Research by: Dominique Turpin, Shalini Joshi, Shamik Debnath, Siddhant Puri and Sandeep Puri
Netflix’s July 24, 2019, launch of the ₹1991 mobile-only monthly plan in India was intended to give a personalized experience to smartphone users in the country and at the same time compete with players such as Disney’s Hotstar (Hotstar) and Amazon Prime Video.2 Netflix had a mere 11 million subscribers compared with Hotstar’s 300 million and Amazon Prime Video’s 13 million.3 Surveys suggesting that 70% of consumers preferred their mobile devices to watch content compared with 26% who preferred TV, laptops, PCs, etc. were a driving factor in the decision. Besides, the “over-the-top”4 (OTT subscriptions were moving from free to paid, and around 70% were paid subscribers. Although acquiring paid customers was a challenge for video and music streaming apps and many had lured customers with initial free services and tried to retain them with fresh original content and competitive pricing, recent research suggested that the market was poised for more premium services at economical prices.5
As part of its global expansion plans, original Indian content and affordable subscription rates were two things Netflix planned to offer to increase its subscriber count to about 100 million subscribers in India. But with endless possibilities in a 450-million-Internet-user market such as India, Netflix had to devise strategies to capitalize on these. Considering India’s OTT space was crowded and various platforms in the Indian market were already offering annual subscription plans at lower prices than Netflix, the company needed to weigh in on several options to achieve its goal and subsequently build on those options to fulfill its business goals. It had to decide if it should continue to generate exclusive original Indian content with premium pricing or start offering a wider selection of movies, including different regional languages at affordable pricing. It had to make sure that providing ample original content was enough to charge a premium. And as its competitors came up with different strategies to capture, retain and push established customers to premium upgrades with affordable subscriptions to stay ahead in the race, Netflix had to decide how to leverage its tie-ups and partnerships to increase its subscriptions.
This case is designed for use in a graduate-level marketing program focused on marketing strategies. It examines the challenges Netflix is facing among the 30 OTT platforms in India, one of the fastest-growing economies in the world. It aims to help participants discuss the company’s strategic options, such as original content and pricing strategies, in the price-sensitive Indian market, evaluate the alternatives, devise strategies for strengthening its subscriber base, and how to analyze the marketing strategies of a market leader.
The key learning objectives are:
- To analyze the structure and technological development of the growing OTT industry in India
- To identify a firm’s competitive advantages in a hypercompetitive market
- To identify customer acquisition strategies for OTT players
- To understand the price-setting approach in relation to the market stage.
Subjects: Market entry, Marketing, Strategic positioning, Strategy
Industry: Arts, entertainment & sports
Geography: Asia; India
To cite this case: Turpin, D., Joshi, S., Debnath, S., Puri, S., & Puri, S. (2020). Netflix: Hustling for more in India’s crowded OTT space. IMD ID-7-2203. Lausanne, Switzerland: IMD.