A RESEARCH REPORT ON

NETFLIX INDIA

By Group 4

Submitted To: Submitted by:

Rohit Raj (2015173)
Prof. Ateeq Shaikh Rohit Trivedi (2015297)
Anchit Chhabra (2015264)
Vishal Rathi (2015317)

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Contents Page no

1. Abstract 4

2. Introduction 5

3. Review of Literature 11

4. Theoretical Framework 12

5. Methodology 15

6. Results 17

7. Conclusion and Discussion 27

8. References 30

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 Netflix India: Will it be a blockbuster or a mere pipedream?
Abstract
With the announcement of Netflix’s availability in India, it seems the whole viewer and
subscriber group has got divided into 2 groups. One group raises concern regarding its
success in India whether it will be a pioneer in the field of entertainment and online
streaming. Other group strongly advocates its presence and claims of being successful.
We are more interested in later than the former. In our research the success or failure
of Netflix has been rated on various parameters like its availability and accessibility,
pricing, content to watch, preference or choice to watch and potential rivals if any.

Based on the parameters we framed a no. of hypotheses. These parameters became our
foundation for research methodologies. Our methodologies included information about
target population, designing of questionnaire, the way how responses were collected,
their response rates, and sample sizes resulting from various decisions and finally
description and categorization of variables falling under each hypotheses. E.g. our target
population for the research were the people who had access to internet facility without
any hindrance and were able to use it, that means all people above the a g e of 15 years.
Out of 200 people as population size we took 100 people as our sample size to test
them. Then we conducted an online survey and asked the respondents a no. of questions
about their gender, annual income, their inclination towards watching movies on
Netflix, internet penetration in their city, their internet bandwidth speed, content to
watch etc. Those responses were captured via google forms and google spreadsheets.

We got plentiful responses as per the questions thrown by us. We analyzed those
responses and data through SPSS tool and obtained valuable results some of them were
really striking. Our key findings were:

1. paying for subscription of Netflix does not depend on Income.

2. Internet penetration in the city positively influences streaming content on Netflix.
3. Inclination towards Netflix does not depend on consumers’ internet bandwidth
speed.
4. The opinion on online piracy influences willingness to pay for Netflix
5. Inclination towards using Netflix services does not depend on age.

However, to our speculation that tastes and preference of Netflix customer should
depend upon his/her gender, the results obtained from SPSS analysis reveal that taste and
preference doesn’t depend upon the gender of a subscriber. That means whoever is
obtaining services from NETFLIX is not biased towards the contents offered by it. Both

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Men and women can have equal inclination towards the contents be it movies, songs,
videos, or any other TV serials, reality shows etc.

Introduction

Remember those wilting Friday nights when you had to nudge through a sea of Torrent
links to get find the right quality of your favorite American TV series or Hollywood movie?
We Indians are not pro-piracy only that we have no other but to download pirated content
of western entertainment content. But, gone are those days as we Indians can now watch
some of the most sought after shows at the same time when they get released in other parts
of the world.
Netflix has entered into the huge and promising Indian consumer market as it announced
its launch in February 2016.
Netflix is a US based web service that offers online streaming of varied entertainment
content. It was founded by Reed Hastings in 1997 as a DVD-by-mail business before
transitioning into a fully web based content provider in 2007. Netflix is mainly known for
its content catalogue which includes its original shows, full-length movies, documentaries,
and stand-up comedy specials and kids series. It now serves over 190 countries and is one
of the largest of its kind in United States.
Netflix boasts of some of the biggest blockbuster contents like House of Cards, Daredevil,
Breaking Bad and so on. Though Netflix was an overwhelming success in United States
and few other European countries, its business model is something India has never
experienced before. India being a diverse and unpredictable market, the strategies and
business models offered in other parts of the world need not necessarily pay off here.
Netflix has an in-exhaustive catalogue of entertainment content to choose from, however
it is dominated by western shows and movies which only a certain elite Indian consumer
class has a liking for.
This US-based Internet TV service arrival has generated a lot of buzz among consumers of
online video content. It has three subscription packages priced at ₹500, ₹650, and ₹800.
For the first month unlimited streaming has been offered for free. Its pricing was the key
issue in a country where users have free access to videos, even though some platforms do
offer the 'freemium' model with part free-part paid content.

