Netflix CEO Reed Hastings recently said the company was “frustrated” that it couldn’t get subscriber growth momentum going in India. But the company’s attitude towards the Indian market and Indian content have always suffered from severe strategic missteps, and perhaps most fatally, an unwillingness to break new ground.
Over the last five years, it dragged its feet on commissioning world-class hits from India, fired executives who may have made a difference, and manifested an inward-looking posture that left it eating the competition’s dust. But low subscriber growth in India is not Netflix’s biggest failure.
It’s not Netflix that failed in India. It’s Netflix India that failed globally. Data reviewed by Entrackr shows just how anemic the performance of Netflix originals outside the Indian subcontinent has been: not a single film or TV series has entered the top 10 of Netflix in the United States, the company’s wealthiest and most important market. The company failed to leverage India as a content producer for global audiences, and focused disproportionately (and ineffectively) on subscriber growth in a poor market that largely cannot afford even its reduced prices.
With the exception of Sacred Games, which received some international attention — and stopped after two seasons in 2019 — Netflix India has commissioned dozens of titles, films as well as TV shows, none of which have registered internationally, let alone achieved the heights of shows like Narcos or Squid Game.
For instance, Yeh Kaali Kaali Ankhein, the most significant series released by the company in the last few months, has only reached top ten lists in South Asia and in countries with a sizable Indian diaspora:
This is the case with practically every major Netflix India release. Here’s Aranyak, which came out a few weeks prior:
More examples would be welcome, but as far as non-English TV series are concerned, Aranyak and Yeh Kaali Kaali Ankhein are the only shows that even reached the Top 10 since July 2021, when Netflix first started publishing this information.
Films fare better on this front, with titles like Minnal Murali, Haseen Dilruba, and Mimi making top-ten lists even in countries without a strong Indian diaspora, like Argentina and Brazil. But they account for a much smaller share of watch time on the platform — India bucks the trend on this count, being one of the few countries where people tend to watch movies more than series.
Compare this to South Korea, where Netflix launched at the same time as it did in India, and the difference is stark: not only has the company seen immense success there locally, it has produced originals like Squid Game and Hellbound that, if not achieving unprecedented heights, are at least reaching top ten lists globally. Netflix claims to support over 16,000 jobs in the country and says it contributes $4.7 billion to the country’s economy.
So, what went wrong here?
Low on ambition
Korea may be a slightly unfair comparison given the extent of the country’s entertainment industry’s existing influence around the world. But that success is a double-edged sword, as it meant that Netflix had to work and compete with deep-pocketed studios and entertainment giants that already had a foothold. But they hit the ground running, and the results speak for themselves.
In India, though, the company’s ambitions were modest. It opened an office over a year after its launch in the country, and commissioned a very small number of originals years into their launch. (In fact, three of the titles Netflix announced in this period, Freedom, Crocodile and Again, seem to have been shelved by the company, with their writers’ IMDb pages showing no mention of these series. This has not been previously reported.)
Mint’s streaming TV critic Raja Sen told Entrackr that Netflix shows have frequently shown modest domestic short-term ambition. “Their products principally seemed tame, in comparison to the chances Amazon took, or Hotstar started taking; even a Sony LIV today seems more adventurous than Netflix.”
While making a Squid Game-like hit may not have been the most practical option they had from India, Sen conceded, they failed an even easier challenge: “If they would even have simpler, completely non-complicated, non-groundbreaking, but good content, if they did even that, they would have been on the right boat.”
Sen added that a host of other problems plagued the company’s content: namely, the fact that it gravitated towards established directors and stars instead of prioritizing writing, as is the case in other mature TV markets, leading to mediocre greenlighting decisions.
Ultimately, Netflix’s approach, it seems, has led to it systematically creating content that disappoints domestically and rings hollow internationally. “The benchmark always seemed to be, ‘this is good enough for India,’” Sen noted.
A Netflix spokesperson defended the company’s track record in a statement to Entrackr. “We are proud of what we have achieved in India since we launched six years ago,” the statement said. “Our focus is to entertain our members in India with best-in-class stories across different genres and formats – from drama to comedy, thriller to romance, fiction to nonfiction. We are also investing more in diverse stories in different languages.”
What Netflix needed was talent that knew how to make uniquely Indian content that could resonate internationally. That was certainly a challenge, but not one that Netflix was unaccustomed to in the 190 markets it operates in. In fact, it was the kind of challenge that Netflix was uniquely positioned to take advantage of, as there were no web series from India in 2016 that knew global success.
This would take building capacity among local storytellers for one, and executives who had experience greenlighting successful projects for another. Netflix squandered opportunities on both these requirements.
On building capacity among creators, the company doesn’t really focus on India. (Amusingly enough, the company announced earlier this week that it will give the “next generation of storytellers” from India 0.1% of a $100 million global fund for underrepresented creators to make films for Netflix India’s YouTube channel.) Sen said that when Netflix launched in India, the company did hold workshops for Indian creators, but it’s not clear whether these attempts have been part of any significant systematic effort.
And when it came to executives, the company faltered enormously and frequently. It pushed out Swati Shetty and Simran Sethi, Indian-origin content executives with an impressive track record, because both of them, months within each other, refused to move from Los Angeles to India to work on Indian originals. Within months of Sethi’s firing, the COVID-19 pandemic broke out, forcing most executives to work from home for years anyway. Sethi reportedly greenlit Delhi Crime, which won the International Emmy for Best Drama Series, the only Indian series to do so.
Predictably, this obstinacy didn’t serve Netflix well. After hiring a Mumbai-based executive following Shetty and Sethi’s dismissals, the company reportedly fired her after a three-year stint. This was the company’s highest-profile India dismissal to date.
The good news
Thankfully for Netflix, it is not too late for the company to reverse its fortunes. While competitors have undeniably amassed more subscribers than they have, success doesn’t currently mean much in India’s streaming space. Like startups in other tech domains, streaming services like Disney+ Hotstar, Zee5 and Sony LIV currently charge a pittance as a monthly fee, presumably hoping that somewhere along the line, habit formation will entice viewers to tolerate price increases. In fact, in terms of absolute revenue, Netflix pulls in a significant amount of money compared to competitors, by sheer virtue of its pricing:
During the fiscal year ended in March 2021, the entity Netflix India receives subscription revenue through recorded a 67.6% growth, booking Rs 1569.4 crore. However, the company has been posting losses overall, mainly due to costs related to content production and payroll.
Netflix’s prices, even after being slashed going into 2022, remain among the highest in India. And Indians remain unwilling, and in many cases, unable to foot these fees right now. Besides, ARPU from India would be so low compared to other markets that even when saturated, the Indian market would be of relatively diminished importance to Netflix investors for a few years at least.
So that brings us back to Netflix’s frustration. While the company spent years paying attention to prioritize domestic audiences over international success from India, it is not too late for it to reevaluate what succeeding in the country would actually look like, and play a long game that takes Indian storytelling — and the heights it could reach globally — seriously.
But the company is not exactly confused about its intentions, as much as they may thwart the global appeal of Indian content — making global stories is a secondary goal for the company. Bela Bajaria, the Indian-origin US executive who heads the company’s TV programming, said at an event last April, “For all of this local content, to be honest, the focus is always massive local impact, that’s the most important thing. And if it travels, that’s great, but we really want to make sure we are super serving the local audience.”
Update (February 4): This post was updated to reflect Netflix India’s financial reporting across another entity.