Netflix, one of the major players in video streaming across the world, has announced strategic partnerships in India with Airtel, Videocon and Vodafone. The company will also open an office in Mumbai soon. Both Airtel and Videocon d2h will integrate the Netflix app into their direct-to-home television services, thus ensuring a wider audience for the streaming service.
With Vodafone, Netflix will enable carrier billing, allowing payment integration straight via the monthly bills for subscribers on the network. Currently one of the issues for Netflix is that signing up for the service requires a credit/debit card; carrier billing would mean another form of payment for the service, which could expand user base. Airtel has not yet confirmed how this partnership will play out on its DTH box.
Netflix CEO Reed Hastings, who is on his first visit to India, said the company’s aim is to focus on premium content, and it will add more content for the country. While Reed didn’t give any specific numbers on India users, he said within Asia, India is the one market where they have seen the strongest growth. Netflix is not available in China. The service has 94 million subscribers, out of which 40 million are outside of the US.
With India being a mobile driven market, Reed also spoke about how the entry of Jio has changed the market and video streaming business. “Viewing of our shows has gone up on the Jio network, and in fact on all of the networks. So we’re launching partnerships today with Airtel, Videocon, Vodafone and we’ll have more of these around the world,” said Hastings in an interaction with members of the Indian media.
“In terms of our content selection, we started a year ago with our international originals, Narcos, Stranger Things, Orange is the New Black, and they’ve been very popular in India. But we are expanding, and adding local content. Our titles have doubled from a year ago. We’re going to double that in the coming year,” said the Netflix co-founder. The service will also have exclusive rights for Shah Rukh Khan’s upcoming films for the next three years.
But the Netflix CEO admitted the Indian market is not just one player’s game. “There’s a great battle with Hotstar, YouTube, and Amazon and many others, all competing for a consumer’s time. We are one of the choices, but what’s unique about Netflix is that we’ve got an international titles combined with great local talent,” said Hastings.
For Netflix, the focus will be on shows with high-end shows with great production values, and it views itself as a player offering premium quality content. However, unlike say Hotstar, which also streams sports events in India, Netflix won’t be acquiring these rights. Instead it will look at more original content, which will work not just in India, but across the world. The eventual aim is to create a great Indian franchise just like Narcos.
But content is not the only aspect where Netflix wants to change the game. The company wants to be the first to eliminate buffer in video streaming, and says it has been improving streaming on mobile networks.
“We’ve been very aggressive at improving mobile technology for Netflix. So in Mobile World Congress last week, we were announcing new video formats. So streaming to a mobile phone, it took 1.5MB, then over the years, we’ve improved that to 1MB, to half an MB. We’re now down to 200KB on mobile, and we are working on 100KB for mobile. But currently at 200KB, it means you get a great picture on a 4 or 5-inch screen, and you can watch twenty-five hours in one gigabyte of data. So it doesn’t eat up your whole data plan,” explained the Netflix CEO.
Netflix also offers ISPs open-connect deployments in India, and plans to increase these gradually. “The open-connect is the server side of Netflix where ISPs don’t want to stream a movie from California, because then they have to pay for the international connection. Instead we provide them with these free servers, or an inter-connect location from where they can get the data,” said Hastings. However not all ISP players in India have access to these yet.
The Netflix co-founder sees the Internet television business exploding in the next few years, and it wants to be the major player when that happens.
“We’ve pioneered a kind of television that looks like movies, that has a rich story line, that’s well shot. We’re really trying to raise the level of budget and production in Internet television. You’ll see with ‘Sacred Games’ that it looks like a beautiful movie,” said the Netflix CEO.
There’s also an intense bidding war for content among players like Netflix, Amazon Prime, Hotstar and others. Netflix, which remains a priced on the higher side in India, said it will focus on improving the content for the next couple of years, rather than just pricing. “Eventually as the internet matures, and more people come online, then we’ll look at other things,” said the Netflix CEO.
On the crackdown VPN, which has put an end to people in India accessing the US Netflix library, Hastings admitted this will continue, and it is something they can’t allow, because of the licensing terms which are designated by region. “We can’t encourage or permit people use VPN across the border. We understand it is frustrating for people, but we are trying to solve some of these issues with our own global content. When we control the source, we can make it available globally,” said Hastings.