Moneycontrol Bureau
The, otherwise, small on-demand video service market may get shaken up as world’s top video streaming service forays into India. Opening a whole new basket of international content to Indian viewers, Netflix is launched in India giving a tough fight to Hungama, HOOQ, Star's Hotstar, ErosNow and Singapore-based Spuul. Netflix provides content to smart TVs, smartphones, tablets, PCs, Playstation, Xbox with an active internet connection. Data consumption while using Netflix has to be paid separately to the internet service provider and is not covered in Netflix’s subscription charges.
So, should Indian direct-to-home (DTH) and TV industry develop cold feet now?
Not really, say analysts who think pricing may give a competitive edge to Indian peers on domestic grounds. More than anything else, Indian users are still tackling with bandwidth issues.
Edelweiss
does not expect Netflix to have any major impact on Indian DTH and cable TV players. It says that Netflix’s rates are on higher side and broadband speed will also be a challenge. It adds that Netflix rates are almost two-three time higher than prevailing cable TV/DTH rates and its content will attract only a niche audience.
Pricing of Netflix India starts at Rs 500 per month for its entire library but in standard definition format and with only one concurrent user at a time. Its Rs 650 per month plan offers high definition (HD) format and two concurrent users at the same time, while the Rs 850 per month plan offers 4K quality content and four concurrent users in the same login. The first month is free as it is the trial month. As of now, Netflix accepts payments only through debit and credit cards and with time, but IDFC expects it to tie up with telecom companies and payment wallets to increase its target base.
IDFC also thinks pricing will be an issue for Netflix and it will be able to target only premium customers.
Currently, the online video market in India is dominated by Youtube (Alphabet) and HotStar (Star India), which are free for users but contain advertising.
"Netflix is almost 1.7x-10x costlier than other subscription-based, India focused offerings. English entertainment (movies included) contributes just 1.1 percent (source: TAM 2014) to overall viewership share and less than 5 percent to TV industry ad revenues (industry sources) and hence, the Netflix launch at such a high price point will have limited or no impact on Indian television." IDFC says in a report.
However, according to IDFC, Netflix entry is likely to accelerate growth of short-form online video in India but real growth of subscription led long-form online video will be heralded by increasing wireline broadband infrastructure. IDFC also adds that, in India, average TV average revenue per user (ARPU) is Rs 200 per month and the cheapest subscription led online video application, Eros Now, costs Rs 50 per month. Hence, cost saving will not be very high in case of cord cutting; moreover, TV’s serialized content is quite different from Eros Now, it adds.
IDFC believes that both online video and TV will continue to grow together and co-exist. The brokerage has maintained outperform rating on Zee Entertainment,neutral on Dish TV and Hathway Cable and underperform on Sun TV Network and Den Networks.
Agrees Religare that pricing of Netflix is very high for a competitive market. It believes that content owners with scope for IP monetisation will gain from Netflix launch. According to Religare, Shemaroo will stand to benefit if it signs a deal with NetFlix. Shemaroo’s new media segment has grown at 80 percent for the past two quarters and the brokerage retains a buy rating on the stock. Religare sees strong internet TV-led media consumption in India driven by growing smartphone penetration and improving bandwidth.
"While Netflix’s pricing at Rs 500 per month is expensive for the Indian market, the entry of multiple distribution platforms will continue to fuel demand for local content," it says in a report. Shemaroo is its remains our top pick in the pure content space.
In 2016, the company plans to release 31 new and returning original series, two dozen original feature films and documentaries, stand-up comedy specials and 30 original kids series. Netflix’s popular and award winning shows include Orange is The New Black, Narcos and Daredevil. Only Kevin Spacey-starrer House of Cards is unavailable due to Zee Café holding territorial digital rights. It also offers 79 Bollywood movies.
