Case 4.2 Netflix in India
Case 4.2 Netflix in India
Lubna Nafees, Mokhalles Mehdi, Rakesh Gupta, Shalini Kalia, Sayan Banerjee and
Shivani Kapoor
2. The company
Netflix was established in 1997 as a digital video disc (DVD)-rental-by-mail firm [2]. As of
2019, Netflix was a global streaming entertainment service provider of movies and television
(TV) series. It provided commercial-free content with unlimited viewing to its subscribers on
any internet-connected device or screen for a monthly fee2. It had more than 167 million
paid subscribers in over 190 countries to whom it provided a range of content from TV
series, documentaries, feature films, etc. of diverse genres and languages [3]. It offered
flexibility in viewing content to its members, which they could watch at their convenience on
any screen. Wilmot Reed Hastings and Marc Randolph founded the company, and Reed
Hastings was the Chief Executive Officer and member of the company’s board of directors.
The company began streaming in the US in 2007 and expanded internationally in 2010.
Refer to Table 1 for the key locations of Netflix worldwide. Netflix’s first original series
debuted in 2013, and it became global in 2016 [4]. Netflix milestones over the years that
redefined movie and TV consumption are given in Table 2.
Disclaimer. This case is written
solely for educational purposes
and is not intended to represent
3. The entertainment and media successful or unsuccessful
managerial decision-making.
Entertainment and media (E&M) industry was constantly growing its revenue and share in The authors may have
disguised names; financial and
the global business. Its growth was propelled by internet advertising, live entertainment, other recognizable information
gaming and filmed entertainment [5]. Price Waterhouse Coopers (PwC’s) E&M outlook to protect confidentiality.
DOI 10.1108/EEMCS-10-2019-0285 VOL. 11 NO. 2 2021, pp. 1-31, © Emerald Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
Table 1 Netflix global presence
Asia pacific Europe The USA Latin America
Hsinchu City, Taiwan Amsterdam, The Netherlands Los Angeles, California Alphaville, Brazil
Makati, Philippines Berlin, Germany Los Gatos, California Mexico City, Mexico
Mumbai, India London, UK New York, New York –
Seoul, South Korea Madrid, Spain Salt Lake City, Utah –
Singapore, Singapore Paris, France Washington, DC –
Tokyo, Japan Rome, Italy – –
Source: “Locations across the Globe”, Netflix Jobs, accessed 14th April 2020, Retrieved from https://jobs.netflix.com/locations
highlighted several drivers that reshaped the E&M industry such as omnipresent high-
speed internet connectivity, consumers accessing content, services through mobile
devices and consumers’ preference towards personalized content. Companies focusing on
new revenue growth sources (e.g. gaming), shifted from traditional media to social media
and technology platforms [6]. E&M business saw maturity in the developed countries,
namely, the USA, the UK, Switzerland and started growing in emerging economies such as
India and China. E&M market revenue contributed to about 2.53% share of global gross
domestic product in 2017 [7]. Also, global economic growth led to an increase in overall
consumer spending in the E&M industry. PwC’s Global E&M Outlook 2018–2022, estimated
that spending on the E&M industry was going to increase to US$2.4tn [8] in 2022 from US
$1.9tn in 2017 [9]. Goldstein Research analyst forecasted that the global E&M industry
5. Brand Netflix
Netflix was positioned as a movie and television entertainment network among the
viewers [20]. It was unique in providing their viewers with ad-free content of their choice and
the flexibility of consumption [20]. Netflix positioned the brand as “Movie Enjoyment Made
Easy [21]”.
Netflix used its logo to promote their intentions of “[creating] a premium cinematic feel as
[they] continue to set the industry standard for original content [22]”. Worldwide, in
comparison to Hulu, Home Box Office (HBO) and Amazon Prime – people generally
associated movies and quality originals when they thought of Netflix (Levenson and
Kennemer, 2020) (https://brand.netflix.com/en/assets/brand-logo/) [23].
What made these originals high quality is that Netflix had delved into creating relatable and
emotionally intelligent content. One way they had done this was by writing character-driven
storylines, rather than plot-driven. This had intensified with exploring topics that have
recently become more socially acceptable to create a more dynamic conversation around –
including love, disability, class, sexual preferences and political stances (Vogels, 2019).
