Will Netflix’s AD-supported plan help it break the Indian market? Partho Dasgupta shares that it is a decision that should have been made a long time ago!
Many brands had to change their strategy while entering the Indian market. Indian people’s choices, priorities, their values have to be kept in mind before any business enters this market. With the advent of OTT platforms, Indians recalibrated their choices and the younger generations started moving towards ‘unconventional’ OTT for better content. Then came corona which pushed every millennial onto these platforms for varied content.
Netflix, which was extremely popular in the west tried to establish itself in the Indian market but faced problems as it could not provide the ‘value’ Indian customers were looking for. “Today any company that wants to grow cannot ignore the Indian market, but they have to understand that we are a country that looks at the value that a product offers not just financially but overall” shares.” Partho Dasgupta , Ex-CEO of BARC India and Presently Managing Partner, Thoth Advisors.
Netflix has faced high competition from popular OTT apps like Hotstar, Prime Video, Hulu, etc. for viewer attention. After trying different things to try to boost its bottom line, Netflix finally launched its Ad supported tier last year in November in selected countries. Even though the plan has not been launched in India, Netflix has finally tried something that might help them.
According to Dough Anmuth, an analyst for Dough Anmuth, Netflix stands to attract 7.5 million subscribers through its AD-supported plan in 2023 from US and Canada. It will amount to close to $600 million in sales from advertising. People who opt for this plan will be shown 4 to 5 minutes of ads each hour. The duration of ads will be 15 to 30 seconds playing during movies and shows which is not a bad deal at all. However, viewers of this plan will have to see a lower resolution view at 720P. other restrictions include reduced access to content.
“India is a price sensitive market and supports heterogeneity. In my view free Netflix with AD supported plan will help it go beyond the metros and get a wider viewer base. Of course Netflix also has to tailor its content to make it relevant to all users.” Partho Dasgupta BARC Ex CEO and Presently Managing Partner, Thoth Advisors.
Initial reports of the Ad-supported plan suggested that there were only 9% of Americans opted for this plan in the US. The basic plan was not able to garner the ‘Minimum viewership guarantee’ which led Netflix to return money to the advertisers. However, no official numbers have been put out by the company as of now. In this economy where a recession is expected and there are numerous layoffs, Netflix must quickly try to find its footing in the market and try new things. A report by Eros Now-KPMG report, viewers in India spend 70 Minutes each day on OTT platforms. With numbers favoring OTT markets, it is only a matter of time before OTT platforms face tougher competition. Finding a suitable business plan is of utmost importance. As of now, we have to wait till Netflix releases this plan in India and see if the Indian customer finds ‘Value’ in it.