Netflix Inc, the world's largest independent video streaming company, has launched its service in India as part of a wider international expansion. It has positioned itself as a premium player with its subscription fees much higher than its local peers.
Although the move is not expected to immediately shake up the internet television market, if packaged aggressively with broadband data plans it may start chipping into the premium end of the home entertainment business of cable operators and DTH service providers.
The internet TV network launched its services simultaneously in 130 countries including South Korea, Turkey, Russia, Poland, Vietnam and Nigeria. It, however, skipped China.
Announcing the launch at technology fair CES 2016 at Las Vegas, Reed Hastings, co-founder and CEO, Netflix said, "Of the 3.2 billion people on internet globally, 2 billion people belong to developing nations, which makes these markets very important.
With the help of the internet, we are putting power in consumers' hands to watch whenever, wherever and on whatever device."
Reed added that going forward Netflix will focus on adding more content in addition to introducing new languages in its interface.
Netflix already provides language support in Korean, Arabic and Chinese.
What's more, in 2016 the company plans to release 31 new and returning original series, two dozen original feature films and documentaries, a range of stand-up comedy specials and 30 original kids series — available at the same time to its users.
Netflix, which started focusing on original content in 2013, claims that in Q4 2015, 12 billion hours of content was watched on its platform compared to 8.5 billion hours of content watched a year ago.
Reed also said that consumers across the globe are ready to pay for content, if provided at a right price.
Netflix is offering three packages for Indian consumers starting with a basic plan that would cost Rs 500 a month and allow users to access all content on any one device at a time with standard definition quality. The other two higher subscription plans allows users to watch content with HD or ultra HD quality and a choice of 2-4 devices at the same time. The topmost package is priced at Rs 800 a month.
In contrast, domestic and international peers in India such as Hungama Play, BoxTV of Bennett, Coleman & Co Ltd, HOOQ and Singapore-based Spuul charge Rs 200-300 a month.
HOOQ, which was launched globally in a three-party JV by Sony Pictures, SingTel and Warner Brothers a year ago, also offers a bundled deal with Airtel's Wynk Movies app.
A cable TV service, on the other hand, costs around Rs 250-300 a month for a bouquet of a basic set of channels.
Where Netflix can differentiate is its huge catalogue, especially English language entertainment content. It is currently offering a one-month free look period. However, this comes with a catch.
Besides bandwidth issue and cost of watching entertainment content online, another hurdle for wider adoption of Netflix, to begin with, could be its insistence on credit card details even if one chooses to opt for a one-month tasting period.
Its global rival HOOQ does not come strapped with such restrictions and also allows payment through debit cards, post the free-look period.