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If we look at price arbitrage, the US cable TV ARPU (Average Revenue per User) is around
USD 80-100, while Netflix's subscription rates are in the bracket of USD 8-10. That is a
huge price arbitrage advantage that Netflix and other OTT operators had in the US. The
Indian cable TV market has one of the lowest ARPUs in the world. Netflix's basic
subscription plan is virtually double. Even if one takes in the premium HD packs of DTH
and cable companies, there is not really any price advantage or arbitrage. Also, when the
above pricing is seen in the context of high telecom data costs, it becomes another
challenge.
The OTT explosion in India is happening primarily on mobile, so long format consumption
at high data costs on mobile is a completely different paradigm here. Add to that the current
challenge of bandwidth, which can change a bit with 4G and fixed line broadband.
The objective of our research is to study whether this over-hyped launch of Netflix in India
will replicate its successful among our choosy Indian market or not. What factors affect
and impact Netflix’s success in the Indian market? Why or why not Netflix will fail here?
The research is important because we are doing a primary study on a new business model
in India, how our consumers will respond to this kind of an offering, its success or failure
factors and the implications on similar such models which may later enter Indian market.
Through the research we intend to explore various set of people living across the length
and breadth of the country and their consumption behavior. Surveying a sample set from
both urban and semi-urban class, the data would help us study in depth about various
empirical parameters. Our survey intends to prove and disprove several hypotheses about
reasons behind Netflix’s lackluster business in India.
Internet penetration in India is only 15.1% of the 1.25 billion population size we have. Our
research intends to explore how the low internet penetration in our country will severely
hamper Netflix’s business model of online streaming. It also will provide insight into every
respondent’s tastes and preferences when it comes to the content in such a streaming
service.
Moreover, we have tried to understand the respondents’ view on online piracy. Online
piracy is a rampant scenario in developing country like India. Most of the online content
watched by Indians are pirated ones. We have had paid subscription for downloading a
listening music online but have never so far been exposed to the concept of paid
subscription for a video content. The only video streaming service we Indians consume is
the YouTube channel. Therefore if given an option of a paid and copyrighted entertainment

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Content will the pirate driven Indian consumer class opt for such a service? Online piracy
hence can be a make or break for a business like Netflix.
Our survey questions are designed in such a way that all the assumed hypotheses will be
addressed and can be studied on research tools like SPSS. Using descriptive statistical
methods, we have performed a thorough analysis of all the parameters mentioned above.

Research Questions:
1. What are the various income groups who can afford Netflix subscription?
2. How does the internet penetration in the city influence the streaming content in Netflix?
3. How does the subscriber’s gender influence their tastes and preferences?
4. What are the different age groups that can influence Netflix services?

Research Objectives:
 Income group who can afford Netflix subscription.
 Internet penetration in the city influences the streaming content on Netflix.
 Gender of subscriber influences their tastes & preferences.
 Age group of subscribers influences the Netflix services.

Availability: Regular Download

Netflix is one of the genuine cross-platform video streaming applications that are currently
available worldwide. Subscriber can access this on an iPhone, iPad, Android smartphones
or tablet, Windows phones and tablets, on the web browser on a PC, Smart TV platforms,
Apple TV box, Sony PlayStation and Microsoft Xbox consoles as well as stream using a
Google Chrome cast supported device and Blu-Ray players. 1 subscription allows him/her
to access on any of these devices that he/she may own.

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Pricing: Variety of options

Netflix offers a multi-tier billing plan to Indian subscribers. If a subscriber signs up using
the web browser on his PC, he gets the option of three bill plans—Basic ₹500/month,
Standard ₹650 /month and Premium ₹800/month. The Basic plan enables streaming in
Standard Definition (SD) resolutions, on any one device at a time. The Standard plan offers
High Definition (HD) streaming, and simultaneous viewing on two screen. This is ideal
they plan to watch TV show on their phone while their parents/spouse enjoy a movie on
the Apple TV connected to their living room television. The P r e m i u m plan offers Ultra
HD (4K) content too, whenever available, and allows them to stream simultaneously on
four devices.

As a user, they can sign up for the service through their website, and use that ID and
password to sign in to the app on any other device later. However, if they directly want to
sign up for the service on their Android/iOS device, they have that flexibility too ie. pay
through the Google Play Store/Apple App Store respectively, and even use that ID and
password to sign in on other devices in the future. They get an access to the entire library
of content, be it movies or TV shows by paying one time fees.

However, if a subscriber signs up for Netflix in India using their iOS device there are
different tariff plans on offer. The payment is made through the Apple App Store, rather
than sharing their credit card details with Netflix. For SD streaming on screen there is a
basic “Netflix” plan that costs ₹490. After that Netflix 1 Screen plan (₹500 per month)
upgrades him to HD, but streams only on one screen at a time. The Netflix 2 Screens plan
(₹650) and Netflix 4 Screens plan (₹800) offer simultaneous streaming, and the top-tier
plan also offers higher resolution content.

