote their shows. The heavy use of OOH
billboards by the online streaming platform hints at this success. And for Netflix India, Kinetic
India has been the OOH agency for advertising their different series.
Special Ad Campaigns Around Festivals :

Festivals, specifically in India, is seen as a perfect opportunity for marketers to capitalize the
sentiments of the market. Netflix Inc does the same but with a very different approach.

Netflix India has rolled out an ad film ahead of Diwali. Conceptualised by The Glitch, it features
director Anurag Kashyap.   It opens in a house. Kashyap is seen greeting his family. The film goes
on to mock the traditional Diwali advertisements we see every year. The voice over says, 'Diwali,
that special time of the year, where your whole family comes together in slow motion. You see it
every year, in every ad.' Showing one character, who plays the father, it adds, 'Look at this guy.
How many ads like these do you think he's acted in.' As the children take crackers from his lap
and run, the man replies '137'. The film goes on to show the 'adorable little angels', 'the thoughtful
husband' and 'the loving wife'. The film then shows the family together as Kashyap is taking a
selfie. Kashyap then turns towards the camera and asks 'why are you still watching this ad'. The
voice over continues 'Diwali ads may never change, but your entertainment certainly can. Netflix.
Watch great stories, uninterrupted and ad-free.'    The film was published on 26 October 2016. 

The advertisement is funny and uses a fresh take to get viewers to subscribe to Netflix India, for
ad-free original content to avoid being subjected to repetitive, mundane advertising on the
television. 

Digital Marketing Strategies:

Netflix is a leading company providing streaming entertainment service with 183 million
paid users in over 190

countries watching TV series, documentaries, and feature films in various genres and
languages.

Netflix’s digital marketing strategy includes a wide variety of campaigns, social media
posts, and
opportunities for members to watch any content anytime, anywhere, or on any screen
connected to

the Internet.

Included in the Netflix digital strategies, Netflix’s social media posts, campaigns, and
commercials are quite

remarkable, attracting more attention and bringing more members. Now, we will look at
the key takeaways from

Netflix’s digital marketing strategy explaining how it achieves to protect its central
position in the digital content industry.

We can say Netflix has a high digital presence in form of

advertisements(video,banner,pop up,display,social media etc)

. But the greater advantage lies in the higher engagement rate which netflix has
achievedd successfully.
PRE and POST COVID STRATEGIES

Though the extreme negative repercussions cannot be ignored, the ongoing lockdown
amid the corona virus pandemic has been a blessing in disguise for some. Digital
platforms (OTT) are one of the major beneficiaries of the current scenario across India.
Given that all cinema halls and malls have been closed for almost three months, people
are left with few entertainment options other than television and digital. At a time when
production of shows have been halted video streaming platforms have upped its ante
when it comes to the acquisition of films. With most of the films being premiered behind
a paywall – the aim of these acquisitions is essentially to drive subscription revenue. As
per a senior industry leader, this is the best time for platforms to build a subscription
business and for that, they need a strong library of content. “The recovery of the cost of
acquisition will solely depend on the platform’s ability to drive incremental paid
subscription.”

While the world continues to live in lockdown, the impact of the novel coronavirus is
bringing unprecedented changes in the behaviour and habits of people in terms of
media and entertainment consumption. The curren situation of pandemic and the
resultant lockdown has forced people to bring in a transition in their behavioural
patterns, including that of digital consumption.

A WPP report on ‘Impact of COVID-19 on consumers & brands’ suggests that the video-
streaming/OTT platforms have seen over 67 percent rise in the number of average
users since the nationwide lockdown. It is no surprise that the OTT platforms are buying
the new releases and rolling it out to provide its viewer base with first day, first show
entertainment.

Let us study in detail the impact of the pandemic on the operations and revenue of our
two chosen brands, i.e, Netflix and Amazon Prime Video.
 Shift in the strategy:

India has the world's most prolific film industry, churning out nearly 1,800 releases in
2018. Stars are worshipped like gods, with fans building temples and making
pilgrimages to their homes.

Going to the cinema also remains a hugely popular and affordable pursuit, with 75
rupees ($1) buying three hours of entertainment in an air-conditioned movie theatre.

Some of the higher-end multiplex cinemas have menus that include biryani being
delivered to your recliner, and blankets to snuggle under if the air conditioning is too
cold.In the pre-corona era, a major challenge for these video streaming companies was
to acquire more and more subscribers. These platforms were not permitted to premier
the new releases of the film industry. Viewers loved to grab a coke and enjoy their
favourite releases first day first show in the cinemas and theatres. Hence, the
subscription level never showed a surprising increase.

However, with more than half of India's population under 30 years of age, and many of
them consuming entertainment on mobile phones and laptops in a personalized
manner, the likes of Netflix , Amazon Prime Video, Hostar (now Hostar+Disney) and
other major OTT streaming platforms were starting to make inroads even before the
corona virus.

