Competition is tough for Netflix in India

With tough competition from local and worldwide players in the nation’s Rs1.26 lakh crore ($19.2 billion) media and entertainment industry, the American video streaming giant has identified that was battle life ahead.

CEO Reed Hastings shared his words earlier this month, “There’s a great battle with Hotstar, YouTube, and Amazon and many others, all competing for a consumer’s time. We are one of the choices, but what’s unique about Netflix is that we’ve got an international titles combined with great local talent”

This popular streaming company, Netflix is recently up against 29 other OTT content givers in India, according to the currently launched Media and Entertainment Industry Report, 2017, by KPMG India and the FICCI. And its subscription numbers tell that there’s a lengthy way to go before Netflix can match rivals such as Hotstar of Star India.

The hugest drawback is likely to be Netflix’s steep pricing. Hotstar premium subscribers pay only Rs.199 (monthly), compared to Netflix’s beginning rate of Rs.500. And Amazon Prime video charges an annual fee pf Rs.499 for unlimited video access, as well as [rime delivery for orders on its e-commerce podium.

While the KPMG India-FICCI report doesn’t identify whether Netflix’s active subscriber have all paid Rs.500 or more, an analysis by news website Medianama recommends that the company has only between 200,000 and 300,000 paid subscribers in India. It based this on an appropriate information response got in February.

Here’s how Medianama explained its methodology:

The LTU (Large Taxpayer Unit) has given response that Netflix paid Rs.20 crore in taxes for January 2017. We divided this number from the service tax rate that this streaming service charges for the high rate plan, and the rate they charge on their least costly plan. With this, we arrived at a range of subscribers, between 211,500 and 337,300. Since there are three different plans, it is unlikely that either utmost in the range is close to the number of subscribers that Netflix has in India, so we were supposing that the number is somewhere between 2 and 3 lakh.

Local content and mobile first

Another velocity bump for Netflix in India is that a number of local media networks, counting Zee TV and Viacom18, are releasing their own podiums. Ozee TV and Voot, for instance, typically have more native content. And with smart device perforation spreading to the hinterlands in India, mobile is turning to an essential channel for video utilization a big bless for local channels.

A video recently accounts for 60% of mobile data traffic, according to the KPMG India-FICCI report, and mobile video is guessed to increase at a compounded yearly increase rate of 63% between 2016 and 2021.

The report did the addition, “In India, the number of video-capable devices and connections are expected to grow 2.2-fold between 2016 and 2021, reaching 800 million in number”

But the content of Netflix in India is still very city-centric, and making inroads in rural India could take various years for the Los Gatos, California-based firm. For now, this popular streaming service has tied up with Red Chillies Entertainment of Shah Rukh Khan and comedian Vir Das for an original show to serve to the local audience, but this might not be enough. Moreover, swifter 4-G-based internet services, counting Reliance Jio, are making live sports a great hit on mobile phones, and that’s a category in which Hotstar has an edge.

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