Netflix's Local Content and Pricing Woes Undermine Growth in India

Despite its global dominance, Netflix Inc NFLX faces significant hurdles in expanding its footprint in India. 

Despite reducing subscription costs, the streaming giant failed to make inroads in the populous country. 

Due to its extensive local content libraries and strategic partnerships, Netflix is lagging behind its competitors, with Walt Disney Co DIS Disney+ Hotstar and Amazon.Com, Inc AMZN Prime Video boasting larger subscriber bases.

Also Read: Netflix Faces Margin and Growth Equilibrium Challenges: Analyst

AllianceBernstein analysts highlighted that Netflix's subscriber base in India is approximately 6.5 million, dwarfed by Prime Video's 20 million and Disney+ Hotstar's 40 million. 

The firm's analysis indicates that Netflix's limited local content offerings and higher subscription costs, relative to the value provided, are significant factors impeding its growth in the region. 

Only 12% of Netflix's content caters to the local audience, compared to 60% of Prime Video's offerings, TechCrunch reports.

The streaming landscape in India is highly competitive, with platforms like Disney+ Hotstar leading the charge, thanks to their extensive local content libraries and live cricket streaming offerings. 

In contrast, Netflix's limited local content and higher subscription costs have hampered its ability to attract and retain subscribers.

Netflix attempted to bolster its presence by partnering with Jio Platforms, India's largest telecom operator, offering bundled streaming services with pay-as-you-go plans. 

However, this strategy has yet to yield significant results. In a market where the cost of linear TV and Internet video is relatively low, Netflix's value proposition is under scrutiny. 

In a market dominated by cost-effective and value-driven alternatives, the company's pricing strategy is a critical factor influencing its performance.

Disney's Hotstar continues to leverage its cricket streaming offerings to maintain market dominance. Similarly, JioCinema is adopting Disney's strategy of acquiring high-profile cricket match rights to enhance its competitive edge. 

Price Action: NFLX shares traded lower by 0.09% at $372.25 premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.