MARKETING PROJECT

ON

OTT PLATFORMS:
NETFLIX INDIA

PRESENTED BY:
Arindam sain B19128
Dewang pallav B19151
Deepthisree chunduri B19133
Mallika jain B19146
Shshank pandey B19169
Sudhanshu kumar B19174
OTT Platforms in India

OTT (Over-the-Top) platform refers to delivery of television and film content online, without
requiring a user to subscribe to satellite or traditional cable. Factors such as the exponential
growth of the number of smartphone users, the Digital India initiative and the introduction of
high speed internet services have encouraged OTT service providers to establish their presence
in India. Apart from the traditional OTT players in the market such as Netflix and Amazon
Prime, major broadcasters in the country have also invested in this segment and launched their
own OTT platforms (Hotstar, Voot, Alt Balaji, Eros, etc.)

Netflix India
Netflix launched its services in India in 2016 with the mission to provide customers with stellar
service, suppliers with a valuable partner, investors with the prospects of sustained profitable
growth, and employees with the allure of huge impact. Their global vision is to become the
best global entertainment distribution service in the world.
The statement is what the company is best known for– providing outstanding and unparalleled
video entertainment services. It also shows how the company balances the satisfaction of its
customers with the financial needs of its other stakeholders. Specifically, this mission statement
reflects the leadership position Netflix aspires to attain and secure in the sectors. It stresses the
desire to set a quality bar in the provision of on-demand video services.
Understanding the Market

A survey was floated to understand consumer various consumer preferences regarding OTT
platforms. While most of the respondents are young adults, they represent the majority of the
viewer population owing to the kind of content.

Gender-based distribution of viewers suggests a 2:1 ratio of male to female viewers broadly,
which suggests an almost equal representation considering the actual gender ratio. This
shows that the content on Netflix is not gender-specific at all.

Consumers may spend as little as a few hours per month to more than 2 hours a day on OTT
platforms. Time spent is a function of the consumer’s leisure time and choice and no other
physical constraint.
Netflix currently stands second in a close race with Amazon Prime Video. On talking to the
consumers, we realised that the biggest cause factor for this is price. Otherwise, viewing
experience as well as content is more satisfactory on Netflix.

There is a clean sweep by Netflix in the Indian market when it comes to viewing experience.
On speaking to the consumers, we were told about the factors such as HD quality,
uninterrupted streaming, less ads, complete season upload, etc.
This showcases Netflix’s strengths and weaknesses when it comes to content. They are the
reigning champions in Drama and fairly good in Comedy, Horror, Sci-Fi but need to up their
game in Sports.

Netflix has a fairly good reach when it comes to supported devices. Especially useful for
people who watch on the go, at work breaks or while commuting. Also, it supports a greater
data bandwidth while maintaining its HD quality.

When it comes to value perception in consumer’s eyes, Netflix holds a good enough place
considering that it is the most expensive option but is still perceived as a value for money by
more than half the users.
Macro Environment Analysis with PESTLE

Political: Globally over 130 countries have seen the rapid rise of Video OTT entertainment
industry primarily over the past decade. The censorship and content limitation policies
require market players to cater and censor the content to a country’s political sensibilities in
many regions. The political scenario is yet to catch up with the disruptive pace of the industry
due to the internet being largely an uncontrolled domain in major regions. This has provided
the industry with a distinct first mover’s advantage to establish their dominion usually
supplemented by a customised pricing model.

Economic: The over-the-top streaming service industry has seen many traditional players
enter purely on their capital power. The infrastructure and content creation cost makes this
industry an investment heavy industry. The cost-recovery period is extremely long even for
major players such as Netflix. Indian OTT market is worth $5billion in its current projection
state. The advent of cheap data - $0.26 / GB which is the lowest in the world has provided a
much-needed boost by increasing consumer purchasing power for OTT services.

