In India, there are around 40 companies that provide over–the–top media services (OTT), which broadcast streaming media through the Internet. The OTT sector in India was valued at 2,150 crores (US$303 million in 2018) in the financial year 2018, and it is expected to grow to 35 billion in 2019.

While the growth of the OTT industry in India is truly commendable, a majority of its rise can be attributed to the US streaming giant Netflix.

Netflix, an American streaming service, launched in India in January 2016. It became a limited liability partnership (LLP) in April 2017 and began commissioning material. For the financial year 2017, it generated a net profit of $2.02 million. Netflix generated $580 million in sales in fiscal year 2018.

In July 2018, Netflix recorded the greatest average viewing time of more than 120 minutes, with roughly 20 million viewers, as per Morgan Stanley Research. Netflix has 2 million paying customers in India as of 2020.

In this blog, we’ll discuss the impact that Netflix has had in the Indian OTT sector and what’s in store for them in the future.

How Netflix Introduced The Trend of OTT Platforms In India

Netflix revolutionized the television industry and drove cable providers to modify their business practices by generating engaging original programming, analyzing user data to better serve customers, and, most importantly, allowing consumers to watch content in the ways they choose.

Netflix is primarily a repository of material, including pre-existing and original movies, documentaries, and television programs. Subscribers may watch any show on any device at any time for a fixed monthly price.

Explaining why customers prefer Netflix and other OTT platforms over cable, Netflix CEO Reed Hastings said “Ultimately, flexibility is more important than efficiency over the long term.”

Netflix’s other breakthrough has been to relentlessly search for user data. Originally, this data was collected to serve consumers and assist them in finding material that would interest them. Netflix, on the other hand, now analyzes this information to measure which categories and talents it should follow in response to genuine demand, which is then utilized to produce Netflix Originals.

Looking at Netflix’s unparalleled growth, multiple other streaming platforms were introduced to the Indian market as well, including Hotstar (now known as Disney+ Hotstar) and Amazon Prime Video.

As more people are disconnecting their cables and moving to streaming platforms, popular cable channels adopted this technology as well, for example, SonyLIV and Voot.

Why Netflix Sees Immense Opportunity In India

Netflix is particularly interested in India since the film-loving country (which generates 2,000 films each year more than the United States) provides probably the company’s largest single-market potential since it began creating original content in 2015.

As per a PwC 2020 study, India is the fastest in the world in expanding the broadcasting market. Half of India’s 1.4 billion inhabitants are under the age of 25, and the nation is anticipated to have even more than 800 million mobile phone users by 2022. Netflix’s expansion in India is part of a larger drive across Asia, which has accounted for much of the service’s membership growth in recent years.

Netflix changed its India approach in 2018 to fulfill its audacious ambition. It invested more in local productions, provided a lower mobile-only package (with greater retention than expected), and collaborated with existing distributors like Reliance Jio to extend the service to new audiences.

It also incorporated Hindi to its interface and pledged to produce more local-language content, like the crime drama Sacred Games, which launched in 2018 and remains Netflix’s most famous Indian drama to date.

Executives have stated that they would continue to test the technique. “We’re still working things out in India,” Netflix co-CEO Reed Hastings said during the company’s latest earnings call. “As a result, such investment necessitates some guts and forward-thinking belief.”

This year, Netflix expects to release over 40 original Indian movies and TV programs, which is substantially higher than its production in most other countries outside of North America.

The Rising Competition In The Indian OTT Sector

Last year, the world was introduced to the realities of digital entertainment, owing mostly to the Covid shutdown. What seems to be a multi-billion-dollar industry in India, endangering the very survival of cinema halls, offers many more alternatives for customers.

Whilst Netflix, Amazon Prime Video, Disney plus Hotstar, and SonyLIV now hold the bulk of Indian customers, they are going to face stiff competition. However, as these established companies extend their footprint in India via content and strategic innovations, a swarm of new OTT firms are poised to disrupt and diversify the industry.

For instance, in December of last year, Starz, a prominent premium worldwide streaming platform, opened in India. Subscriptions are now available for Rs 699 for a year and Rs 99 each month. The platform intends to enter the original content development market in India in the near future.

