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Netflix has become a staple on American households.
So it might be hard to believe that the majority of its 137 million subscribers are international.
The streaming giant has expanded to over a 190 countries, but one country where Netflix has had difficulty breaking through is India.
Both Netflix and Amazon Prime Video launched in India in 2016.
Thanks in part to the drastic drop in mobile data prices.
Streaming services which were once considered a luxury suddenly became increasingly more appealing to Indians.
India is now the second largest internet market in the world following China.
More than 35 different streaming services have launched or expanded their businesses in India in the last three-and-a-half years.
One company that streams Cricket and Indian movies and shows called Hotstar is leading the race.
Research firm Jana estimates Hotstar holds about 70% of the on-demand local streaming services market.
Even Amazon Prime video is bigger than Netflix in India.
And India's online video market valued at over $700 million is expected to grow to $2.4 billion in value by 2023.
But according to analysts, Netflix is not grabbing a huge piece of that pie.
We think that Netflix likely has somewhere between half a million and a million paid streaming subs in India right now.
Pricing might be one reason Hotstar has had an edge on Netflix.
Hotstar offers its premium service for about $3 a month in India and about 80% of its catalog is free to begin with.
Amazon Prime costs about a $1.90 a month including access to Prime Music.
Compare that to the cheapest plan that Netflix offers which is a little over $7 a month.
Hotstar also offers streaming rights to the majority of Cricket tournaments in India, the country's most popular sport.
Earlier this year, 10.3 million viewers tuned into Hotstar to watch the finale of the Indian Premier League tournament.
Facebook even offered to pay more than $600 million for the IPL's digital rights but lost out to Star India which owns Hotstar.
It's worth noting that Netflix has purposefully stayed away from streaming live sports in the United States.
It's a strategy that's worked well so far domestically but it remains to be seen if it will work in India.
Then there's the hunger for local content, here again Hotstar has an advantage.
Because it's been able to provide shows in regional languages which it borrows from channels operated by Star India, its parent .
But Netflix has taken note of the demand.
We'll go from expanding, you know, beyond English into Hindi and then into many more languages, more pricing options, more bundling, all of those things are possible.
So we'll take it, you know, a million at a time and figure out how to expand the market as we grow.
Despite India's challenges, part of the reason investors have given Netflix its God evaluation is precisely because it has room to expand.
It's been an awesome growth story and it will continue to be an awesome global growth story as they expand into Asia, India and some of the international markets.
So our evaluation right now is $420 a share, that's progressed upward over time.
And we think that given that global runway it's likely to continue to go in that direction.
It'll take time for Netflix to build up its presence.
We have generally seen historically it take about three years for Netflix to achieve 10% household broadband penetration.
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Why Netflix Is Struggling in India

4454 Folder Collection
Liang Chen published on January 13, 2019    Liang Chen translated    Evangeline reviewed
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