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Online TV network Netflix has finally (finally, finally) launched in India, available to users for free for a month, and at Rs 500 per month thereafter for non HD content, limited to one screen. For HD content on two screens, the company is charging Rs 650 per month, and for Ultra HD content that can be viewed on four screens, it will charge Rs 800.

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The company announced a simultaneous launch in 130 countries at the same time. It’s worth noting that NetFlix began adding Bollywood content a few months ago, for markets other than the US.

Some thoughts on the NetFlix launch

1. What will competitors do? The NetFlix for India is now NetFlix, and there really isn’t sufficient competition there because none of the existing players have been able to entrench themselves enough, and get enough users to keep the competition alive. For comparison, if you look at the e-commerce market, Flipkart already had a excellent customer service, strong brand affinity and a substantive enough customer base by the time Amazon launched in India. That isn’t the case for most video services.

There’s a graveyard of video content aggregators that very few people would even recall, including services like SeventyMM, iStreamYahoo India’s MoviePlex, Video on the Rocks from STAR and scores of others. Even Rajshri.com, which began as a source for viewing and renting/buying Bollywood content, is now only distributing it via other platforms. We don’t know if Apalya made its investors any money.

There are still many video distribution platforms operating in India now: among them, Spuul is independent, Times Internet owns BoxTV, there’s EROS NOW, Singtel has backed HOOQ, STAR streams its own shows via HotStar (with the catchy tagline “go solo”). This is apart from Zee Groups Ditto TV (and DishMobile), and Digivive’s nexGTv, and, of course, good old Hungama. We checked and it appears that BigFlix is still around. Pritish Nandy Communications has backed another streaming service, called Ogle. Airtel has Wynk Movies. We probably missed mentioning half a dozen others.

2. How much will people pay and for what?

First on Pricing: Rs 500 for non-HD content is particularly high, from NetFlix. While a straw poll of 371 Twitter users (hardly an indicative survey) suggested that 55% people would be willing to pay Rs 199 per month, my guess is that it would have been similar if the lowest value there was Rs 99 per month:

BoxTV is Rs 199 per month (with a Rs 49 trial version), Spuul has premium content at Rs 300 (and pay-per-premium-movie renting at Rs 60), and EROS Now is at Rs 49 per month, largely for Indic language content, HOOQ is at Rs 199 per month.

But what is also critical is the catalog. Different players have different content. Some have only Indian language movies. Others have Indian movies and TV shows. Some mostly have Hindi content. Some have English movies, not TV shows. Here’s what’s missing: Amazon’s philosophy of the everything store. If you have an unlimited catalog, it helps users feel comfortable about paying a slightly higher price, because they’ll get choice.

This is where supply side limitations from two perspectives come in: firstly, there might be content creators who are unwilling to share their content, demanding a much higher fee. That gets addressed when you have deep pockets, and intend to become the largest aggregator, so that you increase the dependency of the content owner on your platform. Secondly, ego issues. Indian content owners typically don’t like one player becoming dominant. With NetFlix, as with Apple for music, the dependency and revenue opportunity for content owners is global, and financial gains from across the globe are likely to override concerns over becoming too dependent on a single platform in India.

3. Flipkart missed out:

Flipkart pulled the plug early in the game with Flyte, their music store, because content owners became far too demanding, regarding revenue shares. From what we gathered at the time, there wasn’t sufficient demand for content to justify significant management focus on scaling Flyte as well, so Flipkart chose to focus on what brought it immediate scale. Some would call this focus, and they have a point, but in the broader scheme of things, Flipkart missed out on becoming the digital goods store that co-founder Binny Bansal had spoken with us about.

4. How will the battle with YouTube play out?

NetFlix versus YouTube is Amazon versus Ebay; a scripted show versus an open-mic. Some screen and select, and build a catalog that is large and useful. Others take the platform approach, increase fragmentation, and help users discover what they need from those choices, and monetize aggregation. Most professional content owners (studios) in India have chosen YouTube (and some DailyMotion), to stream their content, because that’s where the audience is, and where their monetization is maximum. India is a particularly unique country, because many TV studios upload their content on YouTube. The BIG question: will some studio content creators shift lock-stock-and-barrel to NetFlix? In our opinion, this depends on how many people actually sign up for NetFlix, and the terms of the deal.

Secondly, the YouTube ecosystem is vibrant, albeit somewhat unhealthy for smaller original content creators, with the biggest problem being discovery of content. For many smaller original content creators, an audience comes with YouTube, monetization comes elsewhere. This NetFlix versus YouTube might just become a battle between traditional content creators versus the new ones.

5. What will TV companies do?

DTH companies like Tata Sky and Dish TV have their own video services. Tata Sky has its own video streaming app: the oddly named Everywhere TV. Dish TV (the Zee Group) has Ditto TV, also repackaged as DishMobile. Sony has Sony LIV, Star has HotStar (wonder who thought up the tagline ‘go solo’). Will they withhold their content from other platforms like NetFlix? Remember, the Internet doesn’t have a must provide clause for content companies in India, unlike TV, and distribution or content companies won’t want to cede ground to NetFlix.

6. How will regulators view NetFlix?

Content on the Internet is unregulated, but those distributing content online in India have tended to be cautious about the kind of content they’re showing. NetFlix in India is uncensored, and the government of India has no real policy regarding regarding regulating online content. Online platforms are where you find content which is a little more risqué (we wrote about this earlier) and offensive. Everything on the internet is bound to offend at least someone.

7. What will NetFlix do about piracy?

There are people in India who watch the House of Cards the weekend it releases. Others wait for monday morning (night in the US) to download the latest Game of Thrones episodes. Traditionally, movie studios have gotten John Doe orders to block torrent sites. Will NetFlix adopt a pull or a push approach, or both? Will they promote their great catalog and entice users to sign up, or will they get John Doe orders and get torrent links blocked? Or both?

8. Is this launch in anticipation of greater speeds and lowering of broadband costs or data caps?

Mobile isn’t broadband in India yet: we might get great speeds at places where there is low congestion, but speeds aren’t consistent enough for it to be deemed broadband. People are patient enough to wait for videos do buffer, but it’s a lot easier to download. For Airtel and Reliance Communications, video constitutes close to 40% of their traffic. There is need for infrastructure investment and consumption will only increase once focus shifts back to enabling wireline Internet access. At the same time, 4G (with 20MHz of spectrum) is on the horizon. Cost of data is still very very high in India. Videos consume a significant amount of data, and this doesn’t address the issue of data caps.

9. Binge-On and Net Neutrality: NetFlix is a part of T-Mobile’s Binge-On plan, wherein a selection of video services are zero rated for US consumers. This has led to YouTube being slowed down for T-Mobile users, and made relatively more expensive to view. It allows carriers to discriminate on the basis of price, which services (or selection of services) are free. It remains to be seen whether NetFlix will partner with an Indian carrier for zero rating. It’s perhaps timely that the last date for submission of comments to the regulator on differential pricing in India is today; the last date for counter-comments in 14th January 2016. We’ll keep an eye out for NetFlix’ submission, if there is one.

Image by Matt Perreault, used under CC-BY-SA.

Disclosure: I’m a co-founder of the Savetheinternet.in coalition for Net Neutrality in India, and MediaNama has taken a strong position in favor of Net Neutrality