23 February 2017 13:00:11 IST

Content, pricing issues are key obstacles

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A wider range of offerings and pricing on a par with industry players could make a difference for Netflix

The case describes the different services offered by Netflix and the hurdles it faces in the Indian market. These obstacles are chiefly related to content, price, intense competition, the Internet and censorship

 

Segmentation

India is a huge potential market for Netflix. And given how hugely popular American and British TV shows and movies are with the millennials, they would be the right segment to focus on.

Content

 

~ Content can be a differentiating factor between Netflix and its competitors.

~ As stated, only 7 per cent of US collection is available on Netflix India, which should try and get more US content which is popular among the younger generation

~ Netflix can associate with major gaming production houses like EA Sports to offer games online in value-packed combos on monthly basis

~ It should produce more local shows which can be viewed only on Netflix

~ Many online popular channels in India, such as TVF and other content providers which have lakhs of subscribers online can be roped in to stream on Netflix. This will help Netflix tap into an existing consumer base

~ Sports and movie rights can be targeted as the serials available on Indian TV can be viewed only on their channels’ respective online platform; for instance, Colors shows on Colors digital network, and so on

~ Vintage cartoons or popular animation shows can be streamed

~ Local content can be offered

 

Price

— Asking for credit card details before a free trial discourages a lot of customers from using the free trial. Instead, an e-mail ID and mobile number validation can be sought as the only input from consumers

— As Indian consumers are very price-sensitive Netflix India should not charge more than its competitors.

— Establishing a strong consumer base in the initial years should be the prime focus

— Once the consumer base is established, consumers can be categorised (as shown in the customer pyramid) depending on the amount of data consumed (platinum represents consumers with highest consumption).

 

— The data consumed should be tracked and can be used to offer customised packages using tiered pricing

— The packages should always be offered at a discount. For instance, a package priced at ₹349 can be offered at a 50 per cent discount

— Based on the response of customers, schemes can be modified

 

Competition

The immediate competitors for Netflix would be: Hotstar, SonyLiv, entertainment websites, online channels and pirated content.

To overcome competition, Netflix can do the following:

~ Make available anecdotes and other interesting trivia along with movies and TV shows

~ In between the shows, a few interesting questions can be asked and the winner can be given goodies, such as an extended free subscription

~ Better, more wide-ranging content can help beat the competition

~ Invite suggestions from subscribers on what content they might like on Netflix

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Internet

Low-speed internet is an issue in India but with initiatives such as Digital India, easier access and faster connectivity may not be a serious problem in the coming years.

As of now, it is a level playing field for all Internet-based players. With the penetration of Reliance Jio, however, data prices have been slashed and there is more data on offer at the same price

Censorship

As the target audience is older than 18 years, censorship should not be much of an issue

Conclusion

Though on almost every issue, players in this space operate on a level playing field, content and pricing could be game-changers. Content will be the differentiating factor, both to beat the competition and in charging a premium. Developing and acquiring content that is interesting to its target segments should be the primary concern for Netflix. And pricing should be on a par with other industry players.

(The winners are first-year PGDM students at Indian Institute of Management, Ranchi.)