While Netflix launched in India earlier this morning, we spoke with Indian and international on demand video companies to understand their strategies and ask how and what affects them. Here are their responses:
How are you modifying your catalog to compete with Netflix?
Uday Reddy, CEO of YuppTV: YuppFlix was launched primarily for the expat audience outside India, and we’ve been focused on ensuring that regional and Hindi content is the single point of destination for movies on demand. We will continue to add more TV shows and some original content as well. We’re doing premium content for outside India, but for India, the price point, the market, the volume, the way people watch is very different so we put a lot of different types of content together for Rs 99. On original content: When we launched Bazaar, people uploaded some 400 short films in less than 15 days. There’s a lot of creativity and potential there, but we’re yet to finalise on a budget for original content. And through Bazaar, we become a video enabler platform where users can put content and make the maximum revenue from it.
Abhayanand Singh, founder of Muvizz.com: Netflix is the global leader in offering studio content and caters primarily to the more mainstream titles however; and another entity called Mubi has existed simultaneously with Netflix. We are more like Mubi, catering to independent titles which get lost on such platforms. We are also a social platform, differentiating us from whatever exists in the same space today. We bring the best of curated world cinema to our users.
Abhesh Verma, COO of nexGTV: We’d already started evolving our catalogue and position since last year from being an aggregator to a content creator producing original and premium content. That emphasis is here to stay and we foresee the ‘content’ battle to intensify further. However, Netflix’s entry ratifies our presence in this business and our strategy of being subscription-led.
Michael Smith Jr. , CTO of HOOQ: This launch has been anticipated and should accelerate the expansion of the nascent OTT market in Asia. However, it doesn’t impact our strategy given that HOOQ is focused on the best of Hollywood and local content and the combination gives us an edge in these markets where local content is equally or more important to consumers than Hollywood content.
Nickhil Jakatdar, founder and CEO of Vuclip: We are well differentiated from Netflix (who uses Hollywood content as their value proposition) because our content is specific to consumers’ needs in each unique market be it India, Southeast Asia or the Middle East. We have more than 8 years of experience in these regions and our strategy is driven by video consumption data mined anonymously from millions of consumers. This methodology based on data science continues to work very well for us.
Subin Subaiah, CEO of Spuul Global: Why does everybody think I have to compete with Netflix? (laughs) We like to think of ourselves as a service which complements Netflix. We’re staying true to our core, to be the provider of Indian movie content, for the indian audience. Netflix has its own content, and it has a certain appeal to a certain segment of the viewing and consumer audience in India at their price point. Even if we were focusing on the Netflix audience (which we’re not), it would complement it. Somebody who can afford to pay Rs 600 for a Netflix catalog would be happy to pay Rs 100-150 for a Spuul catalog, and even Netflix can’t give everybody the content they need. In a different segment, the market is so huge, complex and complicated, that Netflix will play in it’s space and there’s a huge space left for us to address.
Uday Sodhi, EVP and head of digital, Sony Entertainment: Netflix’s catalog is very international and it offers a lot of Hollywood content. We’re going to be focusing mostly on our internal strengths to keep out catalog unique and as a broadcaster, we have the advantage of original, local and catch up content in terms of sports etc, which are add ons. We are also planning to add more content as we go along.
Siddhartha Roy, CEO of Hungama: Hungama Play was launched 4-5 months ago, it’s the early days but we’ve seen good traction. We have 7,500 titles on the platform, and the package starts at Rs 249 a month… Play already has international titles, I have a tie up with Warner Bros and we do a pay per view release in the US. We’re streaming movies which came out 3 months ago in the theatres. We have the best of international content, but let’s also be very clear of how consumption happens in the indian context. Mobile drives the single screen experience in India, along with short form and local content. Every 10 seconds, we look at the quality of your connection, WiFi or mobile data and based on that we increase or decrease the quality of your experience.
How does Netflix’s India entry impact the sourcing of content?
Uday Reddy, CEO of YuppTV: More than competing with, we complement Netflix because we’re focused on linear Indian TV broadcast and movies on demand. Netflix is more Hollywood content driven. In the Indian market, rights are aligned exclusively with satellite broadcasters, so premium platforms like Star and Eros want to release content through their own platforms. On price points, I don’t think anything beyond Rs 99 can scale in a big way for a content format like that of Netflix’s. In the US, mainstream linear TV channels like Directv, Dishtv and Comcast charge anything between $40-60 per month and people go for it because there’s sports content, 300-500 channels, including HD ones. Whereas when it comes to Netflix, its $10. So very high price points may not get a massive uptake.
Abhayanand Singh, founder of Muvizz.com: Netflix’s entry to India is a big positive as it validates the potential of VOD in our country. I can already see a lot of people who were sitting on the fence starting to describe them. Since the industry will grow, there could be some impact on the cost of acquisition though; we stand less affected since we offer quality and not quantity.
Abhesh Verma, COO of nexGTV: Content is one of the most fundamental assets of this business and costs of sourcing quality content have become almost prohibitive for everyone. This, together with the consumer’s taste for consuming and appreciating fresh, innovative stories is providing momentum to original content. We expect this shift to further amplify and new and finer content clusters to emerge as players define their USPs.