Socio-cultural: The breakup of the Indian OTT entertainment industry is distinctive with
respect to the rest of the world with a unique picture emerging. There is an evident preference
for regional and religious content which is followed by cooking shows. This dynamic
positions India as a highly customised market with different content necessary for different
cultures.
Technological: The technological advances in streaming have been directly reflected in this
very modern mode of entertainment. There is a need to have strong infrastructural foundation
to provide for uninterrupted services. This has been fulfilled by major traditional production
houses who have entered the domestic market for OTT. The cloud-based hosting services
involve considerable costs. This has provided one of the players viz. Amazon prime an added
advantage because of its parent company’s AWS cloud service.

Regulatory: The current scenario for video OTT entertainment sector is in its nascent stage.
The Telecom Regulatory Authority of India (TRAI) has recently taken up the issue of
regulations front with a large number of players allegedly receiving high monetary benefits
due to unregulated pricing strategies. This development indicates future levy of restrictions
on the currently independent OTT industry. It also brings the pricing model aspects of the
industry under regulatory purview of the government.

Demographic: The industry demographic has a unique structure with regards to the
acceptance of OTT as a primary offering. The urban young crowd is seen as the major
consumer of content. There has been catered content creation to gender and age
categorizations. The targeted profile analysis is possible because of the online nature of data
which allows for faster processing. Many industry players have identified the need to target
the segments on the basis of high levels of customization. Another factor which plays an
important role is the varied nature of offerings each service provides. With the alternative
regional content which can come to the fore as a major consumer segment is the populace
over 50 years of age.

International: Internationally this industry has seen saturation in developed countries and
faces stiff competition with the entry of Disney, Apple, AT&T who have a strong foundation
in technology. The developing economies have now been identified as the next avenue for
major global players. The price-to-return ratio is being worked upon for these price-sensitive
segments. The BRICs nations also have been seen as future primary markets of OTT giants
who are finding recovery sources for the high costs of content production. Though China in
particular faces boundaries and limits global players.
Ecological: Being a virtual industry the direct impact on ecology is often brushed under the
carpet. There are though studies which give out grave point to ponder upon. In 2018, online
video traffic was responsible for more than 300 million tons of CO2. This singular data point
in itself reflects the hidden costs which the ecology will pay with the consumer base on the
rapid rise. The sustainability of content creation is also under the scanner with some
production houses going all out to churn uninterrupted content. No international institutions
of governments have yet figured out the bigger picture OTT streaming impacts on the
environment around.

Competitor Analysis and Industry Analysis

The entertainment industry is seeing a shift from the traditional Television entertainment
industry to a more OTT (Over-The-Top) Service based market. When Netflix had started out
as a service in 1997, it was the world’s first online DVD rental store. But by 2011, it moved
to a more video-on-demand approach. Then finally, it started creating original content as well
from 2008. But it was only in the early stages of 2016 that Netflix made an entry into the
Indian market. Hotstar had already started capitalizing on the Indian market’s untapped
potential for streaming services since its launch in February 2014. Even by the end of 2016,
the only major players in the market were the market leaders Hotstar, and the budding
challengers Netflix.

However, over the years, the number of competitors in the online streaming space have
exponentially increased. Currently, there are more than 10 competitors in the Indian market,
and more are looking to enter soon. Names like Amazon Prime Video, JioTV, SonyLiv, Voot
and many others have entered the competition for winning the online streaming space. The
viewership data of some of the competitors of Netflix are given in the Figure.
Share of OTT in Indian Market

Fig1: Monthly Active Users in OTT market Fig2: National and Tier-wise data for
OTT Platforms

Netflix Hotstar Amazon Prime

Subscription Price (INR) Monthly - 199 Monthly - 199 Annual - 999

Monthly - 129

Active Users (Mn) 11 130 13

App Share % 5 29 10

App Uninstall % 17.33 6.72 6.76

Net Promoter Score (Out of 1) 0.67 0.57 0.57

Porter’s Five Forces Analysis

1. Threat of new entrants: The streaming space in India is an oligopoly with few players
like Amazon Prime, Hotstar etc apart from Netflix India. Since the players are with deep
pockets, barriers to entry are quite high for a new entrant. However, there are good
chances of high-profile entries like that of JioTv, Disney etc.

