ABSTRACT

Netflix entered India and 129 other countries on January 6, 2016, with the aim of expanding its
customer base. With this project we want to understand the reasons for the low enrollment rate and
recommend ways to ensure better growth. Through a literature review, we have identified various
factors that affect Netflix subscriptions in India. Once we have identified the necessary factors to
consider, we have made a statement of the problem. We have developed a practical and experimental
research design in principle. Population research has shown us many quality factors that can affect
enrollment levels. We also constructed a quantitative model in which we took 11 independent variants,
analyzed the features and developed 4 variables in which we made multiple regressions to identify the
descriptive power of the elements in the enrollment ratings. We have presented the administrative
implications of our project which identified price, lack of regional content, payment options available as
major contributing factors to low Netflix subscription rates in India.

. INTRODUCTION

Online streaming is becoming more and more popular every day. It makes access to digital content,
whether videos or audio, fast and easy. While streaming content, the user is not required to download
the content but can view it online. All the user needs is a good internet connection and a good service
provider. That’s where Netflix comes in. Netflix is among the various service providers that offer
unlimited access to content at a fixed monthly fee. Netflix is an American entertainment company
founded in 1997, in California by Reed Hastings and Marc Randolph. Its main function was to rent DVDs
by mail. Its main focus shifted to much-needed online video in 2007. Although DVD sales declined
sharply, Netflix began to grow significantly. Netflix is one of the most successful dotcom programs. The
company first expanded to Canada in 2010, then moved to Latin America in 2011 and parts of Europe,
including the United Kingdom, Ireland, Sweden, etc. in 2012. Finally, in 2016 it entered India in January.
Netflix is not available worldwide except for Mainland China, Syria, North Korea and Crimea. Netflix
supports 18 user interaction languages and customer-related support objectives. In the first quarter of
2012, Netflix had nearly 29.4 million subscribers. This figure has only been growing. As of the third
quarter of 2016, Netflix has 86.74 million subscribers. What makes Netflix stand out among its
competitors is its original content. Netflix's original refers to content that is produced, co-produced, or
distributed exclusively by Netflix. Its original content includes shows such as House of Cards, Orange
New Black, Jessica Jones, etc. Netflix was launched in India on January 6, 2016. Initially, it saw great
excitement among the people. Many people have signed up to try this much-anticipated service. But as
the months pass or as soon as the free trial ends, people withdraw from the service list. Monthly
payment starts at ₹ 500 and goes up to ₹ 800 with a four-screen entry option. The subscription rate is
much lower than they expected. With this study we aim to understand the various factors that affect
Netflix's low subscription rate, in India.

1) Netflix late entry

When Netflix entered India in January 2016, there were services such as: Hotstar, Ditto TV, Voot etc.
They all work in the freemium model. Hotstar, owned by Star India, has been (by) the current market
leader. Contains TV content from Star channels only. Most of them are provided free of charge. Star
India also owns cricket broadcasting rights in India. Cricket is the most watched game in India and is
offered at Hotstar for free (with 5 minutes delay). Premium services cost R200 / month. Leading services
include live sports streaming, access to the latest selected movies and programs and access to about 45
original HBO shows. Popular shows like Game of thrones, Modern Family etc. talk shows like last week
Tonight are available to premium subscribers. In addition to what it offers, Hotstar offers shows in 10
languages. Voot, owned by Viacom 18, broadcasts reality shows such as Big Boss and TV channels of the
popular Colors channel. It also allows the streaming of selected movies for free. Compared to Hotstar,
Ditto TV and Voot offer almost all TV shows and movies for free.

2) Price problems In the US, lunch costs are $ 10 and Netflix charges $ 7.99 / month. In India, Netflix is
introduced at ₹ 500 / month, which is about the same as US prices. The per capita income in the US is 17
times that of India. Indian per capita Income is as low as l 1 lakh and in urban areas. Pay-TV median
options start at ₹ 100 / month. Access to Smart TV sets is very low in India. In addition, Hotstar charges ₹
200 / month for the latest movies and TV content for the most watched as well as 45 HBO original
games including the "Throne Game". Local content creation Netflix TV content and English movies from
the USA or UK. Huffington's post quoted in their Netflix article in India, "Netflix has only 3% of Bollywood
top 100 movies while Spuul and Hooq came up with 25.3% and 21.2%. No prizes to guess which
Bollywood aficionados at the time of launch, at the time of launch, only 93% of Netflix US titles were not
available in India.Some competitors are very regional / national content and have popular English
content.