Content: From movies to music

Based on localization aspect there are two parts to what Netflix has to offer in India. First
the content they offer in the US and other countries. This includes a massive collection of
Hollywood movies, TV shows from other studios and broadcasters, as well high grossing
TV shows that are Netflix Originals. Secondly, there is the local Indian content.

The Indian movies and TV category offers a lot of movies but no TV shows are currently
running on the popular Hindi general entertainment (movies and music) channels. Popular

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Bollywood movie includes current commercial movie like Piku, Lootera, Heropanti,
Youngistaan and even some backdated old blockbusters such as Andaaz Apna Apna, Hum
Aapke Hain Kaun and Shor in the City. There are hardly any recent releases, and the entire
library of India-centric content available is quite limited. It is expected that it will change
in the future, but at present, this shouldn’t be the only reason to sign up for Netflix.

The global content is in mess up shape, with a wide range of movies and TV shows. Since
we are active users of the US version of Netflix, we are quite impressed to see all of the
content we watch there is available on the Indian version also. Presently there is no
censorship on the International content in the Indian app, but that may change eventually,
the way movie channels on TV have to downgrade the c o n t e n t in terms of visuals and
language.

As a rule, Netflix is stronger with movies and documentaries in its pocket (while the likes
of Hulu and Showtime are much better if you are a fan of TV shows). However, the
exception to that rule is Netflix’s own TV shows and movies, called Originals which
includes the quite fantastic series like Narcos, Jessica Jones, Daredevil, Making of a
Murderer, Orange is the new Black, Sense 8 and Beasts of No Nation etc.

Potential Rivals

In India, we currently have Hooq (Hooq TV, available on Android and iOS; starting
at Rs.199 per month) which is fantastic for movie buffs and Ogle (Ogle. rocks; available
on Android, iOS, Windows @ ₹249 per month) which does extremely well with the latest
TV shows and is quite okay with movies. Besides that there aren’t many other options.
Google’s own Movies and TV app doesn’t really have much exciting content in India, and
neither does the Apple iTunes store. Star’s Hotstar is focused on certain TV shows, but
cannot be considered as a replacement for a full occupied TV connection.

Netflix became successful attributing to the factors like: broader selection of content from
the collection, multi accessibility from various devices like TV, personal computer and
smart phones, bandwidth availability in the host countries thereby eliminating the need to
visit a DVD store, etc.

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The arrival of Netflix in India might mean that rival video streaming services such as Hulu,
Showtime and HBO now might be forced to consider the Indian market sooner or later.
Hulu and Showtime have a massive library of TV shows, and add the latest episodes
instantly. HBO has some really diverse content too. But in reality, this might be presumed
as a tough task to accomplish. Apple Music being available in India (Android and iOS)
doesn’t force the likes of Spotify to respond.

At present, Netflix pricing in India is very similar to what they offer to US consumers. We
aren’t entirely sure if the Indian market is mature enough for those prices yet. Unless
Netflix becomes the hub of TV shows, true scenario will not c o m e into play, allowing
people to snip the cable TV or Direct-to-Home connections. Right now, it is the perfect
tool for a movie marathon on a mundane weekend.

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Review literature for Netflix in India.
Netflix is world’s top online streaming service provider that enables user to watch videos
and other contents on devices ranging from latest smart phones to smart TV’s. It can be
integrated with other electronic media devices like PlayStation, Xbox and Apple TV again
allowing users to stream directly onto large screen. Netflix is also the creator of a lot of
original made for the web content, much of which is now in high resolution ultra HD
quality
Netflix planned to block proxy access to censored/explicit content. As per this move
Netflix India’s subscribers wouldn’t be able to use proxy servers to watch content that was
not available in the country. Subscriber often used proxy servers that facilitated access to
internet content that was not available locally, to watch popular shows such as House of
Cards and Orange is the new black etc.
A spokesperson of company’s content delivery architecture once said,” If all of our content
were globally available, there wouldn’t be a reason for members to use proxies or
unblockers.” Netflix expected to use a safe strategy of clamping down on these proxies or
unblockers in upcoming weeks. The announcement came just a week after Netflix went
live in more than 130 countries, covering almost the whole world except China. It also said
that at the time that all of its shows would not be available immediately to subscribers in
certain countries, but that it was working towards resolving it. Basically the aim was to
provide a service around the world that is more similar that not. Using VPN’s or proxies to
virtually cross borders violated Netflix’s terms of use because of licensing restrictions on
TV shows and movies.
Netflix’s renewed focus on Indian market was driven by the fact that 4G was becoming
mainstream in the country, with Airtel, Vodafone and Idea already launching 4G services
and Reliance Jio offering the services to public by mid-2016. Also online video
consumption in India is growing enormously, this is evident from the fact that i n 2014,
Indian Internet users consumed 41 billion minutes of videos every month, which is 15,418
minutes of online video accessed per second. Overall, 46% of all a major chunk in Internet
consumption in India happens due to online video streaming and trade experts believe a
company like Netflix can’t afford to lose this opportunity. It is also obvious that slowing
growth in the US has put pressure on Netflix to grow internationally and India - with over
300 million Internet users and a potential 1.2 billion plus that could come online in the next
few years - is being seen as its next big growth market. Until recently, Netflix was available
in North and South America, Australia, New Zealand, Japan, and parts of Europe.
Currently, Netflix has 69 million paid subscribers from 40 countries with the US alone
responsible for 43 million customers. The $7 billion company with over 2000 employees
has devised major plans for 2016. Besides India, Netflix will expand massively in other

