# Netflix’s Indian ambitions face hurdle of cheaper services (HT Tech) > Netflix may not be able to achieve its goal of 100 million subscribers in India this year. # Netflix’s Indian ambitions face hurdle of cheaper services ## Netflix may not be able to achieve its goal of 100 million subscribers in India this year. Jul 19 2019, 12:58 IST ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook.png) ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook-hover.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Share.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Shareclicked.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp-hover.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter-hover.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook-hover.png) ![Bookmark](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmark.png) ![Bookmarked](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmarked.png) ![Netflix reported fall in shares last quarter.](https://images.hindustantimes.com/tech/rf/image_size_960x540/HT/p2/2019/07/19/Pictures/hollywood-photo-company-netflix-angeles-office-seen_83b4e10c-a9f4-11e9-a5e4-792fe397282f.jpg) Netflix reported fall in shares last quarter. (REUTERS) ![Author Photo](https://images.hindustantimes.com/tech/static/revamp/images/png/HTTech-new-circle-logo.png) ### By P R SANJAI, LUCAS SHAW, SHERYL TIAN TONG LEE Netflix Inc., whose shares plunged after it reported the worst drop in US users since 2011, is looking for new subscriber growth in India, a rapidly expanding streaming market. Trouble is, so are a raft of ambitious local players with cut-rate programming packages. Already wrestling with global giants such as Walt Disney Co. and Amazon.com Inc., Netflix now also contends with broadcasters and Bollywood powerhouses allied with billionaire-backed wireless carriers, who are luring users with free offers or as low as 40 cents a month. That tactic has put them directly in the India growth path of the world's largest paid online streaming service. The intense competition could derail Chief Executive Officer Reed Hastings's goal of 100 million customers in India -- almost 25 times Netflix's estimated subscriber base there this year. The world's second-most populous country is a priority for the streaming service, which is effectively blocked in China. The second-quarter loss of 130,000 users in the U.S., reported Wednesday, makes winning in India all the more pressing. Also read click here. Netflix shares fell 10%, the most in three years, to close at $325.21 in New York trading Thursday. That knocked about $16.3 billion off its market value. With a growing number of smartphones and a surge in the use of broadband, India has become a battleground for streaming services. Cisco Systems Inc. has estimated the country will have 829 million smartphone users by 2022, from a projected half a billion this year. "We are seeing a nice, steady increase in engagement with Indian viewers that we think we can build on," Netflix Chief Content Officer Ted Sarandos said on a call with analysts Wednesday. "Growth in that country is a marathon. We're in it for the long haul." India's video-on-demand market could grow to $5 billion by 2023 from $500 million last year, estimates researcher Boston Consulting Group. Paying subscribers will probably rise to as many as 50 million, while users of advertising-supported video-on-demand will reach 600 million, BCG predicts. Netflix has amassed more than 150 million subscribers worldwide, giving it the largest paid customer base. The U.S., Brazil and Canada are three of its largest markets, while Australia is the company's biggest success story in the Asia-Pacific region. India differs from most of these markets, however, in its population's sensitivity to price. The Los Gatos, California-based firm has responded to competition in India by offering a mobile-only service at less than half the typical subscription price, and by raising spending on local content faster than in any other market. While it's still lagging behind Amazon Prime Video and Disney's Hotstar, the price cuts are helping it outpace the growth of its biggest rivals, while raising questions about sustainability and margins. Hotstar built its base by streaming cricket matches that are wildly popular in the former British colony. ALSO READ: Netflix's cheaper mobile-only subscription plans to launch in India soon Netflix will probably almost triple subscribers in India this year to 4.1 million, within striking distance of Amazon Prime's 4.4 million, according to estimates by researcher IHS Markit. That's faster than Amazon or Hotstar Premium, two of Netflix's biggest competitors. Some other estimates put Netflix's base in India at between 1 million and 2 million. The company doesn't provide data for individual markets. "Netflix is in a land grab to capture as many subscribers as possible, whatever the price," said Michael Pachter, a managing director at Wedbush Securities Inc. "The less they charge, the more cash they are likely to burn." The company spooked investors Wednesday with a report that it lost subscribers in the U.S. and signed up only 2.8 million internationally in the three months ended June, roughly half its own prediction. It also reported its 20th quarter of negative free cash flow as it spends on adding content and replacing series and films being pulled from its platforms by competitors like Disney. While Netflix is speeding up its investment, Indian rivals including Zee Entertainment Enterprises Ltd. and Balaji Telefilms Ltd. are betting on bundling their content with mobile phone services. The TV network and Bollywood producer are allying with billionaire Mukesh Ambani's Jio wireless service and Bharti Airtel Ltd., two of the country's three biggest carriers, to offer decades of content to subscribers. Free Access Zee, parent of the country's largest private broadcast network, offers movies, exclusive TV content and more than 90 live channels on its ZEE5 platform with content across 12 languages for as little as 70 cents a month. Partial access to the platform is free to subscribers of mobile phone carrier Bharti Airtel, controlled by billionaire Sunil Mittal. Users of Airtel's plans priced at $7.25-a-month or more get full access to ZEE5 free. Ambani's Reliance Jio Infocomm Ltd., which elbowed its way into the country's mobile phone business three years ago with free calling and low-priced data services, has jumped into film and TV streaming, including a tie-up with Balaji Telefilms. Sunil Lulla, chief executive officer of Balaji Telefilms, said the company's service ALTBalaji is focused on producing exclusive content in Hindi, the country's most-used language. Other local entrants in India's OTT, or "over-the-top," market include Disney's Hulu, Sony Corp.'s Sony LIV, Network 18 Media & Investments Ltd.'s Voot and Bollywood filmmaker Eros International Plc.'s Eros Now. Mobile-only subscription (Counterpoint Technology Market Research) Netflix's global rival Amazon is also counting on India for growth and is prepared to take time to draw users. "We have a very long-term view for India, with a billion film-crazy people," said Gaurav Gandhi, director and head of business for Amazon Prime Video, India. "In the next four to five years, there will be more screens connected to the internet and we are looking at distributing across all platforms with personalized and quality video content at affordable prices." Pricing will also be crucial for Netflix. After introducing a promotional offer of about $3.65 a month for mobile-only users, Netflix decided to make the lower price permanent as "an opportunity to broaden access to the service," Greg Peters, chief product officer, said Wednesday. Torrent Downloads "Pricing is going to be the biggest challenge," said Hanish Bhatia, senior analyst at Counterpoint. "Indian users have not accepted the idea of paying for content yet. Two to three years back, everybody relied on torrent," the free protocol that lets users share and download films and TV shows without paying for them, Bhatia said. Netflix didn't disclose how much it's spending on local content in India. It did announce the addition of five series, two of which are being produced by superstars Shah Rukh Khan and Anushka Sharma. "Netflix wants to have one big original, almost like a new Bollywood movie, coming out every month," said Mihir Shah, vice president (India) at Media Partners Asia, a consulting firm. "In India, people pay for Bollywood. Netflix is hoping that if people are willing to pay $10 to watch a movie together as a family, they will also subscribe." Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. 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