Netflix will make its content free over this weekend. We spoke to experts about the short and long term impact of this move.
Netflix has announced a two-day streaming fest on its platform. From midnight (12 a.m.) onwards on December 5, users will have access to Netflix’s library of content – free of cost for two days.
“… we think that giving everyone in a country access to Netflix for free for a weekend could be a great way to expose a bunch of new people to the amazing stories that we have. And also the service, how it (the service) works, really create an event, and hopefully get a bunch of those folks to sign up. So, we're going to try that in India, and we'll see how it goes,” said Gregory K. Peters, Netflix’s COO and chief product officer, in the company’s earnings statement.
Netflix has been going out of its way to promote the StreamFest – with an ad campaign featuring Bollywood celebs and a promotional video that features content creators.
The promotional video features prominent content creators that Netflix regularly collaborates with. These include the likes of former AIB founder Tanmay Bhat, YouTuber Ashish Chanchalani, former FilterCopy actors Ahsaas Channa and Aisha Ahmed, and Kusha Kapila, among others.
The main point of discussion is that if Netflix allows two-day free access, who will visit their channels and consume their content? Netflix, on its website, said, “That’s right, it’s time to cancel your plans and settle in to watch Netflix. We don’t need any payment details –just your love and undivided attention.”
Netflix’s ad campaign featuring Bollywood celebrities include Yami Gautam, Nawazuddin Siddiqui and Anil Kapoor (all of whom have acted in Netflix Originals like 'Ginny Weds Sunny' and 'Sacred Games').
The timing of the StreamFest is not surprising. Netflix is facing its slowest growth quarter. This quarter saw Netflix adding 2.2 million paid subscribers, as compared to 10.1 million subscribers in Q1 and 15.7 million subscriptions in Q2.
In India, Netflix faces stiff competition from not only international streaming platforms, like Amazon Prime Video and Disney+ Hotstar, but also a slew of domestic players, such as SonyLIV, Eros Now, ALTBalaji, Voot, ZEE5, MX Player, JioCinema, among others. Adding to this, there’s also a sense of streaming fatigue after all the highs OTT platforms enjoyed during the (COVID) lockdown months.
So, what do industry experts make of all this? We (afaqs!) spoke to a few...
Raj Nayak, founder and managing director, House of Cheer (former COO, Viacom18 Network)
Most subscription services do offer free trial periods. In most cases, the customer has to fill in their credit card details. Many people start the process of availing the free trial, but the moment they have to fill in their credit card details, they don’t go ahead with the transaction. The dropout rates are pretty high.
So, a free trial like this, with no strings attached, is a great way of collecting data of potential customers, and also getting people to experience the rich and wide array of content on the platform.
I don’t foresee any negative consequences in this experiment. Netflix has spent a lot in creating special creatives, using celebrities like Anil Kapoor and Yami Gautam to promote the festival and create a buzz. The fact that it is with no strings attached, may encourage more people to sample the platform.
Even if 10 or 15 per cent of the people, who log in for the festival, get converted, it will help Netflix drive new subscription. The way I look at it is another subscription-driven marketing initiative.
Manav Sethi, chief marketing officer, Octro Inc. (former CMO at Eros International PLC and ALTBalaji)
I think it’s one of the smartest masterstrokes, and not something everyone can do. It (Netflix) has a deep and broad library of content and that’s why for it, this is a way of increasing its universe for trials.
India is a price sensitive market, as you already know. So, how do you make people try out the product? India is also a country where people don't like to divulge information related to their cards for a trial. This is why a company like Netflix – whose entire content library is behind a paywall – faces a challenge.
This is something that will bring in a lot of people to taste the blood, in that sense. Because once you get a taste, you want more. If you look at the last six months, users have had a lot more disposable time on their hands, and there are no avenues for outdoor entertainment, as of now.
Broadcasting and linear TV has taken a hit and that’s why a lot of other forms of indoor entertainment have come up. That’s why categories like OTT and gaming have seen humongous spike (growth).
Another factor to consider is that these are not cyclical changes, but they are behaviour shaping changes. If you open the floodgates and, say, a person watches 12 hours of content. Twelve hours, with one-hour-long episodes, means that you have consumed roughly one season of a show, that’s all.
The risk versus reward ratio is highly skewed in Netflix’s favour, as it has a library worth millions of hours in a diverse range of genres and languages. This will possibly bring more people into the fold. If you look at it from a customer acquisition standpoint, it (Netflix) is bringing new people in without spending a dime. When Netflix announced that it is becoming free for a few days, it created a huge wave.
The best case scenario is that Netflix gets around one to five million people trying it, out of which, a majority may end up subscribing to the platform. And even if it doesn’t get conversions, it will achieve virality and word of mouth conversations – which hold a lot of value in today’s world.
As far as other players and the impact on the ecosystem is concerned, others may not have a library as broad/deep as Netflix has. Acquiring or creating content is a capital intensive game. If other players decide to follow Netflix’s example and open the floodgates, but don’t have enough content, then consumers will come, watch and leave.
Uday Sodhi, senior partner, Kurate Digital Consulting (former business head, SonyLIV)
This is a great innovation from Netflix’s point of view. It will end up getting a lot of fence sitters, who would have been hesitant to put in their card details for a free trial. For new customer acquisition, it’ll help and Netflix will also get to know their customers a little better. When people go in and search for content on those free days, they’ll understand what the consumer wants to watch on the platform.
The thing with Netflix is that its entire library is behind a paywall. The fence sitters, who want to sample the platform, can be encouraged to come over and potentially subscribe after this weekend.
It’s a short-term tactical way of improving the sampling of your product. It’s not a move that will permanently impact anything. It’ll only bring in some additional viewers via the opportunity to sample the service over the next few days. It’s a great way to understand the consumer better.
Jehil Thakkar, head of media and entertainment, KPMG in India
This is not some massive strategic move from Netflix. It’s a strategic way of giving people a sample of what is available, in a bid to increase its subscription base.
It’s like having a sale to get people more interested in your brand. It may have had a bigger impact on the ecosystem, but a two-day sampling window has no implications on the ecosystem.