Page 84 - Bloomberg Businessweek July 2018

Bloomberg Businessweek July 2, 2018
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S Hollywood to its knees. Beating the past two years as local telecommunications com-
16 ● Netflix has brought Yet India has zoomed up Hastings’s priorities in
panies invested billions of dollars to bring the coun-
Bollywood may be harder
try online. More than 150 million people have access
S Addressing a room filled with New Delhi’s business to broadband of some kind, mostly via their phones.
Indians with access to fixed broadband at home—
Netflix’s proxy for would-be binge watchers—now
elite earlier this year, Netflix Inc. Chief Executive
years ago, company officials say. “Even we couldn’t
Officer Reed Hastings offered a prediction: His com- number about 50 million, up from 20 million two
pany’s next 100 million customers will come from predict the last two years of Indian internet growth,”
India. The crowd grew silent as the man interview- Hastings says. “It’s the most phenomenal example
ing Hastings, local entrepreneur Ronnie Screwvala, anywhere in the world.”
chuckled. Netflix has fewer than 1 million customers Investors value Netflix at more than $170 billion
in India, and even aggressive forecasts by analysts because they believe in its potential to attract cus-
suggest the video service will reach only 3 million tomers in the world’s largest economies. The U.S.
by 2020. Hastings just smiled mischievously. market is already saturated, and growth in Latin
Netflix didn’t regard India as much of an oppor- America and Europe is under way. China isn’t wel-
tunity when it first expanded there in January 2016. coming Western video services, so India represents
The company has built the world’s largest paid Netflix’s biggest opportunity in Asia.
online TV network by taking advantage of the pro- Since opening an office in Mumbai in 2017, Netflix
liferation of high-speed internet to deliver a video has hired an executive to oversee scripted program-
service that’s cheaper and easier to use than cable ming for India and spent the past 18 months selling ILLUSTRATION BY JORDAN METCALF. COURTESY NETFLIX. DATA: NETFLIX, BLOOMBERG, WORLD BANK
or satellite TV. But Netflix’s average monthly price itself to local filmmakers. Despite a global diaspora
in India of 500 to 800 rupees ($7 to $12) is twice as of Indians, taste in entertainment locally is stub-
much as the average pay-TV offering. Fewer than bornly parochial. All but 1 of the 20 highest- grossing
10 percent of Indian households with TV pay for a movies in India are local productions. To curry favor
premium TV service that costs more than Netflix. with audiences raised on Hindi fare, Netflix is com-
Equally challenging: The vast majority of titles on missioning original TV shows and movies more
Netflix’s service in India are in English, but films quickly than it has in any market, even the U.S. The
Edited by
James E. Ellis there fare best when in Hindi or Tamil. service has already released a couple of movies in