InvestorQ : Is it true that Netflix is looking at India as a model to address the Asian and other emerging markets in the world?
Lavanya Subramanian made post


Anamika Sodhani answered.
2 months ago

Unlike in many of the Western countries, where Netflix dominates the OTT market, it has been a lot tougher for them in India. It is struggling to keep pace with the likes of Disney Hotstar and Sony Liv making rapid strides. The niche is still missing in the model. IN the last few months, Netflix has lost over 65% of market value and has been one of the key drivers of the stock price of the stock lower. Now Netflix is looking at Asia and India as the laboratory from where it will launch a grand template for emerging markets.

Some facets of the strategy will be unique to India. Netflix is cutting on cash burn, but will also sink top dollars into the production of narrow cast content like local films and serials that are tailor made to the local Indian and Asian markets. Also, the low priced mobile-only membership will continue in Asia, although it will look for more robust revenue models. The idea here is to use the learnings in Asia and replicate across emerging markets. Almost 15% of the 221.6 million subscribers of Netflix globally come from Asia Pacific region.

Customer value or revenue per customer is a challenge in Asia. Asia has among its lowest-value customers. Average revenue per membership fell 5% to $9.21 a month while the average revenue per membership was up 5% in the US and Canada at $14.91 per month. Of course, there is the challenge from competition. Globally, Amazon and Walt Disney have given Netflix a run for their money. Local companies like VIU in Southeast Asia and Sony Liv in India are also cases in point.

For the Indian market the subscriber size is not commensurate with the efforts. Netflix has about 55 lakh subscribers in India and it is targeting 85 lakhs shortly. In India, even market leader Disney + Hotstar, has seen a drain in the number of subscribers. Other options like multiple payment options and , so Netflix will not have it easy. One thing that Netflix is trying is to offer a much wider array of payment choices in Asia compared to competitors, since that can be a differentiating factor here. Advertisement revenues is also part of the plan for the Asia region.