homeentertainment NewsReed Hastings’ 'frustration' turned into a 'flywheel of signups' for Netflix in just three months – here’s why

Reed Hastings’ 'frustration' turned into a 'flywheel of signups' for Netflix in just three months – here’s why

While Netflix blamed Russia-Ukraine war, password sharing, unaffordable broadband internet service and smart televisions for the quarter-over-quarter erosion in global subscription, the Asia-Pacific (APAC) region, which includes India, was the outlier. Here's why

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By Shilpa Ranipeta  Apr 23, 2022 8:05:06 AM IST (Published)

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Reed Hastings’ 'frustration' turned into a 'flywheel of signups' for Netflix in just three months – here’s why
Just three months ago, Netflix founder and Chief Executive Officer, Reed Hastings, had called India a "frustrating" market. But now, at the end of March, India was one of the few markets where the streaming giant added new subscribers, while losing a net of 200,000 people from its platform world over.

So, how did India go from being "frustrating" to a growing market for Netflix in just three months? It wasn’t because of Mai, starring Sakshi Tanwar, that has become quite the rage. Neither was it because of Dasvi, featuring Abhishek Bachchan. Nor was it due to the popularity of ‘Night Drive’.
In India, what got more people to download Netflix were the two magic words: price cut. In December, Netflix slashed its mobile only plan to Rs 149 from Rs 199, the basic plan to Rs 199 from Rs 500, and so on – essentially, dropping prices by up to 60 percent. However, Karan Taurani, Senior Vice President-Research Analyst at Elara Capital, warned that this could just be a one-time benefit.
Netflix price slash
Netflix planEarlier price (in Rs)Slashed price (in Rs)Device limit
Mobile-only1991491
Basic5001991
Standard6494992
Premium7996494
To be clear, India was not the only growing market. A net of 1.09 million people signed up for Netflix across the Asia-Pacific region, thanks to uber popular series, Squid Game.
India is a price sensitive, value-centric market with over 60 OTT players across categories, genres, and languages.
OTT Prices in India
OTTLowest-priced planHighest priced plan
NetflixRs 149/month (Mobile-only)Rs 649/month
Disney+ HotstarRs 49/month (Mobile-only)Rs 1,499/year
Amazon Prime VideoRs 179/monthRs 1,499/year
Netflix reaches only 2-4 percent of all OTT users in India, according to data from market research firm Kantar but those who do subscribe to Netflix spend a lot more time on the platform than users watching peer streaming services. This would provide an argument in favour of advertisements, which Netflix and its fans would hate.
Subscription video on demand (SVOD) services will have to work harder to win new subscribers, Mihir Shah, Vice President of research agency Media Partners Asia, says. However, the ad-based video on demand (AVOD) market size in India is around $1.2 billion, of which 60 percent comes from aggregators like YouTube, MX Player and sports based OTTs.
Can Netflix find more takers without bringing in ads?
Since its entry into India, experts have pointed out that Netflix has had a perception problem of being viewed as a platform for English and Hindi content mainly focused for tier 1 cities. However, of the overall target market of about 60 crore smartphone users in India, more than 30 crore come from tier 2, 3 cities and beyond and that is one market the platform will need to crack. This is where regional content will be a key driver.
“Netflix has to offer more variety, focus on regional content. South is a large market which they need to tap,” Taurani adds.
Adding more varied content such as sports – which is the largest driver for Hotstar’s subscriber base -- could be another area to tap. This, especially at a time when OTT viewership has been on the decline globally as economies open up, said Taurani.
Is this what Hastings meant when he said the following? “We're really excited about a bunch of titles that were coming down and thought there was an opportunity to broaden the audience that got to see those titles and so we've seen that effect definitely take hold where we have an additional bump in subscribers that will now get to see that content,” Hastings said.
Let’s chill and watch Netflix play its cards.

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