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Asian markets such as Hong Kong, Singapore, Taiwan and South Korea. As per various
reports, Netflix has borrowed $1 billion for its global expansion plans.

India, Nigeria, Russia and Saudi Arabia were among the 130 countries where the service
was launched last week. Netflix was launched in India on Jan 6 2016. The strategy was
simple that they had a responsibility to prompt owners to only show that content in the
geographies for which they have a license. Enforcing those restrictions was again Netflix
responsibility. With its initial run Netflix was successful in garnering substantial
popularity. Employed professional mostly residing in metro cities and age groups between
20-30 years contributed to its major subscriber chunk.

A Different Picture

However, everything is not as fancy as we think. The news about NETFLIX's plan to
invade India's internet market has already triggered huge rumors and speculations on social
media like Facebook and twitter t h a t the Company might violate the principles of Net
neutrality.
According to various reactions and comments on Facebook, Similar situations were also
observed in Australia and New Zealand, where Netflix has partnered with local ISP called
iiNet which has enabled them to offer their services at advantages that are not fair at all. At
a time, when Netflix is struggling to bounce back from it own crisis, for consumers this
can be an important factor to discard the service.
A popular Indian Daily reported that: “Netflix could enter India through a partnership with
a local telecom firm to take advantage of their 4G networks. This is the only logical route
for the company to take, and it is rooted in precedent. But it also comes at great price of
net neutrality violations. 0 ating harms other companies providing the same category of
service, like Google Play, Spuul, Zooq, Ogle, Eros Now, Hotstar, and several others that
aspire to provide streamed content. These services rely on an even playing field, and
Netflix partnering with a 4G network (most probably Airtel or Reliance Jio) deprives them
of that right. It also deprives customers of any other streaming service, as broadband caps
are low, and streaming movies and TV shows on mobile networks is unsustainable.”
The company however argues on the ground that they are committed to the principles of
strong net neutrality. But their view too is not unjustifiable as Netflix is known to support

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Net Neutrality in the US, where they propagated and shared the message of fair Internet. It
can be inferred from above that when it comes to non-US markets, Netflix’s stand and
behavior got completely changed.

Theoretical Framework
Null Hypothesis:

1. Paying for subscription of Netflix does not depend on Income.

2. Streaming content on Netflix does not depend on Internet Penetration in city.

3. Inclination towards Netflix does not depend on consumers’ tastes and preference.

4. Willingness to pay for Netflix does not depend on the opinion on online piracy.

5. Tastes and preference of Netflix customer does not depend on gender.

6. Inclination towards using Netflix services does not depend on age.

Alternate Hypothesis:

1. Paying for subscription of Netflix depends on Income.

2. Streaming content on Netflix depends on Internet Penetration in city.
3. Inclination towards Netflix depends on consumers’ tastes and preference.
4. Willingness to pay for Netflix depends on the opinion on online piracy.
5. Tastes and preference of Netflix customer depends on gender
6. Inclination towards using Netflix services depends on age

Dependent variables:

1. Paying for subscription of Netflix.

2. Streaming content on Netflix.
3. Willingness to pay for Netflix.
4. Tastes and preference of Netflix customers.
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 5. Inclination toward using Netflix.

Independent variable:
1. Income of the Indian Customer.
2. Internet penetration.
3. Domestic consumer’s tastes and preferences.
4. Online piracy.
5. Age & Gender

Hypothesis and its dependent and independent variables related to questions.

