 "Viu, Netflix make a play for eyeballs")
Barely three months into 2016, two global over-the-top (OTT) brands, Netflix and Viu, have pitched their tents in India, targeting the country's large but largely unorganised digital content market. The two have, however, set out on diametrically opposite highways to build up their subscriber bases. And, as they sweat it out, not only will internet viewing in India be subject to dramatic changes, it will also be closely scrutinised by global and domestic players looking for a slice of the same pie.
The two differ on pricing: Netflix has chosen to place its entire library behind a pay wall while Viu is opting for a dual pricing model where some shows and movies can be viewed free. Their content strategies diverge: Netflix says it will funnel its global content into India while Viu plans to invest in creating and sourcing local content for its platform. Netflix has trained its sights on the urban market where the viewer pays 'with a credit card' while Viu has its eye on the non-metro, mass markets.
To charge or not to
That India offers scale in terms of consumption is not a new story. However, given the limitations of telecom infrastructure and the willingness to pay, OTT players have refrained from putting all their content behind a pay wall. But, Netflix not only flew in the face of conventional wisdom and adopted a subscriber based model, it also significantly raised the fee.
Netflix offers a tiered pay model (members can join at Rs 500, Rs 650 and Rs 800 a month). Services vary according to the amount paid. "We try to keep prices around the world fairly consistent. New markets are priced starting at $7.99 per month or the local currency equivalent," explained the American giant. Prices are standardised, so a customer can access his/her account from anywhere in the world.
Viu, launched by digital media company Vuclip (based in California), follows a freemium model. Some content is free, but there is also a large part behind a pay wall. To access premium content (for example the latest blockbusters), users need to sign up with a flat fee of Rs 99 per month. Much like Netflix, there is a one month free trial period, but, there is no tiered pricing.
Arun Prakash, chief operating officer, Vuclip explains, "We are following a localisation and local content strategy for all the markets. For India, Bollywood is an important piece of content and so is music. This strategy applies to the pricing and will extend to original content as well, as and when we have it." While Netflix has made it clear that it is looking at the top five-odd per cent of consumers in India who are savvy with credit card transitions online, Viu wants to go mass, targeting larger volumes with smaller ticket sizes.
It's all about content
In India, digital viewership is still uncharted territory. Companies are grappling with the nature of content that ought to be broadcast just as much as how it ought to be sourced and accessed. Content planning and management forms the core of an OTT platform's business model and here, too, Netflx and Viu have chosen to go separate ways.
Netflix will bring to India the bulk of its international content - documentaries and movies licensed from studios and independent producers. In other words, it will not tailor or produce for the Indian market only. Its library is meant to appeal to a global audience. "Netflix is a curated service and as a global internet TV network, we are increasingly offering programming around the world simultaneously whether that's our original series or movies and titles we license from third parties. Many of our originals are licensed on a global basis and are available everywhere for members to watch," the company explains.
The value proposition created by Netflix is through its originals like Daredevil, House of Cards, Jessica Jones and Beasts of No Nation. The Bollywood and Indian shows catalogue consists of titles that have global appeal which may not include the latest blockbusters. "Why would an Eros or any other studio part with their blockbusters when they can out them on their own platforms? We understand that and so, we are focussed on acquiring content that will do well in multiple regions, including India," explained Jonathan Friedland, chief communications officer, Netflix in an interaction with Business Standard. In keeping with this strategy, the company plans to create original content out of India as well, but not only for Indian audiences.
Viu, on the other hand, is bullish on localisation. It has music videos, webisodes and movies from the Indian market, for the Indian consumer. It has also forged partnerships with top production houses and content owners such as Reliance Big Entertainment, Sony Music, Rajshri Entertainment, Shemaroo, Anand Audio and BBC Worldwide, among others.
An analyst observes, "The main difference in the two approaches stems from the companies' individual expansion strategy. Vuclip is taking it one market at a time, each being a focussed entry. Netflix, on the other hand, entered 130 markets at once. India was part of their bigger global expansion plan and, hence, their pricing and content will reflect that strategy." Over the next year and more, both approaches are going to be put to the test, but what both players will hope for is that the Indian viewer stays glued to the screen.
