Netflix goes to 'Tollywood' and beyond for long-sought India growth
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[May 24, 2022]
By Shilpa Jamkhandikar
MUMBAI (Reuters) - In southern India,
devoted fans worship film and TV stars like gods, erecting huge statues
of actors which are bathed in milk as part of prayer rituals for a
movie's success.
This is the market Netflix Inc, a streaming laggard in India, is now
eager to tap. It has a range of Indian films across various regions to
showcase but for TV series - key to keeping viewers loyal to its
platform - it only has a few hit shows in Hindi and no TV shows at all
in regional languages.
The U.S. company has greenlighted at least six TV shows in southern
Indian languages this year, aggressively chasing deals in Tollywood as
the Telugu film and TV industry is known, as well as in the Tamil film
and TV industry, six people with knowledge of the company's plans told
Reuters.
As prolific as Hindi-language Bollywood and known for flashy,
action-packed content, the South Indian film industry is doing extremely
well of late, dominating India's box office revenue so far this year.
![](http://archives.lincolndailynews.com/2022/May/24/images/ads/current/humanesociety_sda022411.png)
Netflix has "had meetings with pretty much every producer and filmmaker
here. You will see the results of those meetings by next year," one of
the people, a Tollywood producer, said. All sources spoke on condition
of anonymity, fearing loss of work opportunities.
Netflix has long positioned India, with its population of 1.4 billion,
as a key market. In 2018, two years after it launched in the country,
CEO Reed Hastings predicted its next 100 million subscribers would come
from India. But so far it has just 5-6 million, according to analysts'
estimates.
By Hastings's own admission, Netflix has been frustrated by its lack of
success in India relative to its other markets. This new push south also
comes at a time when the search for growth has taken on new urgency.
The streaming giant stunned investors last month when it reported a
quarterly net loss of subscribers globally for the first time in more
than a decade, and predicted deeper losses ahead. Its stock has lost
almost half its value since then.
SMALLER THAN RIVALS
In India, Netflix outperforms rivals in terms of revenue share of the
subscription video-on-demand market, commanding 39% share in 2021
compared to nearest rival Disney Plus Hotstar's 23%, according to Media
Partners Asia.
But analysts say its subscriber base is too small for comfort. Next to
Netflix's 5-6 million, Disney Plus Hotstar, which owns cricket streaming
rights, has about 50 million. Local rival Zee5 has an estimated 20
million and analysts also gauge Amazon Prime and SonyLIV's subscriber
figures to be well above Netflix's numbers.
India's market potential "can't be understated," says Julia Alexander,
director of strategy at U.S.-based Parrot Analytics.
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![](../images/052422PIX/ent_a.15.jpg)
People walk past a poster of an Indian movie "Baahubali: The
Beginning" outside a movie theater in New Delhi, India, April 12,
2017. REUTERS/Adnan Abidi
![](http://archives.lincolndailynews.com/2022/May/24/images/ads/current/chuckglass_sda_SHG_2022.png) "If Netflix doesn't try to
capitalize on it by creating stronger relationships with local
creatives, local studios/production companies, and carving out a
real place for itself in India, someone else will," she said.
Asked by Reuters about criticism of its performance
in India and its push into regional languages, Netflix said in a
statement it was confident of what it called a "long-term winning
strategy in India".
"India continues to represent a tremendous opportunity for Netflix
to invest and grow, both in terms of membership and the variety of
content we offer to our members," it said.
A large part of Netflix's woes has been its much higher pricing in
an extremely cost-conscious market. It slashed fees late last year,
making it more competitive but remains much pricier than rivals.
It charges 649 rupees, roughly $8, per month for
its highest quality streaming resolution plan that allows use on up
to four devices. A similar plan from Disney costs 299 rupees.
Netflix's mobile-only plan for one device is 149 rupees for one
month, while Disney charges the same amount for three months.
Netflix's brand as a premium service may make it reluctant to cut
prices further but that means its best, if not only, path to
significant subscriber growth is expanding its slate of TV shows,
analysts say.
According to two Indian producer sources, however, Netflix tends to
take much longer than rivals to commission shows and is less adept
in providing feedback to content developers.
Netflix did not address this criticism in its response to Reuters.
Even with new southern Indian shows added to its pipeline, Netflix
still lags rivals. For example, Amazon last month announced 22 new
original TV shows, eight of them in Tamil or Telugu.
![](http://archives.lincolndailynews.com/2015/May/02/images/ads/current/guzzardo_lda022609.png)
"Netflix is behind compared to Amazon, Hotstar and SonyLIV because
it is still in the commissioning stage, whereas the others already
have shows out or on the verge of release," according to a producer
who said he was in talks with Netflix.
($1 = 77.7050 Indian rupees)
(Reporting by Shilpa Jamkhandikar in Mumbai; Additional reporting by
Nivedita Balu in Bengaluru; Editing by Edwina Gibbs)
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