Hypothesis Dependent Variable Independent Variable

H1 Paying for subscription Income of customer.
Of Netflix. (Q.6) (Q.4)
H2 Streaming content on Internet penetration in
Netflix. (Q.8) City. (Q.7)
H3 Inclination towards Consumers’ tastes and
Netflix. (Q.5) Preferences. (Q.9)
H4 Willingness to pay for Online piracy. (Q.10)
Netflix. (Q.6)
H5 Tastes and preference of Gender. (Q.1)
Netflix customer. (Q.9)
H6 Inclination towards Age. (Q.2)
Using Netflix
services. (Q.5)

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 Methodology
A. The Target Population:

Netflix is a subscription-based film and television program rental service that offers
media to subscribers via Internet streaming and therefore, the target population for the
research were the people who had the ability and access to internet without any
hindrance. So, it basically included sets of people above the a g e of 15 years.
B. Designing of Questionnaire:

The questionnaire was designed in a way so that the impact of change in the dependent
variable can be mapped with a change in dependent variable. All the variables were
carefully included in the questions listed so that effective conclusions could be derived.

C. The ways how responses were collected:

A google form was floated in this regard and responses were then captured into
a
SPSS data sheet and then further analysis was
done.

D. Response Rates

The form was floated to a population of 200 people. We received a total of

103 responses.

E. Sample sizes resulting from various decisions

From 200 responses we took a sample size of 100 people with a total of 100
responses for our analysis purposes. The reason being 1st it was sufficient
enough to provide a detailed picture of the complete population regarding our
research. 2 ND with any data exceeding 100 our analysis might have become
tedious and cumbersome.

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 Summary of Variables:

Attributes Characteristics N % (Approx.)

Gender Male 68 66%
Female 35 34%
Age group 15-25 Years 51 49.5%
25-40 Years 43 42%
Above 40 Years 9 8.5%
Annual Income Below 2.5 Lakhs 11 10%
2.5-5 Lakhs 12 11%
5-10 Lakhs 23 22%
Above 10 10 10%
Not applicable 47 47%

Philosophy: Pragmatism
Approach: Deductive & Basic
Research Strategy: Multi-Way Strategy
Research Design: Cross-sectional and Experimental
Types of Research: Analytical
A Survey Instrument (questionnaire) will be developed with questions based on
consumer preferences for on demand entertainment services. Subsequently
questions about the different services and their priority would be evaluated. This
will lead to a hypothesis (e.g. Netflix will not succeed in India). The questions in
the questionnaire will seek to test these hypotheses. The questionnaire will be
distributed to a sample (to be determined) of households and young adults across
metro and non-metro cities.
Descriptive Sta ti st i cs a n d Inferential Statistics will use the SPSS software.
Statistical tests will be run to ensure that results reflect the actual consumer tastes
and preferences for such a new kind of service.

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Results

Descriptive Statistics

Descriptive Statistics
Std. Varian ce
N Mean Deviation
Gender 103 1.34 .476 .227
Age 103 1.59 .648 .420
Annual Income Inclination 103 3.68 1.423 2.024
towards watching movies & 103 2.83 1.248 1.557
serials on an online
streaming service like Netflix
Monthly payment for Netflix
subscription Internet
availability in your city 103 2.38 1.380 1.904
Your internet bandwidth
speed for streaming content
on Netflix Content you prefer 103 1.22 .504 .254
to watch on Netflix Your
opinion on online piracy 103 3.13 .936 .876
Valid N (listwise)

103 1.48 .917 .840

103 2.18 .872 .760

103

Inferential Statistics

Hypothesis 1.
Paying for subscription of Netflix does not depend on Income.
Result of Chi Square Test-

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 Case Processing Summary
Cases
Valid Missing Total
Percent Percent Percent
N N N
Annual Income * 103 100.0 0 .0% 103 100.0
Monthly payment for % %
Netflix subscription

Annual Income * Monthly payment for Netflix subscription Cross

tabulation
Count
Monthly payment for Netflix
subscription
Below 500 - Above Nothin
500 700 700 g Total
Annual below 2.5 3 1 1 6 11
Income LPA
2.5 - 5 LPA 7 2 0 3 12
5 - 10 LPA 10 4 0 9 23
Above 10 0 3 0 7 10
LPA
Not 24 7 0 16 47
applicable
Total 44 17 1 41 103

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 Chi-Square Tests
Asymp. Sig.
(2- sided)
Value df
Pearson Chi- Square 20.205 12 .063
a
Likelihood Ratio Linear-by-
Linear Association 20.052 12 .066
N of Valid Cases .612 1 .434

103
a. 14 cells (70.0%) have expected count less than
5. The minimum expected count is .10.

