Netflix In India-the Way Ahead

CASE PRESENTATION GROUP 2 – AKANKSHA JAISWAL(19XPGDM02)| POOJA BORAH (19XPGDM12)

NETFLIX IN INDIA : THE WAY AHEAD

Timeline of Netflix : http://uxtimeline.com/netflix.html

A different start….. Inputs from our very own Kanchan Debnath, who is an avid user of OTT services: Q : U have hotstar ? A: yes Q: Paid version ? Which one do u prefer ? Hotstar or Netflix? And why? A : I prefer Hotstar for sports, Series and movies for Netflix . In regional language I like Amazon Prime, they have better collection. If I want to watch live test match,or live tennis then I can do it in Hotstar. Netflix do not provide that service. Netflix do not have any live action kinda thing. Netflix has Genres like Indian, US, British, European, Asian, Family, etc.

Vision and Mission statement Mission : Netflix Inc.’s corporate mission is “To entertain the world.” impartsEntertainment Worldwide scale Vision : Netflix Inc.’s corporate vision is “To continue being one of the leading firms of the internet entertainment era.” impartsContinuing leadership Internet Entertainment -Netflix’s mission statement and vision statement push for greater business performance in the global entertainment market. However, threats and strategic challenges against international business growth are due to strong competition involving Amazon, Walmart, Apple, Google, and Disney, as well as other firms that distribute entertainment content through media like DVDs.

-Still, Netflix Inc. focuses on growing its multinational operations as a strategic management implication of its corporate mission statement and corresponding corporate vision statement, ensuring the improvement and strengthening of the business despite the forces of competitors. Source : https://www.rancord.org/netflix-corporate-vision-statement-mission-statement-strategicanalysis#targetText=Netflix%20Inc.'s%20corporate%20mission,%E2%80%9CTo%20entertain%20the%20world.%E2%80%9D&targetText=Similar%20to%20the%20corporate%20vision,about%20the%20media%20they%20access.

CASE STUDY DESCRIPTION Netflix, Inc. (Netflix), the world's leading provider of subscription video on demand (SVoD), launched its Indian platform on January 6, 2016. Due to its huge population, India represented a lucrative market. Furthermore, the younger generation in India had dynamic consumption patterns that were comparable to those of Western consumers, giving Netflix another reason to invest in the country. Even though Netflix was a formidable player globally, it was not the first mover in the Indian market and many of its competitors were already doing extremely well. Source : https://www.academia.edu/8917945/NETFLIX_A_COMPANY_ANALYSIS

1) How should Netflix analyze differences or distances between India and its other markets while crafting strategies for the Indian market and consumer? (CAGE model) : Cultural Attractions, Administrative, Geographic, Economic -1

CULTURAL

• A major cultural difference between the United States and Asia’s country is patience. • Asians tend to be restrained and reserved in most situations, they will occasionally show flashes of extreme emotion.

• Follows Indian government laws/policies by declaring the content (censored/non censored) ADMINISTRATIVE

1) How should Netflix analyze differences or distances between India and its other markets while crafting strategies for the Indian market and consumer? (CAGE model) : Cultural Attractions, Administrative, Geographic, Economic-2

GEOGRAPHIC

ECONOMIC

• Netflix has 58 distribution centers (worldwide), dispersed in such a way that the company can deliver titles to over 97 percent of its subscribers in about one business day (Netflix Corporate Fact Sheet:2010) Vs 1 in India (BKC –Mumbai) • Caters to different time zones in US Vs same time zone (India)

• Differences in consumer incomes • The Wall Street Journal, citing an IHS Markit expert, reports that only 3.0% of India’s 4G smartphone users have digital video subscriptions. In the US, average lunch costs are $10 and Netflix charges $7.99/month. In India, Netflix launched at ₹500/month, which is almost the same as that of US prices. Per capita income in the US is 17 times that of India. Indian per capita Income is as low as ₹1 lakh even in Urban areas. Average Pay-TV options are start at ₹100/month. • Penetration of Smart TV sets is very low in India. On top of that, Hotstar charges ₹200/month for latest movies and most watched TV content along with 45 HBO originals shows including “Game of Thrones”

Source : http://www.arresearchpublication.com/images/shortpdf/1490210887_P711-726.pdf

2) Analyze the macro-environmental factors affecting Netflix in India to ascertain the best strategies for the company. (PESTEL analysis)

LEGAL & POLITICAL

ECONOMICAL

-Piracy Laws

-Increase in Yd ( Indians spending more on

-Content Licenses and copyrights

entertainment) -Subscription fee like cable

TECHNOLOGICAL SOCIAL -Suitable for personalized viewing -Web series gaining popularity -Watching TV is a social phenomenon

-Increasing SVOD demand -Requires High internet speed -Apps are accessible/available everywhere but smart TVs aren’t

3) Analyze the level of competitiveness in the SVoD industry in India using Porter’s five forces model Threats of Potential New entrants : (Moderate)  Changing technology up gradation.  Content availability and convenience.

Bargaining power of Suppliers : (High)  License to distribute the content  Netflix competing with the traditional media distributors.

Bargaining power of Buyers :(High)  Revenue depends upon the subscribers.  Buyers can switch to other subscribers.

3) Analyze the level of competitiveness in the SVoD industry in India using Porter’s five forces model

Threat of substitutes: (High)  Traditional media constitute threat to Netflix.  Constitute threat from various other online streaming SVoD.

Competitor Rivalry: (High)  Various competitors in the market including traditional media.

 Acquisition by competitors.

4) Conduct an evaluation of the business model adopted by Netflix in the Indian market. Use SWOT analysis also. STRENGTH:     

Competitive Pricing. Netflix provides original content. Large numbers of diverse shows. Brand name. Adaptability.

WEAKNESS:  Lack of updated movie selection.  Cost of original content.

OPPORTUNITIES:  Offer alternative subscription to less frequent movie renters.  Promotions and advertisements.  Video game market.  Live sports streaming.

THREATS:  Competitive pressures.  Piracy issues.

GOOGLE TRENDS FINDINGS

Comparison of Indian public interest over a period of 5 years over Hotstar versus Netflix Red : Netflix Blue : Hotstar

5) Evaluate and assess the resources and capabilities of Netflix using the VRIO framework Value:

Rarity:

Values customer base by offering a large amount of great movies and TV for a reasonable monthly rate.

Rarity by creating amazing original content like House of Cards , Narcos , Sacred games etc.

Imitability: Obvious as their competition is having a tough time trying to imitate

Organization: Quite organized and very capable of exploiting its resources, capabilities, and competitive advantage to its fullest potential.

6) What strategies should Netflix follow in order to succeed in the Indian market? Live streaming of sports. Additional feature to purchase specific categories of videos. Bundling broadband with Netflix subscription. Innovation in Pricing. Local language program streaming. Need to concentrate in piracy issues.

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