Another form of storytelling that made Netflix more pioneering and experimental than other
streaming services was interactive storytelling, which prompted the viewers to decide the
direction of the show. An example of this was You vs Wild, a spin-off of Man vs Wild, where
the viewer-turned-player decided what actions were needed to survive (Vogels, 2019).
Because of the increasingly socially progressive themes appearing in Netflix’s renowned
original content, a good portion of their user base was young adults who were more open-
minded to the ideas being introduced in some of these shows – along with the other titles
they provided. However, with such a wide range of titles ranging from artisan reality TV
shows to sitcoms to drama and crime series, Netflix’s demographic was vast. This was
shown in its home market with 60% of US adults subscribing to Netflix and 77% of Video
on Demand customers subscribing to Netflix. This was the culture that Netflix created and
took to the new markets where they launched (Vogels, 2019).
Netflix India had successful shows such as “sacred games”, “little things”, “Delhi crime”
and the animated series “mighty little Bheem”. Hastings added,
In the last one year, 27 million households outside of India have started watching ’Mighty Little
Bheem’. So, Indian ideas and characters are spreading. We got one eye on being very local and
authentic and one eye on what will be shared around the world [26].
Netflix’s critical challenges in India were internet issues and market competition. Internet
issues especially had a direct impact on its offerings. Netflix’s shows were known for its high
quality, but a slow internet connection would just be the perfect spoiler. In India, the internet
was still at a very nascent stage and people were still learning the process. Internet
bandwidth was the biggest issue in India, and most of the users were on 2 G or 3 G. To add
fuel to the fire in the internet situation, Netflix had stiff competition in that limited bandwidth
7.2 Price
Initially, Netflix launched its services in the Indian market with its global subscription pricing.
However, in its rendezvous with the Indian audience, the price was the mountain that was
not coming to Mohammed. India was a price-sensitive market; a fact, which Netflix
overlooked or not paid enough attention to. In India, the price of a cable TV subscription
was less than US$5 per month, which was 20 times less than the US market (US$99 per
month). Netflix’s services were priced around US$8–US$12 in India where the premium
cable subscription channels were available at a much lower price and provided a much
larger basket of offerings. Therefore, Netflix introduced a differential pricing strategy to
penetrate the Indian market. Netflix offered a monthly mobile-only plan of US$2.63 for users
to access the content in competition to Amazon Prime Video (US$1.70 per month) and
Hotstar (US$3.95 per month) [27]. At the same time, it continued to offer the three original
pricing slabs of US$6.59, US$8.57 and US$10.55, respectively [27]. Baptiste said, “the
mobile plan for Rs 199 (the US$2.63) a month is made for India. Users will have access to
the same unlimited SD, ad-free content under this plan” [27].
Netflix’s social media growth had been phenomenal; they had majorly relied on social
media to promote its content. Netflix’s competitors such as Hotstar had a strong TV
presence in India through Star TV, so it used these interactive social media posts to
highlight the advantages Netflix had over TV, such as advertisement free entertainment and
time flexibility. They roped in micro-celebrities such as TV stars, Alok Nath, stand-up
comedians, the cast of popular web series, Tanmay Bhatt, for promotion [30].
Their active interaction started to show results, and in the year 2018–2019, Netflix’s fan
growth was 10 times more than Amazon Prime Video and 19 times more than Hulu and
Hotstar (a popular streaming rival in India) (Ramakrishnan, 2019). Netflix’s active
conversations with the audience had helped them build a captivating social presence
(Table 4).
When Netflix entered the Indian market, their content was international, but their campaign
was total “desi” (local) and with a lot of humour. They used the Indian stuff to promote
international content such as the henna design for “Narcos” characters (Figure 1). To
leverage the craze of Indians for Bollywood in July 2019, the brand started a series of
tweets where Bollywood actors were compared with food items. Indians enjoyed it and were
engaged to the extent that they started sending their names with food items. Netflix
engaged the target audience well (Gupta, 2019).
The brand took feedback from the audience very seriously and used social media to
communicate with them. One thing that was at the core while connecting with the audience
was humour and wittiness. They converted controversy to humour too. For instance, in
August 2018, netizens started trolling Radhika Apte for being a part of almost all Netflix’s
series; the company was quick to respond by developing a campaign (Figure 2). It
converted trolling into appreciation and gained a lot of popularity[31].
