Users realized that the Netflix library in India was woefully small compared to what was available in America, and their localized Indian content was rather abysmal. Nor did it offer a sufficiently rich Western catalogue to compensate. You cannot win this market without speaking its language.īut Netflix didn’t offer that. Similarly, Hollywood and foreign films manage a less than 10 percent share at the box office. According to a recent industry report by KPMG India, Western programming only commands a minuscule half a percent share of viewership on Indian television, compared with over 60 percent for domestic entertainment. The key to cracking this far bigger and potentially more lucrative market lies in building out a vast catalog of local content, both original or licensed. They don’t have reliable broadband connections and have much less discretionary income. This is the India that Reliance Jio primarily targets. Despite being far bigger in volume, it’s too early to say how willing they will be to pay for services they’ve yet to feel the need for. In many ways, the ground was set for a company like Netflix to step in and hit it big.Īnd then there’s the other, older India. The Indian government adopted a stricter digital policy that banned many such sites, providing a welcome boost to streaming services. Until a couple years ago, video piracy was rampant and the urban Indian could easily download pretty much any content off easily accessible torrents on the web. The World Bank put India’s per capita income at $1,581, and Indians are known to be price-sensitive. In India, where a movie can cost as little as 29 rupees (44 cents) and monthly subscriptions are as little as 200 rupees ($3), analysts expect ARPUs to be a fraction of what they are elsewhere. Netflix’s average revenue per user (ARPU) in the third quarter was $25.29 in the United States and $21.59 abroad. What India doesn’t have, however, is a culture of spending on video. That will make India’s internet user base more than double the US’s entire population. It is currently home to 460 million internet users, but India’s IT industry body Nasscom and Akamai Technologies estimate that by 2020, the number of internet users in India will exceed 730 million. The government of India is also pushing a host of new initiatives under its Digital India program to help get the entire country online. As a result, Jio users have become regular consumers of data-heavy services such as audio or video streaming that previously were out of reach. To put this in context, India’s biggest telecom player Airtel took 12 years to reach the same number of subscribers. Jio gained more than 50 million subscribers across India in little less than 3 months, a feat unprecedented anywhere in the world. Reliance Jio entered the Indian telecom market in late 2016 with a bang, offering rock-bottom pricing for its data services to all users.

Netflix pricing strategy in india