On the backburner: Here's why India doesn't have Netflix or Spotify yet

Update: This article has been updated to include the launch of a new streaming service, Ogle, with additional quotes from Amlan Mohanty.

Netflix is the one of the most popular destinations for streaming TV episodes and movies on TVs, desktop and mobile devices. All you need is a subscription to binge on umpteen TV shows and movies without ever having to stop. According to a recent report, Netflix accounts for a massive 35 percent of US Internet Traffic.

In India, a country that’s starved of decent entertainment options, a service like Netflix would be a godsend. You can gorge on your favourite TV shows whenever you want to and no longer need to illegally download shows from the Internet, buy pirated DVDs or be obliged to watch pretentious saas-bahu sagas. Imagine a world where your happiness isn’t dictated by the mood swings of your cable-controlled set-top-box or the shoddy picture quality of broadcast television, which they like to call HD.

We could go on whining about the lack of a decent online streaming service India, but the fact remains that Netflix and many other popular streaming services such as Spotify, continue to give the Indian audience a miss. While there are ways to work your way around this (using Virtual Private Networks), there’s nothing like being able to utilise this service legally.

Licensing costs

So why not India? The reasons for Netflix and other popular streaming services not coming to India are plenty, the main one being the licensing costs involved in being streamed in a different country.

Note that for a TV show to be made available in a country, whether online or through a TV channel, the producer of the show would have to sell its rights to a TV channel in that country. The provider (in this case Netflix) itself is legally bound to broadcast the content only within its territory. So if Netflix has to come to India, it can’t run US shows unless the producers of the shows sell online rights to Netflix.

Sling New Devices

Amlan Mohanty, ex-analyst of SpicyIP, explains that “for Indians to be able to legally stream shows online, there must either be an offer by an Indian television network that wishes to purchase the rights to the show, or a network from another country that wishes to allow the show to be streamed in India.” However, a license acquired by a US network allows them to stream shows only in the US, so the second option is not legally permissible.

He further adds, "I don't think Netflix looks at India as a priority at the moment. Copyright licensing can be a difficult proposition, even in
the case of compulsory licensing schemes that Pandora and other internet radio stations use to be able to expand their database. So broadly speaking, it is a combination of business strategy and complications in the Indian licensing regime. That said, there are some interesting local
enterprises such as Ogle, which look promising."

Ogle is new streaming service that has launched in India, which claims to bring unlimited streaming of popular TV shows, music and movies.

So why can’t producers of foreign shows sell online rights in India? According to Craig Engler of boingboing.net, most producers would not do that because “it will hurt their chance to sell the TV rights later on.” As licensing costs for TV are higher than those for online, producers won’t be able to successfully run a popular show on Indian TV in the future, if many have already watched the show online.

Cultural diversity

If providing many international shows in India isn’t realistic, why can’t Netflix provide a mix of local and international content?

It’s a valid argument and is, in fact, possible. But consider this. India caters to a vast demographic with an abounding volume of movies and TV shows that run in different languages. Even if Netflix does come to India, it’s unlikely that it would single-handedly be able to acquire the rights from each and every producer of these shows to be able to reach such a vast audience. Also, it’s highly unlikely that a substantial portion of the masses would be willing to pay a premium to watch local content on Netflix.

The same is the case with movies. India is said to produce more movies in a year than any other country in the world. Buying rights even for the most popular movies of this lot would be daunting.

Lack of Internet infrastructure

Even as the country is fast developing its internet infrastructure, not many enjoy Internet speeds over 2Mbps, which isn't ideal for running streaming services smoothly enough. To add to it, Internet penetration in India is considerably low at just 19.19%, making the service limited to a certain section on the population.

Internet penetration india

Image: Internet Live Stats

 

Thankfully, mobile infrastructure in India is rapidly catching up. Thanks to the availability of low cost smartphones and the increasing penetration of mobile broadband, India is set to overtake the US as the second-largest Internet user base in the world. This should bring some hope for Netflix to enter the country in the near future, where users can stream content on mobile devices.

Till then, we can only hope and wait.


Published Date: Nov 26, 2014 11:38 am | Updated Date: Nov 26, 2014 11:38 am