Resource : http://www.moneycontrol.com/news/business/should-tvdth-players-fretnetflix-india-launch-not-really_4925121.html
The, otherwise, small on-demand video service market may get shaken up as world’s top video streaming service forays into India. Opening a whole new basket of international content to Indian viewers, Netflix is launched in India giving a tough fight to Hungama, HOOQ, Star's Hotstar, ErosNow and Singapore-based Spuul. Netflix provides content to smart TVs, smartphones, tablets, PCs, Playstation, Xbox with an active internet connection. Data consumption while using Netflix has to be paid separately to the internet service provider and is not covered in Netflix’s subscription charges.
So, should Indian direct-to-home (DTH) and TV industry develop cold feet now?
Not really, say analysts who think pricing may give a competitive edge to Indian peers on domestic grounds. More than anything else, Indian users are still tackling with bandwidth issues.
Edelweiss
does not expect Netflix to have any major impact on Indian DTH and cable TV players. It says that Netflix’s rates are on higher side and broadband speed will also be a challenge. It adds that Netflix rates are almost two-three time higher than prevailing cable TV/DTH rates and its content will attract only a niche audience.
Pricing of Netflix India starts at Rs 500 per month for its entire library but in standard definition format and with only one concurrent user at a time. Its Rs 650 per month plan offers high definition (HD) format and two concurrent users at the same time, while the Rs 850 per month plan offers 4K quality content and four concurrent users in the same login. The first month is free as it is the trial month. As of now, Netflix accepts payments only through debit and credit cards and with time, but IDFC expects it to tie up with telecom companies and payment wallets to increase its target base.
IDFC also thinks pricing will be an issue for Netflix and it will be able to target only premium customers.
Currently, the online video market in India is dominated by Youtube (Alphabet) and HotStar (Star India), which are free for users but contain advertising.
"Netflix is almost 1.7x-10x costlier than other subscription-based, India focused offerings. English entertainment (movies included) contributes just 1.1 percent (source: TAM 2014) to overall viewership share and less than 5 percent to TV industry ad revenues (industry sources) and hence, the Netflix launch at such a high price point will have limited or no impact on Indian television." IDFC says in a report.
However, according to IDFC, Netflix entry is likely to accelerate growth of short-form online video in India but real growth of subscription led long-form online video will be heralded by increasing wireline broadband infrastructure. IDFC also adds that, in India, average TV average revenue per user (ARPU) is Rs 200 per month and the cheapest subscription led online video application, Eros Now, costs Rs 50 per month. Hence, cost saving will not be very high in case of cord cutting; moreover, TV’s serialized content is quite different from Eros Now, it adds.
IDFC believes that both online video and TV will continue to grow together and co-exist. The brokerage has maintained outperform rating on Zee Entertainment,neutral on Dish TV and Hathway Cable and underperform on Sun TV Network and Den Networks.
Agrees Religare that pricing of Netflix is very high for a competitive market. It believes that content owners with scope for IP monetisation will gain from Netflix launch. According to Religare, Shemaroo will stand to benefit if it signs a deal with NetFlix. Shemaroo’s new media segment has grown at 80 percent for the past two quarters and the brokerage retains a buy rating on the stock. Religare sees strong internet TV-led media consumption in India driven by growing smartphone penetration and improving bandwidth.
"While Netflix’s pricing at Rs 500 per month is expensive for the Indian market, the entry of multiple distribution platforms will continue to fuel demand for local content," it says in a report. Shemaroo is its remains our top pick in the pure content space.
In 2016, the company plans to release 31 new and returning original series, two dozen original feature films and documentaries, stand-up comedy specials and 30 original kids series. Netflix’s popular and award winning shows include Orange is The New Black, Narcos and Daredevil. Only Kevin Spacey-starrer House of Cards is unavailable due to Zee Café holding territorial digital rights. It also offers 79 Bollywood movies.
Resource : http://www.moneycontrol.com/news/business/should-tvdth-players-fretnetflix-india-launch-not-really_4925121.html
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