Head of Media Partners Asia, Vivek Couto, noted significant missing points in Netflix on how the platform might fail against India’s local competitors. They are Walt Disney Co. and Amazon.com Inc. Couto said, Netflix is lacking local research analysis, the company underestimates the complexity and challenges in India. Netflix built special team for analyzing the situation. One of the reasons is pricing competition.
Currently, investors are worried about Netflix’s highest ever stakes in India. Subscribers total decreased wildly, the company’s share also has crashed almost 40%. This year only they wiped out above $100bn in value. India is the second most populous country in the world. Its playground is the best place for business like Netflix. So, streaming services are highly opportunistic here.
Bloomberg analyzed the first problem in the subscriber price. Netflix executives debated in 2016, concerning market price competition. Globally, Netflix would charge around $8 to $10 a month. This was actually too costly for Indians where their TV subscription only cost $2 to $3 a month. With this price gap, Netflix decided to go on with the plan offering 499 rupees a month which is $7.50. The reason for this was, Netflix sought more lucrative subscribers.
Later, Netflix reconsidered this decision by dropping the price. But the problem is India has challenges in payment renewal monthly. Netflix’s mobile-only subscribers are more likely to cancel their subscription in just a few months. India has red tapes making customers approve payment every month.
Translation is a real challenge, India is the land where 20 languages live. This case is the biggest challenge for the production team to meet the language barrier. But Couto said most Indian signed up for international programming. They do not turn to Netflix for Indian content, he said.