But, we can make an assertion that the corona-virus pandemic has given a sudden
boost to the shift to personal entertainment among the people of India and worldwide.

What’s New in the offerings?

The OTT platforms have stepped up and now are being given the license to premier the
new releases till the time the doors of theatres and movie halls are shut. A move started
by Amazon Prime Video and ZEE5 has now turned into a full-blown segment as
Disney+Hotstar on Monday announced that it will launch a new tab ‘Multiplex’ on its app
 which will premiere Bollywood movies. “We announced the launch of Disney+ Hotstar
Multiplex with the intent to change the way Indians watch and enjoy Bollywood movies.
By releasing some of the biggest Bollywood movies directly on the platform, we are
creating a network of virtual theatres across hundreds of millions of smartphones across
the country, giving people the choice and convenience to catch these movies ‘first-day
first show’,” Disney+Hotstar spokesperson, said in an email statement.

According to industry sources, Disney+Hotstar bought Akshay Kumar’s Laxmmi Bomb for

roughly about Rs 150 crore. On average, the cost of acquisition for seven movies
bought by the platform amounts to somewhere between Rs 500 crore – Rs 600 crore.
Usually broadcasters tend to acquire both digital as well as TV telecast rights.

Depending on the number of years the digital rights have been bought for the movies,
the cost will be staggered over those many years on the platform’s financials. For
instance, if the telecast rights have been acquired for five years – then Star India will
pay that fee in a staggered manner over those many years. “We have partnered with
the best directors and most talented actors and we feel that our initiative of launching
Disney+ Hotstar Multiplex will dramatically increase the number of movies being made,
giving cinema-lovers more films to enjoy and the creative community more films to
make.” Disney+Hotstar spokesperson added.

To keep up with the demand, big players like Amazon Prime Video and Netflix shifted to
standard definition from HD to reduce the load on bandwidth. Also, with Disney+Hotstar
getting launched, the audience was spoiled for choices. Web shows like Special Ops,
Panchayat, Marzi, Four More Shots Please Season 2 and Hasmukh were lapped up by
viewers.

Industry experts believe that as viewers are starved of fresh content as well as
theatre experience, the release of new movies on these platforms will pave way
for a horde of new subscribers. Additionally, this move might propel a new revenue
stream for OTT besides their annual and monthly subscription plans.

An Optimistic Note:
 The KPMG report said “habit formation could result in a new normal and accelerated
growth in consumption and monetisation” for the platforms. Pahwa agreed that people
will prefer OTT even after lockdown ends. According to her, the audience has gotten
used to watching content from the comfort of their homes. She even suggested the
release of impending small budget films online. “Though I don’t see profit happening for
at least a year, but currently, if we manage to get back at least the production cost,
that’s more than enough,” said the actor, whose directorial debut ‘Ramprasad Ki Tehrvi’
is awaiting release.

NETFLIX

The COVID-19 pandemic has been good business for Netflix: the video streaming
service has added more than 15 million new subscribers so far this year.

From an investing perspective, Netflix always surprises. Either the company’s quarterly
results turn out to disappoint or amaze — rarely do they stay within expectations.

Netflix stocks have soared since the beginning of the pandemic as people practising
self-isolation have turned to their TVs for comfort, but fell when the latest results were
announced because the growth didn’t fully meet expectations.

Netflix pioneered the subscription-based video streaming business model. For a fixed
monthly fee, subscribers get a virtual smorgasbord of content — Hollywood, Bollywood,
Nollywood and dozens of Netflix’s own productions. Subscribers can search particular
movies or just browse through individually tailored recommendations based on their
prior viewing habits.

However, Having such a diverse choice of shows may be good for viewers, but it’s not
economically efficient from a business perspective.

Contrasting Business Model:

 The subscription model requires Netflix to buy and produce a wide range of movies and TV
series, many of which may be of no interest to a majority of viewers. The larger the range of
movies, the less efficient the service.

In contrast, pay-by-view models provided by companies such as Apple through its iTunes store
require customers to make a clear decision about whether they want to see the movie before
renting or purchasing it. More popular movies may be more expensive, less popular movies
could be free or viewed for a small fee.

This model is efficient for viewers. You only pay for what you consume and your choices are
likely to be better informed.

Both business models have pros and cons.

Many viewers enjoy consuming a variety of movies from all over the world, often on an ad-hoc
basis. This kind of explorative viewing is encouraged by subscription-based models and less
likely when you pay by view.

However, when rival models co-exist in a competitive industry, the more efficient business
models tend to win. The market fails first on the production side. When production companies
try to acquire financing for new ventures, financiers are more attracted to movies or TV shows
that are similar to what’s currently popular. As a result, current genres will be strengthened while
diversity loses.