X2 (12) = 20.205, p=0.063

As p>α (0.05), Null Hypothesis is accepted.
Thus we can say that, Paying for subscription of Netflix does not depend on Income.
Hypothesis 2.
Streaming content on Netflix does not depend on Internet Penetration in city.
Result of Chi Square Test-

Case Processing Summary

Cases
Valid Missing Total
N Percent N Percent N Percent
Internet availability in 103 100.0% 0 .0% 103 100.0%
your city * Inclination
towards watching
movies & serials on
an online streaming
service like Netflix

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 Internet availability in your city * Inclination towards watching movies & serials on
an service like Netflix Cross tabulation

Count
Inclination towards watching movies & serials on
streaming service like Netflix
Least Less
interested interested Neutral Interested
Internet availability Widely available 19 11 25 21
in your city Available in specific 2 3 7 2
locations
Poor availability
1 1 2 0
Total
22 15 34 23

Chi-Square Tests
Asymp. Sig. (2-
Value df sided)
Pearson Chi-Square 4.921a 8 .766
Likelihood Ratio Linear-by- 6.102 8 .636
Linear Association .616 1 .433
N of Valid Cases
103
a. 10 cells (66.7%) have expected count less than 5.
The minimum expected count is .35.

X2 (8) = 4.921, p=0.766

As p>α (0.05), Null Hypothesis is accepted.
Thus we can say that, Streaming content on Netflix does not depend on Internet
Penetration in city.

Hypothesis 3.
Inclination towards Netflix does not depend on consumers’ tastes and preference.
Result of Chi Square Test-

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 Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
Your internet 103 100.0% 0 .0% 103 100.0%
bandwidth speed for
streaming content on
Netflix * Inclination
towards watching
movies & serials on
an online streaming
service like Netflix

Your internet bandwidth speed for streaming content on Netflix * Inclination towards w
& serials on an online streaming service like Netflix Crosstabulation

Countn

Inclination towards watching movies & serials on

a streaming service like Netflix
Least Less E
intereste intereste Neutral Interested in
Your internet d 2 d 2 0 0
Completely bandwidth speed
dissatisied for streaming 4 3 8 4
Dissatisfied content on Netflix
12 6 19 6
Neutral
2 4 6 9
Satisfie
d 2 0 1 4
Extrem
22 15 34 23
ely
satisfie
d
Total

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 Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 23.432a 16 .103
Likelihood Ratio 27.080 16 .041
Linear-by-Linear 7.484 1 .006
Association
N of Valid Cases 103
a. 17 cells (68.0%) have expected count less than 5.
The minimum expected count is .35.

X2 (16) = 23.432, p=0.103

As p>α (0.05), Null Hypothesis is accepted.
Thus we can say that, Inclination towards Netflix does not depend on consumers’ internet
Bandwidth speed.

Hypothesis 4.
Willingness to pay for Netflix does not depend on the opinion on online piracy.
Result of Chi Square Test-

Case Processing Summary

Cases
Valid Missing Total
Percen Percen Percen
N t N t N t
Your opinion on 103 100.0 0 .0% 103 100.0
online piracy * % %
Monthly payment
for Netflix
subscription

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 Your opinion on online piracy * Monthly payment for Netflix
subscription Cross tabulation
Count
Monthly payment for Netflix
subscription
Below 500 - Above Nothin
500 700 700 g Total
Your opinion on OK 12 5 0 14 31
online piracy Again 13 3 0 6 22
st
Neutr 19 9 1 21 50
al
Total 44 17 1 41 103

Chi-Square Tests
Asymp.
Sig. (2-
Value df sided)
Pearson Chi- 4.150a 6 .656
Square
Likelihood Ratio 4.504 6 .609
Linear-by-Linear .004 1 .947
Association
N of Valid Cases 103
a. 4 cells (33.3%) have expected count less than
5. The minimum expected count is .21.

X2 (6) = 4.150, p=0.656

As p>α (0.05), Null Hypothesis is accepted.
Thus we can say that, Willingness to pay for Netflix does not depend on the opinion on
online piracy.

