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Netflix launched its operations in India in 2016, targeting a large and growing market with high expectations for user growth. However, by mid-2018, the company struggled to meet its ambitious goal of 100 million customers due to competition and a lack of local adaptation in its global strategy. The challenges highlighted the need for Netflix to reconsider its approach to better align with Indian consumer preferences and market dynamics.

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7 views

NetflixIndia14P

Netflix launched its operations in India in 2016, targeting a large and growing market with high expectations for user growth. However, by mid-2018, the company struggled to meet its ambitious goal of 100 million customers due to competition and a lack of local adaptation in its global strategy. The challenges highlighted the need for Netflix to reconsider its approach to better align with Indian consumer preferences and market dynamics.

Uploaded by

akshay sarda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Journal of International Business Education 14: 413-426.

© 2019 NeilsonJournals Publishing. Author Promo Version

Netflix in India: Too Good a Market to


Give Up!
Lubna Nafees1
Appalachian State University, USA

Rakesh Gupta
IMT Ghaziabad, India

Sayan Banerjee
IMT Nagpur, India

Shalini Kalia
NMIMS, India

Mokhalles M. Mehdi
Assam Kaziranga University, India

Abstract. Netflix is the world’s leading player in subscription based video on demand (VOD). The
company was founded in the US in 1997 and grew at a rapid pace. By the end of 2015, it was
operating in 60 countries but the slackening growth in the US and some other key regions compelled
the management to look for new markets. In 2016, it decided to enter more than 130 countries
simultaneously. One of their main focuses was India, due to its large population, fast growing
internet user base, and younger population aspiring to western lifestyles and brands with rising
disposable incomes. Netflix believed that the Indian market was perfect for tapping into and had
huge expectations from it. But once the initial enthusiasm over its launch subsided, Netflix found
itself struggling to grow its user base across India.

Keywords: market entry, global strategy, glocal strategy, digital boom and content.

On January 7, 2016, Netflix Inc. announced the launch of its operations in 130
countries across the globe in addition to the 60 countries in which it was already
operating. This ambitious launch led to a hike in the value of its shares by 9.3 per
cent.2 This list included India, which Netflix considered an important market from

1. This case has been written on the basis of published sources only. Consequently, the
interpretation and perspectives presented in this case are not necessarily those of Netflix Inc.
or any of its employees.

This shortened version of the article is for promotional purposes on publicly accessible databases.
Readers who wish to obtain the full text version of the article can order it via the url
https://www.neilsonjournals.com/JIBE/abstractjibe14netflixinindia.html
Any enquiries, please contact the Publishing Editor, Peter Neilson [email protected]
© NeilsonJournals Publishing 2019.
414 Netflix in India: Too Good a Market to Give Up!

a long-term perspective. India was a lucrative market with a mobile subscriber


base of over 1 billion and internet subscriber base close to 500 million, with 60%
of these users accessing online content through their mobile phones.3
However, by mid-2018, as the buzz around the launch had subsided, Reed
Hastings (President and Chief Executive Officer of Netflix) was faced with a
major challenge. He had set an ambitious goal of reaching 100 million customers
in India by 2020, but Netflix was nowhere close to achieving that number. In fact
the company was facing numerous problems affecting its growth of user-base. He
was wondering whether their excessive focus on global content was the right way
forward. Not forgetting that the company had adopted a standard subscription
based pricing model and had kept prices high. He was no longer sure whether
these strategic choices were the right way to succeed in the Indian market. Netflix
was facing stiff competition from major competitors such as Amazon Prime and
Hotstar who seemed to be moving forward at a brisk pace with very different
strategies.4
Netflix had so far used a standardised global strategy to enter the Indian
market, relying on its global content at premium prices. This seemed to have
back-fired as it completely ignored the local requirements and consumer tastes of
this market. Hastings realized that he had to put Netflix on a strong path of growth
in a complex but a very attractive yet competitive market. Given his limited
experience in dealing with India, he was unsure of how exactly was he going to
achieve this.

1. Netflix India

In early 2016, Netflix began its operation in Mumbai, with the aim of gaining a
strong user base. The entry decision was influenced by the sheer size of the Indian
market (refer to Exhibit-1 & 2), favorable government policies, and the up-
coming opportunities in the digital sector especially in streaming video on
demand (SVOD). Additionally, the US market was stagnating and Netflix was not
yet operating in China. The Chinese government continued to control the Internet
- they did not allow free competition or entry into the media space.5 A study by
NASSCOM projected the number of internet users in India would reach around
730 million by 2020 (double the US population).6 India’s mobile subscriber base

2. Trey Williams, “Netflix claims global presence after launching in 130 new countries”,
MarketWatch, January 6, 2016, accessed August 15, 2019, https://www.marketwatch.com/
story/netflix-claims-global-presence-after-launching-in-130-new-countries-2016-01-06
3. Saritha Rai, “India Just Crossed 1 Billion Mobile Subscribers Milestone and the Excitement’s
Just Beginning”, Forbes, January 6, 2016, accessed on August 15, 2019.
4. Harish Jonnalagadda, “Netflix is getting crushed in India, and it’s all because of Amazon and
Hotstar”, February 2, 2018, accessed on August 15, 2019, https://www.androidcentral.com/
netflix-getting-crushed-india-and-its-because-amazon-and-hotstar
5. Ibid.

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