Netflix plans to spend more in India than the top four OTT players combined
At a press conference in New Delhi, Reed Hastings, Chairman, President and CEO of global OTT streaming service, Netflix announced plans to pump Rs 3000 crores on content in the Indian market.
He said, “This year and next year, we plan to spend about Rs 3000 crores developing and licensing content and you will see a lot of stuff hit the screens.”
That’s a lot of money, considering that Boston Consulting Group in its CII report found that the combined investment in original content among the top four Indian OTT players was about Rs 2000 crores.
Hastings’ announcement comes shortly after the Q3 earnings call made on October 16, where he remarked that “we've been very, very happy with the mobile plan. It's actually performing better than we tested.” This alludes to the Rs 199 mobile only plan launched by Netflix in India a few months back to drive up subscription.
While such a content budget might seem overkill, Ted Sarandos and Reed Hastings had stated in the earnings call that content investments that might have seemed insane 7 years ago are commonplace today. Sarandos report that in a period of a year, the cost of producing content has gone up by as much as 30%. Although, he admits that it is more of a range that varies from content to content.
He said, “The rumored $100 million that House of Cards invested would seem earth-shattering less than 7 years ago. Today, it represents about 1%of our content budget.”
Netflix is also betting big on movie content with a blockbuster line of up of films slated for Q4 2020 including Underground 6, The Irishman, Marriage Story, Dolemite, and The Two Popes.
According to Hastings, “movies are very valuable, people are used to paying for a lot of that.”
For Netflix, International markets represent 90% of the growth on the platform. India is an important market that has performed well in recent quarters earning as much as $ 65 million in March for the OTT giant.