3) Free quality content available Indian Entertainment Networks have moved to an ad based YouTube
model. The popularity and quality of web-grown web series has grown tremendously. Other web series
such as "Sit Down", "Pitchers" are among the most popular TV content on the Internet. This content is
currently provided free of charge on YouTube.

4) Internet bandwidth problems Only 34.2% of Indians currently use the Internet. Internet streaming
leads to complex data usage and requires high data speed to stream shows efficiently. India is ranked
114th in the world in terms of internet speed. India speeds have increased this year as the minimum
internet speed was increased to 1 Mbps by the Government. Of the 450 million users, 370 million are
mobile internet users. Mobile internet packages are limited and India has a few Free Wi-Fi hotspots.
Voot started with a data saving mode that allows users to watch video on slow networks such as 2G.
Paying for internet and Netflix separately makes it more expensive for Indian customers.

Gap Identified

Not much time has been spent since Netflix was launched in India near 130 countries on January 6,
2016. As a result, there is not much research or articles affecting Netflix subscription features available
for use. Although, based on Netflix's low subscriptions 11 months ago, articles in the form of criticism,
and reflections on Netflix's future in India and South Asia have been featured in numerous newspapers
such as the Wall Street Journal, The Indian. Express, Inside IIM, etc. The authors are very much focused
on the future strategies of Netflix or any other Internet Content Service, say, Amazon Prime Video must
choose within India in order to be successful. Also, the study articles are published on silos taking the
author's ideas and considering the possible bias in the study. This study aims to identify these gaps in
order to identify all the factors that contributed to Netflix's low subscription rates in India. This study will
help us to explore the reasons why a giant like Netflix, who has enjoyed great success in Western
countries like the US. We will list all the features identified in the silos from the literature review (e.g.
values) and combine them to identify the main factors that contributed to the cause. Also, it will help
Netflix to focus on the essentials needed for success in a country like India where people are very
worried about the money they spend on such things especially when the content is available online for
free. Also, India's demographic dividend is huge and offers tough times for online content providers like
Hotstar, Amazon Prime Video, Netflix, etc.

Objectives

Hypothesis

Methodology adopted

For details on the problem statement, it is important to have a strong research approach. First and
foremost, this type of research needs to be identified. Since the focus is on Netflix only and its low
subscription, the type of research is Applied Research. We are trying to find reasons for the low
enrollment rate in India through Experimental Research. We used both primary and secondary data for
the purpose of this study. Secondary data is found in business headlines and reports available online.
Basic data, both a type of quality and quantity data obtained through focused group discussions and
extensive online research The hypothesis originally developed needs to be tested. This can be done by
using the data collected through the questionnaire. The list of questions we have prepared floats for
clients we know, at SPJIMR and beyond. The survey is designed to commemorate the following issues

• Misunderstanding - Questions are designed to address the issue of ambiguity. This included having
well-defined options. Also, we did an exploratory survey and it helped us improve the language of the
questions further.

• Completion time - Initially, we inform respondents of the expected time it would take to complete our
survey. We have seen that a long survey is annoying and excludes respondents which is why the
response rate is disturbed. Therefore, we have tried to make the survey as complete and concise as
possible.

• Frequently Asked Questions - We avoid asking the same questions over and over again. This reduced
incidents of non-completion and ensured that respondents were not annoyed when completing the
survey.

• Right scale - We used a 7-point Likert scale in our study. We wanted to confirm the correct answers
and did not want to force the respondents to make a decision or stand. They were free to maintain their
neutrality if they wished

• Order questionnaire - We started the survey with basic profile questions to make the respondent
respond less to the most important questions. Also, we categorized the survey into different categories,
for users, non-users, etc. in order to show only relevant questions to any particular respondent. Also,
questions should follow a logical flow. We have tried to ensure that the previous question is linked to
the next.