Michael Smith Jr., CTO of HOOQ: The content market is vibrant and competitive given there are many services already in India. With more serious players entering, it should further develop this ecosystem.
Nickhil Jakatdar, founder and CEO of Vuclip: We have very strong relationships built over last eight years with more than 250 content partners around the world. With many players attempting to jump into OTT, there are bound to be commercial pressures on content cost. However, our long term relationships with our partners are a strong asset and strength for Vuclip.
Subin Subaiah, CEO of Spuul Global: Not at all, content owners are very cognisant of the value of their content and proven that they’re not centred by huge amounts of money that gives returns on exclusivity. They do realise that there is a trap there that you can fall into and become completely dependent on a single acquirer of content, so Indian content owners have always been pretty clear that they’ll always be giving their content on a non exclusive basis and as long as the content is not abused and the commercial terms are acceptable, they’re happy. And that’s how it should be. Content needs to be distributed across a wide and complex market like India, you can’t hang your hat on one provider to do that. Widest distribution is the best bet for any content owner and that’s the way they’ll play it.
Uday Sodhi, EVP and head of digital, Sony Entertainment: It doesn’t really impact us. However, a lot of international companies would start looking at India as a superior market and this will bring variety.
Siddhartha Roy, CEO of Hungama: Netflix’s Indian entry demonstrates clearly that consumption is on the rise. And now major players are looking at this market. Hungama moved from music to movies, which happened in the last 6-8 months, based on consumption data that we observed. 34% consumers are consuming content in the video format in December 2015, up from 18% in January 2015. Right now for domestic, we will add more content, but I think that a lot of players in the Indian market are well positioned with our Indian content catalogs… There will be interesting and innovative services, also with respect to distribution but there has to be a lot of local innovation and structure that needs to be built…
How do you see it affecting consumer choice in India?
Uday Reddy, CEO of YuppTV: Even if we add Hollywood type of content for Indian audiences, they will pay a premium to access it. As the industry evolves, we have to see how ad CPM rates for the Indian market are. In China, the video industry is primarily ad supported, because of the volume and scale, but in the US, its subscription based.
Abhayanand Singh, founder of Muvizz.com: Customers will have a lot more choice to make and eventually they will settle down with maximum to two such platforms. One could be a mainstream platform and other could be a niche player like us. Ultimately, it will all come down to individual programming and user experience. We welcome Netflix to India.
Abhesh Verma, COO, nexGTV: Entry of new players in any market is undoubtedly positive for consumers as it gives them greater choice, even in a market dynamic as ours. Those who’ve been waiting for such a service will likely opt for it, depending upon their comfort with other parameters such as pricing, network availability, internet plans, ease of payment etc. However, this development should definitely help Indian consumers appreciate the positives of a subscription-led model and its pricing compared to the limited choice one gets on free platforms.
Michael Smith Jr., CTO of HOOQ: The big issue all streaming companies face is piracy and unwillingness of customers to pay. With multiple players now active and providing quality content, consumers are beginning to enjoy the golden age of the promise of online video and HOOQ is excited to be at the forefront of that trend.
Nickhil Jakatdar, founder and CEO of Vuclip: Overall, Netflix coming in is a positive event for the market. It is validation of what we’ve been doing for the last 8 years, with India indeed being seen as the most important market. With telcos rolling out 4G, now is the age of OTT services. Netflix will likely play a role in rapidly educating the market. Netflix is a well regarded brand and we do see them attracting their fair share of consumers in market. We wish them well. This market is large enough for multiple dominant players.
Subin Subaiah, CEO of Spuul Global: Netflix’s entry is a healthy boost to the ecosystem. And in our view, Netflix does take away the element of piracy. People will get used to legally consuming online video content like they have in other markets like the US. That’s good for the industry. If the product is good, the consumer will be prepared to pay for it. We think otherwise of the myth that Indians don’t pay. Indians are very aspirational people, they will pay for quality and the kind of content available in a robust and reliable fashion. Consumer is presented with content in a very fragmented fashion. And the promise of the future is everybody saying I have content and I’m going to have my own OTT play. And the consumer will have to run around from one OTT player to another, depending on the mix of content they want to watch. Netflix has established that the full stack pure play aggregator model is the most efficient way in which content will be consumed. That’s complementary for Spuul, because that’s what we do
Uday Sodhi, EVP and head of digital, Sony Entertainment: Consumer choice will improve because consumers will realise that there’s no need to download. You will get good quality content on the tap. (On tying with content creators:) We are currently tying up with content creators where we’re producing content jointly, or we’re commissioning it or looking to hire creators.
Siddhartha Roy, CEO of Hungama: (On tying up with creators) We’ve actually tied up with over 500 creators of music and content that does not belong to films. Indians are large consumers of film music, and that’s why we added music videos to Hungama Play. So there’s clearly an opportunity for consumers to consume music because they see music as a part of the movie experience. Our intent is to build value on the entire bucket and bring more and more conversations and stories for consumers where they see value of services..
Edit: This article has been updated to include responses from Vuclip, Spuul, Sony Entertainment and Hungama representatives.