3/23/2020

BUSINESS STRATEGY AND POLICY

WAC: Netflix In India: The Way Ahead

Resource person: Dr. Sami Bajwa

Program: MBA 1.5(Evening)

Submitted By: ID#

Fasih Abbas F2019273035
Umar Farooq F2019273016
Asad Ullah F2019273008
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Contents
1. Netflix in India: The Way Ahead Case Study
Analysis…………………................3
1.1 Introduction……...………………………………………………...……...…...………………...3
1.2 Netflix In India......………………………………………………...……...…...………………...3

2. Problem Identification of Netflix in India: The Way Ahead……………………...4

2.1 Primary Issues………......……………………………...……...…...……………………….........4
2.2 Secondary Issues………......……………………………...……...…...……………………….....4
3. SWOT Analysis of Netflix in India: The Way Ahead………………………….…5
3.1 Strengths………………………………………………………………………………………...5
3.2 Weaknesses……………………………………………………………………………………...5
3.3 Opportunities……………………………………………………………………………………5

3.4 Threats…………………………………………………………………………………………..5

4. PEST Analysis of Netflix in India: The Way Ahead………………………………

5
4.1 Political Factors……………………………………………………………………………........5
4.2 Economic
Factors………………………………………………………………………………..5
4.3 Social Factors……………………………………………………………………………………6
4.4 Technological Factors…………………………………………………………………………...6

5. Porter 5 Forces of Netflix in India: The Way

Ahead……………………………….6
5.1 Threats of new entrants………………………………………………………………………….6
5.2 Bargaining power of suppliers…………………………………………………………………6
5.3 Bargaining power of
customers………………………………………………………………….6
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Executive Summary
Netflix, Inc. (Netflix), is the world’s leading provider of subscription video on demand (SVoD), including
movies and television (TV) series, Netflix has aggressively expanding their services into new markets and
the company has entered into more than 190 countries with more than 75 million subscribers. The company
launched its Indian platform on January 6, 2016. Due to its huge population, India represented a lucrative
market. Furthermore, the younger generation in India had dynamic consumption patterns that were
comparable to those of Western consumers and internet usage among the young generation and high
propensity of smart phones usage among the population giving Netflix reasons to invest in the country.

This case focuses on the business model adopted by Netflix for its Indian consumers, taking into account the
vast diversity in terms of language, culture, and socioeconomic conditions in the market, as well as other
hurdles like competitors, censorship, and a lack of infrastructure. Even though Netflix has not the first
mover in the Indian market and many of its competitors are already doing extremely well. It faces the great
competition from already developed players like Eros and Hot star on top along with the competition from
the local cable providers. In addition to this, the internet speed and the availability of the contents is also a
constraint for the Netflix, since the content offered by the Hot-Star and EROS is more culturally inter active
and bounding than the Netflix.

Throughout this analysis, the expansion of Netflix into India will be evaluated. There will be a focus on the
entertainment industry and those providing SVoD within it. Besides, it also identifies the significant areas of
strength, weakness, opportunities and the threats of Netflix’s (India). This case analysis will also indicate the
major issues that Netflix has facing in India. The analysis will also showcase the PEST analysis and Porters
Five Forces for Netflix in India.
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1.Netflix In India: The Way Ahead Case Study Analysis

1.1. Introduction

The history of Netflix traces back to 1997 when it was founded in California by Reed Hastings and Marc
Randolph. In this context, it is worth mentioning that the idea of establishing the company
providing video-on-demand services for subscribers came to Reed Hastings after he was obliged to
pay a fine for keeping the rented movie after the deadline of return.

Subsequently, at first time, Netflix was nothing more than an online counterpart of the pay-per-
rent video outlets prevalent among Americans in the nineteenth. Eventually, within the short period,
Netflix has become the global leader in the on-demand online video market providing its service
to more than eighty million people living in one hundred ninety countries around the globe.

Nowadays, the business operations of Netflix are to be divided into three major sections. The first one
refers to the DVD rental service, the second one implies providing the video-on-demand streaming
service, and the third one refers to the company’s own production of the TV shows.