Another promotion that Netflix did could be seen on its Twitter account that displayed the
most popular releases of 2019 for India. It defines popularity “by the number of accounts
choosing to watch at least 2 min of a series, movie or special during its first 28 days of
release on the platform” (Mitter, 2019). Top of the list was one of the most popular Indian
series Sacred Games S2, followed by the movie Kabir Singh (film). The remaining in the
order of their popularity were Article 15 (film), Bard of Blood (series), Drive (film) Badla
(film), House Arrest (film), 6 Underground (film), Delhi Crime (series), Chopsticks (film)
(Figure 3) (Ghosh, 2019). The craze of Indians for movies can be seen in the list as 7 out of
10 are movies and only three are series. Netflix also released a separate list of series and
movies (Figure 4).
7.4 Partnerships
7.4.1 Partnership with direct to home providers. Netflix entered India in 2016, forming
partnerships with several companies such as Bharti Airtel, Atria Convergence Technologies
(ACT) Fibernet and Hathway [32]. Nigel Baptiste, Netflix’s Director of Partner Engagement,
said that partnerships were so crucial to the company’s long-term success that they wanted
to iron out every possible bit of friction between their members and content.
Every bit of friction between our members and content, we want to eliminate. So, whether it is
increasing payment methods, different price plans, working with different partners, we will get
there. Where we are is a far cry from where we want to be, and we continue to be on that
journey [32].
Netflix had a strategic partnership with Tata Sky [a Direct to Home (DTH) provider], Airtel
and Videocon d2h in India (Ray, 2018). Tata Sky and Netflix had a strategic alliance to
increase its presence among the Indian audience. The strategic partnership benefitted Tata
Sky and Netflix’s subscribers to access the global content of Netflix (including TV shows,
films, documentaries, stand-up comedy and kid’s titles) through Tata Sky platform [34].
Moreover, in March 2018, Netflix collaborated with Airtel and Videocon d2h to add the
Netflix app to these two companies’ set-top boxes [35]. Harit Nagpal (Managing Director
and Chief Executive Officer of Tata Sky Limited) said,
Tata Sky’s partnership with Netflix adds another dimension to providing worldwide quality
content On-Demand for our subscribers. Keeping up with our promise of pioneering innovation,
we will soon announce the possible offering with this partnership. We are glad to include Netflix
in our family and look forward to keep offering an extraordinary entertainment experience to all
our subscribers [36].
Netflix’s partnership with Tata Sky had emerged because of subscribers’ interest in viewing
the shows on connected televisions in India. Netflix’s subscribers who viewed the shows in
India’s connected TV accounted for 34% of subscriber’s viewing hours as of October 2017
(Vikas, 2018).
Moreover, Netflix started working to enhance viewer experience across the screens such as
mobile, tablet, laptops and TV. Netflix invested in the entire ecosystem to provide originals
and licensed content in different categories and languages for India. Nigel Baptiste set a
goal in 2019:
Our goal is to get Netflix on as many devices as we can. Today, Netflix is present on 1,700-plus
device models. [37]
8. Competition
Netflix competed with linear networks, pay-per-view content, DVD watching, other internet
networks, video gaming, web browsing, magazine reading, video piracy, etc. for a share of
member’s time and amount spent on relaxation and entertainment. The company said,
We strive to win more of our members’ "moments of truth". Those decision points are, say, at 7:15
pm when a member wants to relax, enjoy a shared experience with friends and family, or is
bored. The member could choose Netflix or a multitude of other options [38]
Hastings stated that Netflix would continue with its core strategy of offering content for
binge viewing. Netflix was not a movie production company and would not go for buying
production or post-production companies. Hastings was clear that they were not in the
acquisition business (Chu, 2019).
