Netflix co-founder Reed Hastings says India is a 'speculative' investment – talks about pricing experiments and partnership with Jio
- During the earnings call,
Netflixco-founder and chairman Reed Hastingsspoke about the company’s India investment, and why the country remains a tremendous opportunity.
- Hastings compared India’s growth chapter to the success the company has seen in Korea, Japan, where the country has doubled down on original content.
- Even though India remains a low ARPU (average revenue per user) market, it has pushed the company for more pricing experiments.
AdvertisementStreaming giant Netflix on Tuesday announced its first quarter earnings, where it said it added four million new customers, globally. During the earnings call, Netflix co-founder and chairman Reed Hastings spoke about the company’s India investment and why the country remains a tremendous opportunity.
However, Hastings didn’t hold back to say that the investment in India remains speculative. “India, we're still figuring things out. And so that investment takes some guts and belief forward-looking. But the other investments you should think of, just like rich European countries, content exports really well, and we're just getting a little better every month on it,” he said.
Hastings compared India’s growth chapter to the success the company has seen in Korea, Japan, where the country has doubled down on original content. “(About India) I would say we're still mostly focused on getting a content fit and getting broader content. So that's why I'd say that one is a more speculative investment than, say, Korea or Japan, which, again, 5 years ago was very speculative when we did those, okay? But we've got off – we're over the hump on that,” he said.
The streaming giant’s top executives remained bullish about India and it being a ‘tremendous opportunity’. Earlier, Netflix had announced its plans to release 41 new original productions this year, in India alone. Theodore A. Sarandos, Netflix’s co-CEO, chief content officer and director said that in India, the wait is worth it. “It's just, like all great opportunities, it's a long journey, and it's a challenge. And we think it's worth it. And that's why we're investing early and trying to stay ahead of it. And I think we'll be able to see those kinds of results that we've seen in other places in the world as we continue to learn more and more and more,” he said.
So, even though Indian remains a low ARPU (average revenue per user) market, it has only pushed the company for more pricing experiments. Gregory Peters, Netflix’s chief operating officer and chief product officer, said that the company is still trying to figure out the right pricing model for India.
Netflix has gone from desktop only plans starting at ₹699 per month, to introducing mobile only plans in India for as low as ₹199. They have also built partnerships with the likes of Jio, Asia’s richest man Mukesh Ambani’s telecom and digital platform.
Peters spoke about a successful strategy for them has been leveraging go-to-market partners who have existing relationships with consumers and use them to push Netflix service and then have them make it ‘easy to pay’.
“The ultimate and easy to pay is it just included the sort of bundled offerings that we've been doing more and more of, and Jio is a great example of a partner we've been working with there to really bring the service to a new demographic at a very, very low price associated with low-cost mobile plans that they're offering as well as home-based IPTV plans. And those have been successful for us as well,” said Peters.
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