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Hypothesis 5.
Tastes and preference of Netflix customer does not depend on gender.
Result of Chi Square Test-

Case Processing Summary

Cases
Valid Missing Total
Percen Percen Percen
N t N t N t
Content you prefer 103 100.0 0 .0% 103 100.0
to watch on Netflix % %
* Gender

Content you prefer to watch on Netflix * Gender Cross

tabulation
Count
Gender
Male Female Total
Content you prefer English movies & 50 26 76
to watch on Netflix series
Hindi movies & 5 8 13
series
Regional content 6 0 6
Others 7 1 8
Total 68 35 103

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 Chi-Square Tests
Asymp.
Sig. (2-
Value df sided)
Pearson Chi- 9.136a 3 .028
Square
Likelihood Ratio 11.027 3 .012
Linear-by-Linear 1.645 1 .200
Association
N of Valid Cases 103
a. 4 cells (50.0%) have expected count less than
5. The minimum expected count is 2.04.

X2 (3) = 9.136, p=0.028

As p<α (0.05), Null Hypothesis is rejected.
Thus we can say that, Tastes and preference of Netflix customers depends on gender.

Hypothesis 6.
Inclination towards using Netflix services does not depend on age.
Result of Chi Square Test-

Case Processing Summary

Cases
Valid Missing Total
Percen Percen Percen
N t N t N t
Age * Inclination 103 100.0% 0 .0% 103 100.0%
towards watching
movies & serials on
an online streaming
service like Netflix

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 Age * Inclination towards watching movies & serials on an online streaming
service like Netflix Cross tabulation
Count
Inclination towards watching movies & serials on an online
streaming service like Netflix
Least Less Extremely
interested interested Neutral Interested interested Total
Age 15 - 25 10 9 19 8 5 51
25 - 40 8 5 14 12 4 43
Above 4 1 1 3 0 9
40
Total 22 15 34 23 9 103

Chi-Square Tests
Asymp.
Sig. (2-
Value df sided)
Pearson Chi- 7.685a 8 .465
Square
Likelihood Ratio 8.397 8 .396
Linear-by-Linear .082 1 .775
Association
N of Valid Cases 103
a. 7 cells (46.7%) have expected count less than 5.
The minimum expected count is .79.

X2 (3) = 7.685, p=0.028

As p>α (0.05), Null Hypothesis is accepted.
Thus we can say that, Inclination towards using Netflix services does not depend on age.

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Conclusions and Discussions

The project had six null hypotheses, out of which five were accepted and one was rejected.
The topic of our study was that we were trying to find that whether Netflix would succeed
in India or not. As one of our hypotheses is rejected we can conclude that Netflix may not
succeed in India.
The hypotheses which are accepted are-
1. Paying for subscription of Netflix does not depend on Income.
2. Streaming content on Netflix does not depend on Internet Penetration in city.
3. Inclination towards Netflix does not depend on consumers’ internet bandwidth
Speed.
4. Willingness to pay for Netflix does not depend on the opinion on online piracy.
5. Inclination towards using Netflix services does not depend on age.

The hypotheses which is rejected is-

1. Tastes and preference of Netflix customer does not depend on gender.

Netflix may not succeed in India due to the given factors-

1. India has internet penetration of only 11%, a majority of which are either very slow
or have irregular service.
2. The bundled services provided by local cable operators and DTHs are cheap and
easily accessible as compared to the costs and technical specifications to access pay-
per-views on Netflix.
3. among the mobile phone user’s majority use basic feature phones generally intended
for mobile telephony. Also the high data charges additional to the cost of ordering
a show/movie on Netflix is a disincentive.
4. Most of the shows or movies are easily and available online through torrents and
otherwise.
5. Most of the Indian viewers have limited choices in terms of specialized entertainment
(generally hindi entertainment, movies, news and regional).

Other potential reasons that can lead to Netflix failure in India.

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Price
The U.S. cable TV average revenue/ user (ARPU) is around $80-$100 while Netflix’s
subscription rates are $8-$10. But at $4-$5 Indian cable TV market has one of the lowest
ARPUs in the world. Netflix’s basic subscription plan is virtually double at its current
pricing rates.

Data Charges
Telecom data usage rates are very high. In fact, some telecom firms are implementing a
model in which voice calls are free. Data is used to balance the talk times. Prices for voice
calls are very low. Tata DoCoMo e.g. has unlimited voice plans with free calls during the
period of the scheme which start at less than $3.

Delivery mechanism
Globally, Netflix consumption is higher through fixed broadband lines and larger screen
viewing at home. In India, it is primarily on the mobile. In fact, the entire digital boom is
completely mobile-driven implying even higher data costs.