Ever-rising Sub Count amid the pandemic:

Netflix added a record 15.8 million subscribers in Q1 of 2020, more than doubling its initial
estimates of 7 million subscribers, per company statements. The company added 2.3 million
domestic subscribers, up 23% year-over-year (YoY), and a massive 13.5 million abroad (up
74% YoY), underscoring the company's international expansion efforts in recent years.

The streaming giant's record growth was fueled largely by the coronavirus crisis. While the
pandemic has put pressure on consumers to reduce nonessential spending, it has also left
many people with both more time on their hands and fewer leisure options to choose from.

Netflix's domestic growth is especially impressive given that it was expected to slow — now the
question is how much of the new subscribers stick around. Although its international gains are
massive, the platform's domestic growth is particularly notable given that it has been slowing for
a while as Netflix approaches market saturation and faces increased competition from the likes
of Disney+ and Apple TV+.

In fact, new eMarketer estimates, updated in April, predict that Netflix's share of US time spent
with digital video will decline for the first time in 2020. Still, this was Netflix's best quarter for
domestic subs in two years, and a signficant acceleration from last quarter's domestic additions
of just 548,000. Now, the big question the platform faces is how much of this unexpectedly large
group continues to use Netflix once the pandemic lessens. Subscription video is seeing a major
surge overall, and if enough consumers grow accustomed to ad-free SVOD, Netflix and other
platforms could see long-term benefits.

While time spent on digital media has increased across the board, subscription video has
captured a large portion of this time — 51% of US respondents reported watching these
services more due to the pandemic, according to Business Insider Intelligence's Coronavirus
Consumer Survey, which was conducted on March 31, 2020 and resembles the US population
on the criteria of age, gender, income, and living area.

While Netflix expects to see declines in viewership as the crisis lessens, it has already
succeeded in pulling more consumers into the SVOD model, and now it has an opportunity to
win over these consumers that may otherwise not have signed up for the service.

Visual Representation of Netflix’s Operations :

Study of Pre and post Corona Operations:

We see the subscription rate has touched all-time-high level of wobbling 16
million in the first quarter of 2020, published in an article of business
insider. This is in contrast to last quarter’s growth which stood at mere 9
million (worldwide).
 To add to the credibility of the graph above, this report by CNBC is added
which again reflects a prosperous growth in the sub count of Netflix Inc in
Quarter 1 of 2020-21, i.e, from March 2020 to May 2020. This was the
quarter in which almost the entire world was locked behind their door in the
fear of the pandemic, working remotely. In the name of entertainment, their
only source of dependency was on OTT media and video streaming
platforms.
 The data graph above reflects the consistency of Netflix Inc in its revenue
growth. At this harsh time of crisis, when most of the industries are
struggling to keep the head of their revenue graphs high and rising, Netflix,
along with other OTT players are in a boom period. A high rise in sub count
has ulimately led to a consistent increment in revenues.

Though, it can be noticed that the revenue level of the company has not
seen the proportional drastic rise with respect to the high and increasing
number of subscriptions.

Here might be some possible reasons for it.

With the growing and increasing viewer base, it becomes the

responsibility of the service provider to take care of the interest of all
its viewers. This includes cost related to the advancement and
development of offerings in a personalised way to its viewers.
 Huge costly procurement and purchase of premiering rights and
license of new releases.

Challenges faced in the crisis:

Everything has a price.

The one time opportunity brings with it a big challenge faced by almost all
the major OTT players.

A report by World Economic Forum highlighted the below mentioned

points.

 Netflix is reducing streaming rates in Europe amid the corona virus

outbreak.
 The company announced Thursday it would reduce bit rates for 30
days across Europe after CEO Reed Hastings spoke with EU
Commissioner Thierry Breton about reducing traffic to European
networks.
 Video, which accounts for the bulk of network traffic, puts a strain on
the infrastructure of the internet. Netflix videos in HD, for example,
use 3 GB of data per hour compared with standard definition videos,
which use 1 GB of data per hour.
 Netflix automatically adjusts the quality of your videos based on your
internet capacity, but you can also change it yourself in your account
settings.
 AMAZON PRIME VIDEO

Amazon Prime Video essentially becomes just another marketing line item for this Seattle behemoth
that seemingly now infiltrates every aspect of our lives both online and increasingly offline.

Dealing in the same service line as Netflix, this prime platform of Amazon Inc has
enjoyed a similar surge in its revenue and operations as a result of this virus induced
lockdown.

As more and more people work from home due to the coronavirus quarantine, the
streaming service has made a few of its children and family content available free to
watch on Prime Video. Shows such as 'Pete the Cat', 'Baahubali: The Lost Legends',
'Just Add Magic', 'The Stinky Dirty Show', nursery rhymes and stories of 'Chhota
Bheem' are available for free for Indian viewers.

