In January 2016, Netflix Inc’s co-founder and chief executive, Reed Hastings, announced that

Netflix would be available across 130 countries in Asia, West Asia and Europe. This was part of
Netflix’s expansion strategy to enter international markets and launch streaming services in
more than 200 countries by 2017. While India was a key market for Netflix, it was very different
from the company’s stronghold, the US, and posed several challenges for Netflix.
The online video content provider, which serves approximately 81 million members in 190
countries, including more than 46 million in the US, was founded in 1997 by Marc Randolph and
Hastings, and is headquartered in Los Gatos, California. It is an internet streaming network that
streams TV shows and movies on different internet connected screens, such as TVs,
computers, tablets and mobile devices.
In 1999, Netflix started off by introducing a DVD subscription service, providing unlimited rentals
on a monthly subscription basis. By the end of 2007, Netflix was shipping around 1.6 million
DVDs every day. That year, the company also launched its video streaming services in the US
and, in 2010, began the global expansion of its business. Netflix posted revenue of $6.78 billion
for the year ended 2015.
TV viewing transformed
Netflix had grown significantly in the US and also extended its presence in Europe and some
other countries. In the US, the trend for date nights was changing from the typical movie and
dinner to ‘Netflix and chill’. The rise of Netflix streaming had brought about dramatic changes in
TV-viewing habits, especially those of Americans.
According to a survey, more than 60 per cent of Americans admitted to binge-watching shows
on Netflix. Netflix’s political drama House of Cards has been a popular topic for discussion on
social media. Netflix topped the share of downstream internet traffic in North America with a
market share of around 35 per cent (March 2016). It had added 17 million subscribers globally
between 2012 and 2015.
In India, the majority of the population was not familiar with online video streaming. Indian
viewers got video content through their cable operators and DTH (Direct to Home) service
providers. However, the scenario was changing with availability of increased internet bandwidth.
With 462 million internet users as of July 2016, India was the largest new market for Netflix .
Most Indian users access the net via smartphones, which helps significantly cut down on the
buffering time. In 2014, Indian internet users consumed 41 billion minutes of videos every
month. Overall, 46 per cent of all internet usage in India came from watching videos.

Faster Internet
With its mobile subscriber base crossing one billion in October 2015, India became the second
country after China to reach that milestone. The younger generation has been growing more
accustomed to watching movies and TV shows on smartphones. By the end of 2016, it was
estimated that 60 per cent of internet users in India were accessing the Web on mobile phones.
However, the bandwidth speed offered by internet service providers proved an obstacle for
Netflix. In HD quality, Netflix would consume around 3GB of data per hour and a minimum of 8
mbps would be required to stream HD quality videos without buffering. Average broadband
speeds were 2 mbps and most Indian internet service providers provided unlimited data.
The so-called ‘unlimited’ wireless data plans were offered with post Fair Usage Policy speeds of
less than 100 kbps, which would not be enough to load even thumbnails of a movie. A 2 mbps
connection in India was priced between Rs1,500- 2,000 a month. The price came down if the
user wanted to restrict the data limit. Often, even after paying that amount, the user was not
able to get consistent speeds, which could vary from 5 mbps to 50 kbps.
A question of content
Analysts felt it would not be a cakewalk for Netflix to succeed in India with its content. Netflix
India has limited streaming content available and its collection of Indian films and TV shows is
almost insignificant, though it is largely local content that can attract most of the country’s non-
metro viewers. Additionally, it offers only around 7 per cent of its US collection. With competitors
such as YouTube, Eros Now, Sony LIV, HotStar and HOOQ streaming local content, Netflix has
a task on its hands to get the rights for more such content.
Apart from this, the most pirated TV shows of 2015, Game of Thrones (GoT), The Walking
Dead and The Big Bang Theory, popular among the Indian audience, are not available on
Netflix India. Analysts, however, say Netflix can penetrate Indian markets with its Hollywood
hits, which it streams ad-free. The company announced in June 2016 that it was going to
produce a new Netflix original series based on the novel Sacred Games written by Vikram
Chandra.
Another major challenge for Netflix in India is fixing the subscription price. Unlike in the US,
Indians prefer not to pay to view videos. Many Indian players offer some content free, whereas
Netflix is a subscription-based offering. The pricing in India is more or less the same as in the
US, where the subscription costs $9.99 (Rs660) a month. For India, Netflix has three different
plans. The basic plan is Rs500 per month for Standard Definition (SD) resolution, the standard
plan is Rs650 per month for HD streaming, and there is a premium plan of Rs800 per month for
Ultra HD (4K) screening

Analysts say Netflix could be a costly option for many viewers, especially in the rural areas,
compared to its competitors’ rates. Apart from this, Netflix requires credit card details for the
one-month, free-trial period. However, credit card frauds being common in India, people are
suspicious and wary of giving out information online. It is felt that this might discourage many
from trying the service. Despite this, many among the urban and educated audience have
subscribed to Netflix in India, mainly due to the popularity of its original series productions such
as Narcos and Jessica Jones.
Competition, censorship
The free Torrent downloads pose a threat to Netflix in India. Some of the torrent sites are
adopting a new technology similar to that of Netflix. File-sharing sites such as The Pirate Bay
offer free access to a large number of movies and TV shows that can be downloaded illegally.
Some sites also stream videos directly to a web browser. With low internet speeds, people
might prefer downloading to streaming. Many Indian viewers would wonder why they have to
pay for both data and streaming, when they could pay for data alone and download files without
a limit. However, due to the restraints enforced by the Indian government, many torrent and
video streaming websites remain banned.
Censorship could also be a setback for Netflix in India. House of Cards and other programmes
available on Netflix could face problems due to the use of strong words and racy scenes. In
India, even the James Bond film Spectre was subjected to cuts for its prolonged kissing scene.
Another problem for Netflix is that the majority of its content is in English, though it does offer
subtitles for most of its content.
Despite these challenges, Netflix plans to enhance its subscriber base in India by producing
more local content. However, the Netflix India team has its work cut out for it as its launch has
spurred Indian cable networks, video on demand (VoD) and DTH players into thinking bigger,
with some of them planning to go beyond regular television programmes.