WAC#1
WAC#1
WAC#1
Contents
1. Netflix in India: The Way Ahead Case Study
Analysis…………………................3
1.1 Introduction……...………………………………………………...……...…...………………...3
1.2 Netflix In India......………………………………………………...……...…...………………...3
3.4 Threats…………………………………………………………………………………………..5
Executive Summary
Netflix, Inc. (Netflix), is the world’s leading provider of subscription video on demand (SVoD), including
movies and television (TV) series, Netflix has aggressively expanding their services into new markets and
the company has entered into more than 190 countries with more than 75 million subscribers. The company
launched its Indian platform on January 6, 2016. Due to its huge population, India represented a lucrative
market. Furthermore, the younger generation in India had dynamic consumption patterns that were
comparable to those of Western consumers and internet usage among the young generation and high
propensity of smart phones usage among the population giving Netflix reasons to invest in the country.
This case focuses on the business model adopted by Netflix for its Indian consumers, taking into account the
vast diversity in terms of language, culture, and socioeconomic conditions in the market, as well as other
hurdles like competitors, censorship, and a lack of infrastructure. Even though Netflix has not the first
mover in the Indian market and many of its competitors are already doing extremely well. It faces the great
competition from already developed players like Eros and Hot star on top along with the competition from
the local cable providers. In addition to this, the internet speed and the availability of the contents is also a
constraint for the Netflix, since the content offered by the Hot-Star and EROS is more culturally inter active
and bounding than the Netflix.
Throughout this analysis, the expansion of Netflix into India will be evaluated. There will be a focus on the
entertainment industry and those providing SVoD within it. Besides, it also identifies the significant areas of
strength, weakness, opportunities and the threats of Netflix’s (India). This case analysis will also indicate the
major issues that Netflix has facing in India. The analysis will also showcase the PEST analysis and Porters
Five Forces for Netflix in India.
2
NETFLIX
The history of Netflix traces back to 1997 when it was founded in California by Reed Hastings and Marc
Randolph. In this context, it is worth mentioning that the idea of establishing the company
providing video-on-demand services for subscribers came to Reed Hastings after he was obliged to
pay a fine for keeping the rented movie after the deadline of return.
Subsequently, at first time, Netflix was nothing more than an online counterpart of the pay-per-
rent video outlets prevalent among Americans in the nineteenth. Eventually, within the short period,
Netflix has become the global leader in the on-demand online video market providing its service
to more than eighty million people living in one hundred ninety countries around the globe.
Nowadays, the business operations of Netflix are to be divided into three major sections. The first one
refers to the DVD rental service, the second one implies providing the video-on-demand streaming
service, and the third one refers to the company’s own production of the TV shows.
Netflix introduced itself in India in 2016 in order to cater its huge population. The aim of the company was
to offer SvoD service (Subscription Video on Demand). In India Netflix is facing much competition from
the existing strong players such as EROS Now, Hot Stars, HOOQ, Spuul, Tv Apps, Google Movies and
Cable providers. On the hand, due to growth and technology company possess higher opportunity with
diversified cultures, which would help the company to grow further.
2
NETFLIX
Netflix offers different version in India, the one offered in the United states. They also customized the
Netflix into Indian version, by the production of its first original series in India (Sacred Games). Netflix is
also planning to expand their portfolio by providing content in Indian regional languages. Netflix also
offered a one-month free trail for the first-time users.
Netflix had not achieved the desired target of subscribers after six months in India but still Netflix is still
positive about its future in India.
Though the number of smart phone users are increasing, the availability of fast internet is an issue for
the company. It is due to the unlimited broad band package that mirage the speed available to each
individual and hence creates the bad impact on the overall business of company.
The local TV content is being watched on a wide scale; hence the company faces the issues in
converting the target population to switch to Netflix VOD model when the cable net is cheap in the
market.
The company is dependent on the local content producers to offer the content to Netflix which in the
presence of Hot star and EROS is difficult to acquire since they have strong market hold.
There is a clear misalignment of the content that Netflix provides with the choices or preferences that
the Indian audience have for entertainment purpose.
Lastly, the censorship board is challenge for the company, since the business model and objective of
Netflix supports the freedom to watch and what to watch, it resists the censor board policies while
creating content. Such resistance create hindrance in developing a full fledge strategy to cater the
market effectively.
2
NETFLIX