Wednesday, November 2, 2016

Netflix, Amazon Take Divergent Paths to Reach Indian Audience - Analysis by Franco Agoglia

Netflix, Amazon Take Divergent Paths to Reach Indian Audience
Analysis by Franco Agoglia
Original article published: Updated Nov. 1, 2016 1:25 a.m. ET

Shalini Ramachandran’s article give a detailed contrast and comparison of Netflix and Amazon Instant Video strategies to enter the Indian market. These contrasting strategies bring forth the common dilemma a marketer faces when entering a new market, tailor the product or service to the consumer or tailor the consumer to the product or service. In the case of streaming media this come in the form of content selection.

Netflix has maintained its general strategy of developing and acquiring globally appealing content. In other words they are trying to create and find content that can transcend different cultures. In the case of India this strategy, as admitted my Netflix, will mostly appeal to the “iPhone users” who have are as described to be the elites in India and those with a taste for Western culture.

On the other hand Amazon wants to provide more local content. They want to give the people what they already know they want. Instead of creating a demand they are going after what is already there. Roy Price, Amazon Studio’s chief, has been touring India along with a content development team, which has been there for the past two years, have been meeting with many of the Bollywood big names in order to develop a deeper understanding of the market. In contrast Netflix has been developing their strategy from California. This will allow Amazon to appeal to a larger audience than that of Netflix.

Another characteristic which shows the different approaches from each service is the price. Netflix is maintain the same price it offers in the US ($8 per month), whereas Amazon is setting the price at $15 dollars for a year. Amazon’s pricing competes directly with other services in India which average a price of $30 dollars a year. However, it is difficult to directly compare Amazon to Netflix in this regard, because Amazon’s media service works more as a supplement or a magnet for its e-commerce service. This has been Amazons strategy all along with its media services. Furthermore, Amazon has greater consumer insight because they can extract marketing data from their e-commerce purchases to better determine the markets preferences in content.

In conclusion, these alternate approaches to entering a market are evident in all international marketing textbooks, with a typical favoritism towards adapting to the market. However, when considering this matter in practical terms one does not seem to be clearly better than other. For instance, Netflix approach has given them the ability to enter the market well before Amazon thus providing them with a first mover advantage, and also it allowed them to attain consumption data which they did not have prior. This will open the door for them to later compete more directly on content with Amazon who have a huge advantage with their e-commerce site’s data and analysis.

1 comment:

  1. Great analysis, Franco. It will be interesting to see how these two behemoths duke it out within an international context over the next few years. Like you mentioned, the strategy sets that both companies employ will be key - Netflix with a more globalized feel and Amazon with a promotion of local content. I can definitely see the advantages and disadvantages from either side - time will tell in terms of how market share is affected by the two different strategies that are being put forth in India.