Netflix, present in more than 190 countries and with over 8.1 crore subscribers, decided to set foot in India, where a fifth of 130 crore people are online, in 2016. This was the perfect opportunity for Netflix to tap into a huge market. But there are challenges ahead that the company’s management needs to tackle before it can reach its peak. Here are some adaptive strategies we recommend:
Changes in the pricing model
Netflix’s average revenue per user (ARPU) is $25.29 (roughly ₹1,685) in the US and $21.59 (roughly ₹1,440) abroad. In India, where a movie can cost as little as ₹29 (44 cents) and monthly subscriptions are worth ₹200, Netflix should devise a different subscription model for our market.
Viewers from Tier-1 and Tier-2 cities would love to watch more ‘desi content’. . Such subscribers could be charged differentially, with the basic pack being kept free and standard and premium packages costing, say, ₹300 and ₹500.
For this, Netflix could:
- Tie up with famous Indian TV shows like TVF Qtiyapa and Permanent Roommates as their exclusive distributor instead of allowing them to air episodes on YouTube for free.
- Livestream events such as IPL and EPL for premium subscribers.
- Stream live performances, such as comedy shows and Coke Studio, exclusively on Netflix.
- Make regional content available for standard and premium segments.
- Make it clear that there are multiple video quality options, ranging from 240p to 1080p, for continuous streaming.
- Allow debit card/net banking as modes of payment.
- Provide Netflix wallet facility and discounts for regular subscribers through it.
- Have focused discount offerings for loyal consumers by integrating with apps like RedBus and Bookmyshow.
- Allow people to sign in using Facebook or Google.
Although there are numerous obstacles for Netflix in the Indian market, we believe that by using adaptive strategies, it should be able to penetrate the market and increase the customer base in the short run. It could make a start by targeting focussed, but affordable, offerings to the urban population in the key metros.
(The authors are first-year PGP students at IIM Kozhikode.)