Netflix and Amazon, two US giants of video streaming, are investing large sums on original content for the Indian market, but industry rivals warn they will find India a very different proposition to the US and other developed markets.
Netflix, which launched in the country in January 2016, is planning to broadcast two new Indian drama series – one focused on cricket and the second about a female homicide detective in New Delhi.
Amazon, meanwhile, has received rave reviews for its Inside Edge drama series, which premiered in June and was based on a fictional T20 cricket team, the Financial Times reported.
However, while both companies seek to engage Indian consumers with home-grown content, some observers expect them to struggle to build a large base of subscribers because of the cost of their services.
Sudanshu Vats, Chief Executive of Viacom18, one of India’s largest TV networks, noted that Netflix’s basic monthly subscription of $8 may represent a big discount compared with traditional TV pricing in the US, but it’s different in India where monthly cable TV charges are typically less than half the cheapest Netflix option.
He said Netflix might attract a maximum of 3m subscribers if it sticks with its policy of having global pricing in India. “That’s still a very small number in the Indian context; it’s scratching the surface. It’s a very good business model but it doesn’t scale.”
Meanwhile, Uday Shankar, Chairman of Star India, which has no fewer than 58 TV channels, predicted that Netflix and Amazon would find it hard to match the volume of local content that Indian producers can offer.
“We at Star create almost 18,000 hours of content every year,” he said. “Clearly that’s not a model that [Amazon and Netflix] can sustain very easily.”
For its part, Star has launched a much cheaper digital platform, called Hotstar, which charges about $3 a month, as well as a free, ad-supported service with more limited content.
Shankar also said that maybe up to 2m Indians are currently willing to pay for online content. “I struggle to think that number could jump to 20m or 30m in the next five years.”