The competitors of Netflix were TV shows, streaming service providers, video games,
YouTube and even sleep. According to Hastings, subscribers’ numbers were not the right
measurement technique to understand the competition. On competition, Hastings said,
“time will be the real competition” (Sherman, 2019). He further added:
The key to us is to focus on our customers and how do we produce amazing stories for them. You
can learn things by looking at competitors, but you don’t want to get focused on them. All we
have to do to succeed is continue to do amazing content, stream it, make it personalized and
relevant (Pallotta, 2019)
ErosNow (a digital arm of Eros International Plc) shows Bollywood classics and movies in
vernacular languages, TV shows of Hum TV and Abdul Razzak Yaqoob Digital (Pakistan-
based TV Channels). Hooq provided the latest Bollywood blockbusters, Hollywood movies,
foreign language movies, popular TV series (Big Bang Theory and Detective Comics, Inc.
superhero), TV shows (Arrow, The Flash, Legends of Tomorrow and Supergirl). Hungama
offered free music streaming services in different languages. Movies in 12 other languages
included English, Hindi, Bengali, Telugu, Malayalam, Tamil and Punjabi. Spuul (a
Singapore-based company) offered Bollywood movies and classical Indian TV shows such
as Fauji, Malgudi Days, Dekh Bhai Dekh. MX Player (owned by Times Group) had popular
Hindi and English language shows and videos in regional language included in Tamil,
Telugu, Urdu, Kannada, Malayalam, Bangla, Marathi, Bhojpuri and Odia. Vudu owned by
Walmart was yet another option for the audience. Apple TV+ had original shows, movies
and documentaries made JJ Abrams, Steven Spielberg and M. Night Shyamalan. Disney
Plus (an OTT platform) planned to introduce Disney-owned movies and shows included the
Star Wars franchise, Marvel Cinematic Universe, Pixar and the Simpsons in India [41].
Notes
1. This case is written purely based on secondary sources.
2. “Long-Term View”, Netflix Investors, accessed 14th April 2020, www.netflixinvestor.com/ir-
overview/long-term-view/default.aspx
3. “Company Profile”, Netflix Investors, accessed 14th April 2020, www.netflixinvestor.com/ir-
overview/profile/default.aspx
4. “Long-Term View”, Netflix Investors, accessed 14th April 2020, www.netflixinvestor.com/ir-
overview/long-term-view/default.aspx
5. “Global E&M Industry 2017–2025”, Goldstein Research, 18th June 2019, accessed 14th April 2020,
www.goldsteinresearch.com/report/global-entertainment-and-media-industry-analysis
6. “E&M industry to be revolutionized by technology and telecommunication players”, mynewsdesk,
06th June 2018, accessed 14th April 2020, www.mynewsdesk.com/sg/pwc-singapore/press
releases/e-and-m-industry-to-be-revolutionised-by-technology-and-telecommunication-players-
2530397
7. “Global E&M Industry 2017–2025”, Goldstein Research, 18th June 2019, accessed 14th April 2020,
www.goldsteinresearch.com/report/global-entertainment-and-media-industry-analysis
8. 1 US Dollar = 75.74 Indian Rupee as on 1st April 2020.
9. “E&M industry to be revolutionized by technology and telecommunication players”, mynewsdesk,
06th June 2018, accessed 14th April 2020, www.mynewsdesk.com/sg/pwc-singapore/pressr
eleases/e-and-m-industry-to-be-revolutionised-by-technology-and-telecommunication-players-
2530397.
10. “Global E&M Industry 2017–2025”, Goldstein Research, 18th June 2019, accessed 14th April 2020,
www.goldsteinresearch.com/report/global-entertainment-and-media-industry-analysis
11. “E&M industry to be revolutionized by technology and telecommunication players”, mynewsdesk,
06th June 2018, accessed 14th April 2020, www.mynewsdesk.com/sg/pwc-singapore/press
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12. “Indian E&M industry to reach Rs 3.5L cr by 2022; to emerge as one of the top 10 largest OTT video
markets: PwC report”, medianews4u, 7th June 2018, accessed 14th April 2020, www.media
news4u.com/indian-e-to-emerge-as-one-of-the-top-10-largest-ott-video-markets-pwc-report/
13. “Global E&M Outlook: 2019–2023”, PwC, accessed 14th April 2020, http://bestmediainfo.in/mailer/
nl/nl/2019_Global_E_M_Outlook.pdf
14. “India’s E&M industry to clock over INR 451,373Cr by 2023: PwC Report”, PwC India, 6th June
2019, accessed 14th April 2020, www.pwc.in/press-releases/2019/global-entertainment-and-
media-outlook-2019-2023.html
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Corresponding author
Lubna Nafees can be contacted at: [email protected]