Why hasn't Netflix come to India yet
Film market - stock market is disappointed: Now Netflix is hoping for the Bollywood frenzy
The stock exchange is disappointed: Now Netflix is hoping for the Bollywood frenzy
The US pay broadcaster Netflix disappoints the stock market. Now the company has set its sights on India. It will not be an easy undertaking to conquer Bollywood land.
Investors would not have given an Oscar for it: The latest figures that the online video service Netflix presented on the Monday after the US market closed were a disappointment for the analysts. User growth, revenue and outlook all fell short of expectations. The result: The share fell at times by more than 14 percent.
The streaming service speaks of a “strong, but not an outstanding quarter” and admits to having miscalculated the forecasts. In the US home market, 670,000 new users were added from April to June, according to Netflix, and internationally it was 4.47 million. That's a lot, but analysts and Netflix itself had expected significantly more.
The harsh stock market reaction is a small damper in a success story that Hollywood itself could not have written better. Netflix has doubled the number of users to 130 million in the last three years. The share price has almost doubled since the beginning of the year. In this respect, the price correction of the high-flyer share does not come as a complete surprise. And if Netflix boss Reed Hastings’s script is used, the end of growth is far from in sight.
Phenomena: Binge Watching and Binge Racing
In the English-speaking world, “Binge Watching” even made it to the word of the year 2015. The term can best be translated as “Komaglotzen” or “Series marathon”. Viewers watch several episodes of a television series at a time. The phenomenon came up with streaming services such as Netflix, Amazon Video and Hulu. Binge Racing, on the other hand, means watching an entire season of a series in the shortest possible time. At Netflix, more than 8.4 million members have already watched a season at least once within 24 hours. (mka)
The success story goes back to a television revolution that Hastings and his team founded with the hit series "House of Cards": Films and series can be viewed on Netflix at any time for a monthly fee, without being tied to a television channel. This also enables the repeat function in normal television to a limited extent. In addition, however, you can watch a whole season of a series on Netflix (see box on the right). If the viewer is through with a film or a series, new content is immediately offered to them based on their usage behavior.
Obama, Lettermann & Co.
In order to keep customers in line, Netflix invests like no other in new films and series. Last year it was $ 6.3 billion. According to the company, 8 billion dollars were planned for the current year. The business magazine “Economist” expects 12 to 13 billion and refers, among other things, to estimates by the US bank Goldman Sachs. With the large amount of money, Netflix is increasingly signing well-known directors and actors. These include Spike Lee (“Inside Man”, “Malcom X”) or the Coen brothers (“The Big Lebowski”, “No Country for Old Men”). The company brought Barack and Michelle Obama on board as producers, and talk master David Letterman once invited celebrities like George Clooney for a chat.
In order to decide which films or series should be produced or purchased, Netflix has identified around 2000 groups with the different tastes of their users. In this way, Netflix can also serve smaller niches and does not have to target primarily those target groups that are of interest to their advertising customers, unlike the major TV channels.
Now Netflix wants to expand into new markets like India. Because the US market is considered saturated, South America and Europe are on the way to it. And China is not making it easy for western video services to enter the market. Company boss Hastings recently announced his plans in New Delhi. The next 100 million Netflix customers would be from India, he said, according to the Bloomberg news agency. Today the company has less than a million subscribers in India. When Netflix launched its service in the country in early 2016, the ambitions were significantly smaller. But a lot has changed since then: Internet coverage has been massively expanded. 150 million of the 1.4 billion inhabitants now have broadband internet access.
Nevertheless, it will not be easy for the US company to conquer Bollywood land. There is the price: at 500 to 800 rupees (7 to 8 dollars) per month, Netflix costs twice as much as the Indian competing offers, which primarily broadcast cheap soap operas and sports programs. In addition, most Netflix films and series in India so far are shown in English, although customers prefer Hindi or Tamil. Hastings has now reacted to this. Nowhere else does Netflix currently shoot more self-produced TV series and films than in India, like most recently the prestige production “Sacred Games” about criminal machinations in Mumbai.
But ambitious plans like those in India also cost a lot of money. Netflix has had a cash outflow every quarter since 2014, and debt has grown. At the same time, other companies such as Amazon are also investing large sums of money with their Prime Video offer. The company paid $ 250 million for the rights to a series for "Lord of the Rings" alone. Disney, in turn, is also building its own streaming service and has announced that it will withdraw its films from Netflix. In addition, Disney wants to take over Rupert Murdoch's media holding 21st Century Fox and thus secure further films and series, among other things. Other providers are also in the starting blocks. Netflix is challenged.
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