While viewers don't need a Prime account to access the free content, they still need to
set up an account on Amazon, a company release said, on Tuesday.

The tech giant also announced reduced streaming bitrates for Prime Video that will help
cut down network congestion as bandwidth consumption has increased in the backdrop
of a lockdown following the coronavirus outbreak. Bitrate usually determines the size
and quality of video and audio files, and higher bitrate indicates better quality.

Pandemics are good for business in more than a few ways. Firstly, increased revenue
because people buy more from online sources followed by an increase in online delivery
generally moving forward will result from the pandemic as people get used to its
simplicity. Awareness of Amazon’s extras will also serve it well, Amazon doesn’t just
bring you the popcorn, Amazon also has the movie too thanks to Prime Video. In times
like this, that combination can almost become like a friend to those who are isolated.
More people doing things online is also no bad thing for Amazon as Amazon Web
Services props up a good few companies (large and small) across the globe. Pay-as-
you-go cloud services are bound to look more appealing to others too as companies
look for ways to save costs (although this might not be the time to switch...). While sales
will likely take a dip, AWS remains a golden egg for Amazon. Pandemics also mean
people lose their jobs but Amazon is hiring (100,000 extra workers were announced this
week alone). Amazon’s bank already overfloweth (+$30 billion) but the Pandemic will
mean that the company can make smart choices (scale/hire now) where others would
not be able to that will stand them in good stead for the future against competitors.
Topping all this off with a massive shot in the arm for public image as Amazon doesn’t
need PR, it’s just needs to deliver a smile stamped on your box. From hiring, raising
wages and generally keeping thing going, Amazon is acting more like a utility rather
than a service and that is only going to play to the company’s advantage when the FTC
get back on their case. For more analysis on what the pandemic really means for
Amazon, subscribe to What Did Amazon Do This Week and also get everything else
that’s going on in their world.

While late to the game, Amazon has begun to throttle the speed for Prime Video to keep
up with the extra demand as people self-isolate and work from home.
CONCLUSION :

The healthily competition of domestic airlines has set new trends in the quality of
service. Previously in the monopolistic environment of Indian Airlines the quality and
the desire to win over the constraints was totally dismal. With the oncoming of Jet
Airways and Sahara Airlines there is sea change in the quality of service and the pride
of the job.
Hence today it is a matter of great significance that the Indian Airlines staff now cares
about the passenger comfort and take pains to see that the flight is on time. Indian
Airlines so should try the high percentage 98% of on time service of Sahara Airlines is
the C of their quality of service.

Though the market may appear overextended, such services are in fact more popular
than ever: According to Leichtman Research Group, roughly three-quarters of all
domestic households currently maintain at least one OTT service, a nearly 45%
increase in the past five years. L.E.K.’s own research found the average U.S. household
now subscribes to approximately 2.8 subscription video on demand (SVOD) services,
up 9% from a year prior. The COVID-19 crisis and associated lockdowns are further
fueling demand — in a recent analysis by Morning Consult, 19% of respondents stated
they would spend more on movie and TV streaming due to the pandemic.

OTT gains continue to come at the expense of traditional multichannel video

programming distributor (MVPD) services: Recent data from MoffettNathanson shows
approximately 81 million MVPD households in 2019, down roughly 17% from more than
98 million just five years ago, and many analysts, as well as L.E.K.'s proprietary
consumer research, suggest there are more declines to come. Convenience, breadth of
content and compelling value continue to drive OTT consumption, with demand
stemming in large part from younger viewers, who continue to tune out pay TV in favor
of OTT — according to our estimates, millennials currently subscribe to 4.6 different
SVOD services, not counting the various free ad-based video on demand (AVOD)
services they use.

LEARNINGS FROM THE PROJECT :

This project helped me gaining the broad insight of the business operation in both the
industries. The key leanings from this project are :

 I learned how the various business metrics are applied in the evaluation of the
company’s success.
 Volatile industries have to have flexible strategies. In case of unprecedented
situations like that of the pandemic, change in strategy of the operations
becomes a necessity to survive in the ever competitive market.

Apart from these, there is a vast spectrum of knowledge and learnings of various
marketing and financial aspects of a business which I obtained during the course of this
project.
 BIBLIOGRAPHY / REFERENCES

 www.wikipedia.org
 www.indianairlines.com
 www.googleform.com
 www.airindia.in
 www.indigo.in
 www.netflix.in
 www.amazonprimevideo.in
 scholar.google.com
 surveydata.in
 www.surveymonkey.in
 Investopedia.in

Other sources include similar websites from where secondary data

was collected regarding the aforementioned topics.