Netflix Makes a Worthless Move That’s Going to Bomb

The streaming specialist is trying another trick to lure users in India, but it might not have the desired results.

| More on:

Netflix (NASDAQ: NFLX) has been trying very hard to make a dent in India. It has been creating a lot of content specific to that market and launching low-cost mobile-centric plans in a bid to lure India’s booming smartphone population and drive its next wave of growth.

So it is not surprising to see Netflix trying another trick in the book — luring Indian customers with a free episode of its latest original series for the Indian market. But is this trick going to move the needle for Netflix in India? Let’s find out.

Nothing great about this move

Indians who haven’t signed up for Netflix yet can simply head over to the company’s website and watch the first episode of Bard of Blood for free — without signing up. Previously, someone wanting to watch a Netflix show in India needed to buy a subscription or enter into a 30-day trial period that required the user to provide payment details.

Netflix allows a user signing up for the trial period to cancel the subscription before the trial period ends so that they are not charged. So the company’s move of offering just one free episode isn’t that radical, as anyone with a debit or a credit card in India could enjoy the entire streaming service for a month without paying any money.

For some perspective, India had nearly 49 million credit cards and almost 825 million debit cards in May this year.

The only advantage with the latest freebie is that a user will not have to punch in their card details, but all they get in return is just one free episode, and that from a series that has been panned by critics. The spy thriller hasn’t been as impressive as its Amazon Prime Video rival The Family Man, which was released around the same time.

In all, Netflix’s latest move to attract Indian users is a dumb one because a free episode from a badly reviewed original series is unlikely to lead to many membership conversions. And smart users will simply do what they’ve been doing anyway: opt for a 30-day trial and cancel their subscription before the period ends.

Another misstep in India from Netflix

With competition in India heating up, Netflix is trying hard to make a dent over there. It recently announced cheap, mobile-only plans for the Indian market that actually don’t seem very cheap when compared to rival offerings.

Of course, it cannot be denied that the company is working hard on the content front, having commissioned 12 India-specific originals and 22 films in local languages. But because Netflix costs much more than rival streaming services, it is at a disadvantage. Not surprisingly, Netflix was the least preferred video streaming service in India according to a survey carried out by app distributor MoMagic.

The survey was conducted from June to August 2019 and included around 7,500 unique respondents spread across the country.

Only 9% of the respondents picked Netflix as their streaming platform of choice, with 26% opting for Amazon Prime Video and 41% going for Hotstar, which is owned by Disney. That paints a bad picture of Netflix in India as a high proportion of Indians are willing to spend money on video streaming subscriptions, according to the survey.

The MoMagic survey found out that 70% of the respondents consume content on video streaming platforms after subscribing. But Netflix is not the preferred avenue for that spending as the results of the survey suggest. This can be attributed to the pricing tiers offered by the company in India.

Offering a free episode from a not-so-well-received original will not give Netflix what it needs to succeed in India’s competitive video streaming market. Don’t be surprised if this initiative fails to yield any results for the company.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Netflix, and Walt Disney. The Motley Fool has the following options: long January 2021 $60 calls on Walt Disney and short October 2019 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

More on Tech Stocks

Data center servers IT workers
Tech Stocks

Best Stock to Buy Right Now: Open Text vs CGI?

Both companies are dealing with information technology and harnessing the power of AI. Only one has an unmatched history and…

Read more »

Concept of big data flow, analysis, and visualizing complex information for artificial intelligence
Tech Stocks

A Tech Stock to Buy Now in the AI Bull Market

Alphabet (NASDAQ:GOOG) stock may be the cheapest American AI tech stock to pick up as markets near new highs.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

Is This Canadian Tech Stock the Next Big AI Winner?

This Canadian tech stock is one of the biggest names out there still, and it's one to keep an eye…

Read more »

Person uses a tablet in a blurred warehouse as background
Tech Stocks

This AI Stock Down 12% Is My Moonshot Investment

This AI-powered supply chain management and operation planning software company is my top pick to leverage AI tech for years…

Read more »

coins jump into piggy bank
Tech Stocks

2 Top TSX Stocks to Buy and Hold in Your TFSA

Here's why TFSA investors should consider owning top TSX stocks such as DCBO in their equity portfolio right now.

Read more »

Stethoscope with dollar shaped cord
Tech Stocks

1 Canadian Healthcare Stock That’s My Defensive Growth Play

Well Health Technologies is seeing rapid growth as it brings the benefits of technology to the healthcare sector.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

1 AI Chip Stock Down 19% That’s Built for the Next Tech Boom

Apple (NASDAQ:AAPL) stock is an underrated AI chip play that's going for cheap this July.

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Tech Stocks

1 Weird Situation Where an RRSP Is Safer Than a TFSA

There is one situation where holding Shopify (TSX:SHOP) stock in an RRSP is safer than a TFSA.

Read more »