Netflix India expansion is evolutionary

The entry of streaming pioneer Netflix in India is evolutionary in nature though its inaugural price is a bit on the higher side for what it offers, a leading US expert has said.

"I would say that the current price is a bit on the high side for what Netflix offers currently and it will have to keep increasing content quantity and quality over time to justify the price point," said Puneet Manchanda, a professor of marketing at the Ross School of Business at the University of Michigan.

His areas of expertise are business in emerging markets, business in India and strategy and marketing issues. Netflix's global expansion is driven by three forces, he said.

First, Netflix needs to convince investors that it can keep growing. With the broadband market size outside the US about six times the size of the US market, any significant growth in the future will come from large international markets such as India.

Second, a large global reach can be a strong bargaining chip for Netflix in obtaining distribution rights from content providers. Finally, Netflix's vision is to be a content provider itself - this expansion exposes a large part of the world to original Netflix content, he said.

"In terms of entering India, Netflix can quickly capitalise on a large English speaking market. But, for the Indian media landscape, the current entry is more evolutionary rather than revolutionary as the English speaking market already has access to a lot of Netflix's India content," Manchanda said.

However, if Netflix can crack the vernacular market eg by producing content in local languages with local talent, it has the potential to be revolutionary, Manchanda said.

On Wednesday Netflix launched its service globally, simultaneously bringing its Internet TV network to more than 130 new countries around the world.

"Today you are witnessing the birth of a new global Internet TV network," said Reed Hastings, co-founder and CEO of Netflix in a key note address at CES 2016 in Las Vegas.

However, Netflix will not yet be available in China, though the company continues to explore options for providing the service. It also will not be available in Crimea, North Korea and Syria due to US government restrictions on American companies operating there.

Since its launch in 2007, Netflix has expanded globally, first to Canada, then to Latin America, Europe, Australia, New Zealand and Japan. In India, the service will be available under three monthly packs - Basic (Rs 500), Standard (Rs 650) and Premium (Rs 800). Besides, users will get a month of free trial.