Netflix Switches On in India, But the Picture is a Bit Fuzzy

India’s black market for movies and TV shows just got its biggest competitor: Netflix, the online video streaming service that has revolutionized the entertainment industry in Western countries, just opened shop in India.

At a press conference in Las Vegas on Wednesday, the company’s Chief Content Officer Ted Sarandos announced that the streaming service would be entering almost every country in the world “except China”.

“Right now we are in 60 countries. When I travel, the number one question I get is ‘When is Netflix coming here?. People want to see Narcos. People want to see Jessica Jones. Today I am delighted to announce that while we have been here on stage at the Consumer Electronic Show, we have switched on Netflix in India and 130 other countries,” Mr. Sarandos told a packed audience.

Netflix currently offers a one-month free trial to its Indian users. After that, consumers will have to choose between three monthly packages. As seen below, the cheapest package starts at Rs. 500 per month but does not include the ability to view content in high-definition (HD) or ultra high definition quality (Ultra HD). The Rs. 650 and Rs.800 per month packages offer greater video quality and the ability to access Netflix on more than one screen.

Should you sign up?

The biggest question of course is: Is subscribing to Netflix India worth it? Leaving aside for a moment whether Indians can kick their piracy and torrent habit, is it worth shelling out a minimum of Rs. 500 to gain access to Netflix India’s catalogue?

Right now, by The Wire’s reckoning, Netflix has close to 80 Indian movies and TV shows. A vast majority of these are North Indian and specifically Hindi-language movies. While a few South Indian movies are available (Tamil: Mani Ratnam’s O.K Kanmani), the skew is clearly in favour of the Bollywood movie industry.

Although the exact number of titles available for Netflix India users still hasn’t be released, a quick perusal by The Wire shows that the Indian catalogue is currently lacking when compared to its U.S or Canada counterpart. While most of Netflix’s original shows — such as Narcos, Marvel’s Daredevil and Jessica Jones, and Master of None — are available, some of the more well-known TV shows that are cult classics in India such as Friends are currently not available. One of the more glaring omissions with regard to Netflix’s original content is the Kevin Spacey-hit House of Cards. That US political drama  is conspicuously absent from Netflix India’s current library because, as a number of people have pointed out, the company has sold the rights for India distribution to the Zee TV network.

While there is more than enough to entice customers to sign up for the one month free trial, what is truly important is how quickly Netflix is able to bid for titles that are part of its global catalogue and add them to their India country-specific selection. Adding more titles over the next six months is vital.

What is equally important is to see how India and Asia fit into Netflix’s plan to produce original content as a means of attracting users to its service. Over the last few years, Netflix has quickly pivoted its business model. The company realized that it no longer makes financial sense to pay enormous sums of money to television networks and movie studios to gain online distribution rights: entertainment and media companies are quickly wisening up the power of online streaming and refusing to renew contracts with Netflix. Netflix’s aim therefore is to beat TV networks and movie studios at their own game by producing must-see content.

While Netflix may yet plan to produce India-specific content, there doesn’t appear to be anything announced during its launch today (although the company is planning a press conference later in the day today). In India, comedy groups such as All India Bakchod have started venturing into full-scale local content production: the troupe recently signed a deal with television network Star World to produce and air a comedic news show that tackles issues of national and local interest. This is exactly the type of content that Netflix should seek to fund and produce in India as a means of giving the highest bang for the buck for its Indian users.

When reporters asked Netflix CEO Reed Hasting however when global viewers would see an explosion of local content, Mr. Hastings pointed out that they were first focused on sharing global stories and global titles.

Will Indians with slow Internet speeds and small data caps be able to use Netflix?

This is the million-dollar question that will decide the success or failure of Netflix within the country and indeed the fate of online streaming as a whole in India. Slow Internet speeds and small data caps (also known as ‘fair usage policy’  limits) have limited the growth of movie and TV show streaming in India. Start-ups such as iStream which have tried to crack the on-demand video market have failed miserably.

For instance, Netflix recommends that its users need a minimum of 0.5 Megabits per second for broadband connection speed and an Internet speed of 5 Mbps if users want to stream movies and TV shows in HD quality.

When it comes to data usage, Netflix currently offers four different types of data usage: low (0.3GB used per hour), Medium, (0.7 GB per hour) and high (up to 3GB per hour for HD quality video streaming).

This means that people with an Internet connection speed of 1Mbps or 2Mbps and with a data cap of 40 to 50 GB — which is roughly the average in India — will find it difficult to use Netflix heavily. Watching a handful of movies and TV shows could eat up a little over half of a user’s data cap, make them quickly hit their FUP limit, and have their Internet speeds reduced to a piddly 512 Kbps.

One of the ways the company may seek to get around this is by tying up with specific Internet service providers and certain Indian telecom companies to come out with specific “Netflix-data” packages that allow users to pay a set amount per month in exchange for Netflix usage not affecting their data caps. The Hindu Businessline recently reported that Netflix was planning to do just that. However, if this does go through, and Netflix usage doesn’t affect the data caps of Indian Internet users, this would be a violation of net neutrality — the concept that all data should be treated equally.

How this plays out will be crucial to Netflix’s success in India. The company is planning a press conference with Indian journalists in Las Vegas later today and The Wire will update as the news slowly trickles out.

Will Netflix be able to force Indians to stop pirating?

Perhaps the biggest hurdle that online streaming faces is whether it can get Indians to give up illegal means of accessing and consuming movies and TV shows. India is a well-known haven of online piracy: several estimates show that the Indian piracy industry earns almost just as much as the legitimate domestic movie industries.

The prevalence of online piracy in India stems from the fact that viewers don’t have many options : global movies are often released much later in India, certain movies are banned due to local religious and cultural reasons, and Indian movie studios refuse to acknowledge the implications of the Internet with regard to content distribution.

As always, it becomes a question of opportunity cost: a majority of Indians undoubtedly believe that with data caps of up to 100 GB, it’s supremely easy to log onto an illegal torrent website and download their favourite movies and TV shows for free. Netflix and the online streaming industry has to compete with that; to show Indian consumers that logging onto the website and picking a movie to quickly stream is much better than rummaging through a number of ‘CAM RIP’ and ‘DVD RIP” torrents.

What may sway the balance in favour of Netflix and other video streaming websites is the process of discovery. How will Indians find the best movie and TV shows? While big hits such as A Game of Thrones are social media sensations and easy to identify, as Indians slowly start exploring their niche interests, they may find that online streaming companies and not torrent websites offer a better answer.