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Netflix, Inc. (NASDAQ:NFLX) Can’t Have It Easy in the Subcontinent

Netflix Inc shares spike on Japan launch

Netflix, Inc. has plans to  make  its service available to movie-crazy Indians, but, like in other emerging markets, it won’t be easy for two reasons. First, as we all know, a majority of Indians do not have a habit of paying to watch online. And, the second is rising local competition.

Netflix Inc shares spike on Japan launch

Eros planning Netflix rival

Kishore Lulla executive chairman of Eros International plans to make the service popular in India before Netflix and Amazon arrive in the country. Lulla is now focusing on developing a streaming service instead of building on the existing traditional TV network, says a report Bloomberg. The plan is to use his studio’s existing (and massive) catalog of over 2000 films to create a loyal fan base before Netflix and Amazon spread their roots in the world’s second-biggest country by population.

Eros, founded in 1977, releases more than 70 films a year, more than any of its US rival, says the report. Eros is “exactly where Netflix wants to be in the next three to five years,” Lulla said. “I’m already there.”

Eros had been working on the streaming concept since 2005, but 2015 proved to be a vital year as 2% of its stake was acquired London-based Knight Assets. The investment firm headed by former Deutsche Bank and Bank of America employees asked for a primary focus on the on-demand.

India, a lucrative market

Despite rampant piracy in the region, India is second-most most attractive digital media market after China. Even with only 19% of Internet users, India has almost the same number of web users as the US, and the number are only moving upwards.

Ernst and Young, a consulting firm, notes 46% of India’s population is under 25 while Cisco estimates that there will be 651 million smart phones in India by 2019. These two factors are enough to make any media firm go crazy for the market.

On how any local service could stay ahead when Netflix, Inc. arrives, CEO of Balaji, a local media firm, told Bloomberg, “Indian consumers pay for what they perceive value in, and when it’s not available elsewhere,” adding “The best execution and the best storytelling will win.”

For now, the Netflix India launch is still some time away as the US firm for now is focusing on Japan, where it unveiled its services last week. After Japan, Netflix will reportedly debut in South Korea by January 2016. The official announcement for the same could be expected in the coming weeks, says the Korea Times. The US firm is “seeking to form strategic partnerships with Korean mobile carriers and leading terrestrial broadcasters” says the report.

On Friday, Netflix, Inc. shares closed down 2.25% at $98.79. Year to date, the stock is up over 101% while in the last one-year, they are up over 45%.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.