2. Threat of Substitutes: There are a number of available substitutes to Netflix. The

buyer’s switching costs are low. Since Netflix offers only monthly subscription,each
month when a subscriber takes the decision to pay the subscription fees, there is a chance
of losing customers to substitutes. The buyer’s propensity to substitute can be low in
cases like that of some ongoing series to which the buyer is hooked to. The ease of
substitution is also high given that it takes only a few clicks to do the same. There is also
a threat from the players like the TV and other entertainment providers and Netflix has to
focus on cost and product diversity to maintain its edge.

3. Competitive Rivalry: The rivalry between the competitors is on a rise as everyone

wants to grab the maximum share of the pie. In case of Amazon Prime, a subscriber gets
access to a host of services like Prime Day Sale, one day delivery etc apart from the
regular streaming service at a comparatively lower cost. Another aspect of rivalry is in
the type of content as in the case of hotstar one of the primary reasons for its success is
that it streams cricket matches and India is a cricket loving nation. Netflix has to focus
both on content as well as subscription charges to increase its market share.

4. Bargaining Power of Suppliers: Suppliers in this case are the content providers,
although there are several original content developed by Netflix yet it depends heavily on
external content providers. These content providers viz TV shows, networks and
filmmakers do have significant bargaining power as they have the option of switching to
substitutes.

5. Bargaining power of customers: There is almost negligible switching cost for the
customers as they can switch to any of the streaming service only through a few clicks.
The buyers are well informed about the different substitutes available in the market.
Price sensitivity is also high among the customers since the customers can easily switch
to others if they get a price benefit. Netflix has to carefully select the best possible
 combination of movies and TV shows to be streamed on its platform in order to reduce
the buyer power.

SWOT Analysis

• Strengths: The largest streaming service internationally, Netflix enjoys a brand

recognition that had led to its quick adoption by Indian consumers. Within the short
span of 10 months, it went from 0.5 million subscribers to 4 million, possibly a result
of this. Its large customer base gives it the bargaining power to secure more exclusive
content. Its technology allows for seamless streaming on multiple platforms. Finally,
it has wide repository of content that appeals to millennials and urban middle/upper
middle-class audience.

• Weaknesses: In the Indian environment, customers are price sensitive still not very
willing to pay for streaming services. Moreover, Netflix is far from the cheapest
service. Another major weakness of Netflix is the lack of content- original or
otherwise- in Indian languages.

• Opportunities: Given the growing number of smartphone users and surge in

broadband use, Netflix has an opportunity to increase its subscriber base. It can grab
market share by expanding services into local languages. Moreover, Netflix is also
building capabilities that will allow consumers to stream with very low data rates and
download and watch videos. This will give it an edge over competitors, who still don’

• Threats: Competitors like Amazon Prime, Hotstar and other local service providers
who stream more content in Indian languages and offer their services at much lower
prices are the major threat to Netflix. In addition, with the industry being attractive,
more and more players are looking to enter, from international giants like Walmart
and Walt Disney to local players who have access to Indian content.
References
1. https://www.slideshare.net/MarvinDiaz12/netflix-growth-strategies-to-tap-indias-5bn-
market-148205338
2. https://economictimes.indiatimes.com/tech/internet/india-has-the-cheapest-mobile-
data-in-world-study/articleshow/68285820.cms
3. https://www.slideshare.net/MarvinDiaz12/netflix-growth-strategies-to-tap-indias-5bn-
market-148205338
4. https://www.news18.com/news/tech/limited-scope-to-regulate-ott-apps-and-dth-
telcos-in-similar-light-says-trai-2148607.html
5. https://www.livemint.com/Companies/cWv51MdCjmaRByx541fq7L/Netflixs-big-
game-plan-for-India-and-other-markets-outside.html
6. https://www.dw.com/en/is-netflix-bad-for-the-environment-how-streaming-video-
contributes-to-climate-change/a-49556716
7. https://businessteacher.org.uk/swot/netflix.php