Content
Netflix will need to focus upon its strategy whether to be a premium or niche market player.
If it is the former, the challenge will be to include a large amount of local content so as to
effectively compete with the Indian TV broadcast and movie industry; if the strategy is to
go on niche market, pricing plans may also n e e d to be reviewed as they are currently
higher when compared to the average television subscription or film ticket. Currently,
Netflix is offering three plans for India. The basic plan allows users to watch on one screen
and costs ₹500 ($7.40 at the current exchange rate of $1=₹. 67.59) per month. The standard
plan that comprises of two screens at the same time, is @₹ 650 and the premium plan for
four screens is @₹ 800.
U.S. companies at this point of time have earlier found they cannot take Western pricing
models and replicate them to India. Facebook’s second-largest market is India with 125
million users. Out of them, 114 million access Facebook through their mobile phones in
the year ended March 31, 2015, the social media giant saw witnessed India’s revenues
jump from 27% to $18.26 million and net income rose 33% to $2.4 million. However,

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Revenue per user was 15 cents compared to $10 in the U.S. If Netflix decides to cut its rates,
some local rivals may meet it head on. Viacom18 can pick up the gauntlet if it needs a
deep-pocket response; the company is owned by the wealthiest Indian Industrialist Mukesh
Ambani., Hotstar is part of Rupert Murdoch’s far-flung empire. Besides t h a t Hotstar is
free it offers a perfect blend of cricket and local content.
The cut throat competition offered by local as well as reputed Satellite TV channels and
Digital TV operators also serve as downgrading factor for Netflix success in India.
Majority of these sources are showing contents like regional TV serials, regional movies
,daily soaps which is unavailable in Netflix subscription packages planned for India. After
the complete digitization of existing Dish and Cable connection format in TV and other
broadcasting media, the penetration of these contents have become rampant across Indian
media and entertainment industry. Every one of them is offering 300+ channels ranging
from locals to national as well as international which Netflix might be unable to offer.

Popularity of Cricket and Cinema

India has a huge base of Cinema and Cricket fans and along with the recent formats of
cricket like T20 world cups a n d IPL the sports industry seems to have taken over the
Bollywood and other Music industry. Netflix might lack potential to change the entire plot,
provided it is able to source Indian content, price it right and manage the speed of delivery.
A small number would love the Netflix U.S. content, but the real disruption will need Made
in India, Made for India’ content. As per Netflix spoke person they are producing local TV
shows in Italy, Brazil, the U.K. and a number of other countries, and expect that list to
grow globally along with our service. They have also planned to spend about $5 billion on
programming rights in 2016 including many titles that will be exclusive to Netflix around
the world. However, content licensing has traditionally been very fragmented and
regionalized. It will take some time, several years at least, to get to an offering that is the
same everywhere.
Content matters a lot as it dictates strategy, consumer preference, their interests and likings,
pricing and positioning for the market etc. Local content providers can have a market in
rural as well as semi urban and urban areas but affordability remains an issue and would
require and out of the box thinking. The feeling of delivering service more than required
or extra will pave way for the prospect contenders. In addition, there are other basic hurdles
to cope with. One major issue is bandwidth availability. Different telcos. In India bid for
bandwidth war during Spectrum auctions for their telecommunication usages. For every

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Usage of Telecom network a separate bandwidth which is nothing but a range of a
frequencies(spectrum) is required by telecom operators eg. for making STD/ISD calls,
internet usage, video calls etc as per 2G/3G/4G services. Same things can’t happen with
Netflix as the chances are highly unlikely that it will be bidding with Indian Telcos giants
during spectrum auctions.

References:
http://www.livemint.com/Consumer/uzQvPnbuJXd20S0RQ6nXNI/Netflix-in-India-A-
long-way-to-go.html
http://www.hindustantimes.com/art-and-culture/here-s-our-complete-guide-to-netflix-in-
india/story-PozyGp83ZIEvpExwQzB7hK.html
http://indianexpress.com/article/technology/tech-news-technology/netflix-in-india-here-
is-how-it-will-work/
http://www.in.techradar.com/news/internet/This-is-how-Netflix-India-plans-to-compete-
with-its-competitors/articleshow/50533968.cms
http://tech.economictimes.indiatimes.com/news/internet/netflix-india-launch-plans-
report/50414294
http://www.thehindu.com/news/cities/mumbai/business/for-now-netflix-
clicks/article8091486.ece
https://in.news.yahoo.com/netflix-in-india--here-is-how-it-will-work-053347801.html
http://articles.economictimes.indiatimes.com/2016-01-20/news/69930999_1_netflix-
content-jonathan-friedland
http://www.afaqs.com/news/story/46789_Will-Netflix-change-the-way-India-consumes-
content?utm_source=dlvr.it&utm_medium=twitter

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