Similarly, AppleTV is poised to disrupt India’s OTT market. According to reports, Apple is spending $6 billion on its inaugural slate of TV episodes, documentary series, as well as other originals for its streaming platform. Unfortunately, they are not currently producing original material in India.

Competition for this rapidly expanding market is unavoidable, but Hastings, who has been quoted as saying that Netflix’s main competition is “sleep,” seems unconcerned.

He does concede, though, that YouTube, which has been in India for more than a decade, is its main competitor. Data from App Annie confirms YouTube’s supremacy. YouTube had 26.4 average hours per month in 2020, trailed by MX Player at 7.8 hours and Netflix at 7.4 hours. Disney+ Hotstar and Amazon Prime Video both claimed over 4.5 hours.

How Netflix Will Continue Gaining New Subscribers

Maintain a straightforward approach. It may be as basic as spaghetti and tomatoes. That, in a summary, is the mindset of Reed Hastings, Netflix’s wealthy founder and co-CEO. When it comes to generating compelling content in India, this is precisely what he does.

Indeed, one of the most impressive victories was for an Indian show, Delhi Crime, which received the International Emmy for Best Television Drama. Not surprisingly, the Netflix creator’s eyes widen when he mentions India, where the streaming behemoth launched in 2016.

“We’ve been expanding year after year. We’ve simply been expanding our staff, producing content, and figuring out what resonates, whether it’s Sacred Games or AK against AK, or just a variety of various sorts of content,” he informed Fortune India.

Another thing Netflix discovered was that, unlike Americans and Europeans, a substantial portion of Indians view video on mobile devices. In order to target these customers, Netflix released a mobile-only membership plan in 2019 for Rs. 199 for each month, which is significantly less than its normal plan.

According to Abhishek Nag, director-business strategy, Netflix India, it has to change the bitrate of movies on the back end based on criteria like the speed of the Internet connection and the equipment to provide a smooth experience.

Netflix looks to be on the right track thus far. As per the app analytics company App Annie, users in India consumed an average of 4.6 hours each day on their mobile devices in 2020, up from 3.3 hours in 2019.

Amazon Prime Video, a global rival, has launched a “Prime Video Mobile Version” in collaboration with Airtel. “Provided the country’s high mobile internet penetration, the mobile phone is now one of the most commonly utilized streaming devices,” Jay Marine, vice chairman, Amazon Prime Video Worldwide, stated at the time.

The service has also been effective in capitalizing on India’s passion for movies, with the nation having the greatest viewing of films on Netflix worldwide; last year, 80 percent of Netflix India users viewed one film each week.

Netflix India’s director-international original movie, Srishti Behl Arya, wants the business to be the home for Indian films. “There is a lovely phrase about Netflix: My Netflix is not your Netflix. We hope that you enjoy viewing it as much as possible. And if you’re not creating for a single individual, you have to be open to multiple perspectives,” she adds.

Netflix has also improved its local game, with titles such as Ala Vaikunthapurramuloo, Maniyarayile Ashokan, Andhaghaaram, and Kappela ranking in the top ten most-watched lists throughout the world.

The Looming Threat of Censorship For The Indian OTT Industry

While Netflix has certainly spurred interest in the OTT business, will they and their rivals be able to overcome the soon-to-be Government-imposed censorship?

After lawmakers affiliated with Prime Minister Narendra Modi accused series such as Sacred Games of being “derogatory,” Netflix and other streaming providers began self-censoring certain content in the terms of preventing criticism and evading regulation.

Modi’s administration has subsequently altered the governing body under which streaming firms operate, which is widely perceived as an effort to begin reining in material on sites such as Netflix.

Such rules might have a chilling impact on Bollywood’s flourishing creative ecosystem. A number of Indian filmmakers and performers told CNN last month that they’ve been walking on eggshells, concerned not only that most of the country’s most daring projects would not get off the floor, but also because they may face jail time for just performing their jobs.

In this suffocating atmosphere, Netflix, in particular, may struggle to duplicate the popularity of Sacred Games.

You can read more about the regulations that the Indian Government plans to impose on the content streamed on OTT platforms here.

Conclusion

There’s no doubt that Netflix has given the much-needed push that the OTT industry in India needed. Now that millions of subscribers have access to at least one streaming platform, let’s wait and see how many more milestones does this sector cross!