Is This Netflix Move in India Enough?

Netflix (NASDAQ: NFLX) hasn't met with much success in India so far as premium pricing, limited internet speeds, and high data costs have checked its growth. Additionally, the streaming giant made a mistake by not offering its full content library at launch. This defeated the purpose of buying a Netflix subscription, as its value didn't compare well with that of alternatives such as Amazon's (NASDAQ: AMZN) Prime Video service and local provider Hotstar, which provide more features at lower costs.

Netflix's basic plan, costing INR 500 (about $8) a month, is expensive when compared to Amazon Prime Video, which comes along with a Prime membership that costs the same for a one-year subscription. Netflix had an estimated 4.2 million subscribers in India earlier this year while Amazon Prime had nearly 10 million.

But Netflix's recent moves in India suggest that it is looking to change the state of affairs by ramping up its content strategy.

Netflix lands a big win

Netflix reportedly recently splurged $4 million to acquire the streaming rights to the famous Baahubali franchise. The two films in this war epic have been highly successful, with their worldwide collections  clocking almost $370 million collectively. In fact, the second installment in the franchise was the first Indian film to cross the INR 1,000 crore mark (almost $160 million at the current exchange rate) at the box office.

The franchise's popularity could be a big deal for Netflix in India and help it gain some ground over rival streaming services. Additionally, the exclusive streaming agreement for such popular films could help Netflix justify its premium price tag.  

Furthermore, the global popularity of the Baahubali movies could be beneficial for Netflix as a whole. As it turns out, the second part of the franchise got 20% of its collections from overseas markets, so it might help Netflix pull in more subscribers around the world.

Aggressively focusing on content

According to Netflix executive Jessica Lee, the streaming giant is "doubling down" on content in India.

Last month, Netflix appointed Simran Sethi as the new creative executive for India. She will be a part of a group that produces original shows for the international market. This makes it evident that Netflix wants to add more India-focused originals to its content library. As it stands, the company currently has just three original shows for this market, with two of them currently in production.

The first Netflix original for India was launched over a year ago, so the company has been slow to add to its library. Meanwhile, rival Amazon released its first India-centric original in July 2017, and it became the most-watched show on Prime Video. Netflix needs to get more originals into its content library since they seem capable of increasing viewership and subscriptions, but it needs to do this quickly as Amazon is moving into popular niches of the Indian streaming market.

Amazon is stepping on the gas

Soon after Netflix announced the two new originals for India, Amazon fired shots of its own by announcing three original comedy shows that will start airing from the first quarter of 2018. In fact, Amazon plans to launch a total of 21 original shows for India, which makes it the company's first market outside the U.S. with so many originals.

Furthermore, Amazon has charted out a shrewd strategy to bring more viewers onto its platform by streaming reality shows. The company didn't get into details as to whether it will produce a reality show of its own or acquire the rights to one of the many reality shows currently running on Indian television.

As it turns out, reality shows account for two of the five most-viewed television programs in India, according to weekly data from the Broadcast Audience Research Council. So, any move by Amazon in this space should be a plus and could bring new viewers to the platform.

The Foolish takeaway

Amazon has been much more aggressive than Netflix when it comes to tapping the Indian market. Though the streaming specialist might have landed a coup of sorts with the highly popular Baahubali franchise, Amazon seems to have a better strategy. The e-commerce giant has already announced a big slate of original shows for this market, while its strategy of streaming reality shows can potentially boost viewership.

Netflix's recent content moves might not be enough to make a dent in India's fast-growing online video subscription market.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Netflix. The Motley Fool has a disclosure policy.