1.2. Netflix In India

Netflix introduced itself in India in 2016 in order to cater its huge population. The aim of the company was
to offer SvoD service (Subscription Video on Demand). In India Netflix is facing much competition from
the existing strong players such as EROS Now, Hot Stars, HOOQ, Spuul, Tv Apps, Google Movies and
Cable providers. On the hand, due to growth and technology company possess higher opportunity with
diversified cultures, which would help the company to grow further.
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Netflix offers different version in India, the one offered in the United states. They also customized the
Netflix into Indian version, by the production of its first original series in India (Sacred Games). Netflix is
also planning to expand their portfolio by providing content in Indian regional languages. Netflix also
offered a one-month free trail for the first-time users.

Netflix had not achieved the desired target of subscribers after six months in India but still Netflix is still
positive about its future in India.

2.Problem Identification of Netflix In India: The Way Ahead

There are many primary and secondary problems faced by the company.

2.1. Primary Issues:

These problems include:

 Weak infrastructure of the company

 Low internet connectivity problems in the country
 Unavailability of local/Indian content preferred by customers
 Censorship issues that are working as constraints of Netflix to grow in the Indian Markets.
2.2. Secondary Issues:

 Though the number of smart phone users are increasing, the availability of fast internet is an issue for
the company. It is due to the unlimited broad band package that mirage the speed available to each
individual and hence creates the bad impact on the overall business of company.
 The local TV content is being watched on a wide scale; hence the company faces the issues in
converting the target population to switch to Netflix VOD model when the cable net is cheap in the
market.
 The company is dependent on the local content producers to offer the content to Netflix which in the
presence of Hot star and EROS is difficult to acquire since they have strong market hold.
 There is a clear misalignment of the content that Netflix provides with the choices or preferences that
the Indian audience have for entertainment purpose.
 Lastly, the censorship board is challenge for the company, since the business model and objective of
Netflix supports the freedom to watch and what to watch, it resists the censor board policies while
creating content. Such resistance create hindrance in developing a full fledge strategy to cater the
market effectively.
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3.SWOT Analysis of Netflix In India: The Way Ahead

3.1. STRENGTH: 3.3. OPPORTUNITIES:

 World’s leading video streaming.
 Competitive Pricing.  Offer alternative
 Netflix provides original content. subscription to less
 Large numbers of diverse shows. frequent movie renters.
 Brand name.
 Adaptability.  Promotions and
 Customize offerings advertisements.
 Strong technological support and  Video game market.
innovation
 Live sports streaming.

3.2. WEAKNESS: 3.4. THREATS:

 Lack of updated movie selection.
 Dependency on user subscription.
 Cost paid for licensing.
 Cost of original content.
 Competitive pressures.
 Piracy issues.
 Fluctuating exchange rates.
 Price raise can shift customers
towards competitors.
 Censorship board is challenge

4.PEST Analysis of Netflix In India: The Way Ahead

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5.Porters Five Forces of Netflix In India: The Way Ahead

5.1. Threats of Potential New entrants: (Moderate)

 Changing technology up gradation.
 Content availability and convenience.
5.2. Bargaining power of Suppliers: (High)

 License to distribute the content.

 Netflix competing with the traditional media distributors.
5.2. Bargaining power of Buyers :(High)

 Revenue depends upon the subscribers.

 Buyers can switch to other subscribers.
5.4. Threat of substitutes: (High)

 Traditional media constitute threat to Netflix.

 Constitute threat from various other online streaming SVoD.
5.5. Competitor Rivalry: (High)

 Various competitors in the market including traditional media.

 Acquisition by competitors.
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6.Netflix In India: The Way Ahead-Recommendation

 Live streaming of sports.

 Additional feature to purchase specific categories of videos.
 Bundling broadband with Netflix subscription.
 Innovation in Pricing.
 Local language program streaming.
 Need to concentrate in piracy issues.
 Competitive pricing with regular attractive offers.
 Registration shouldn't require credit/debit card details.
 Free lifetime access to limited regional content.
 Tie up with local media houses for regional content.
 Garner upcoming content creators and provide them with a platform.
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