1. Netflix Bows To Price Pressure In India

You may remember us banging on about this before (multiple times) but one of the biggest challenges facing Netflix and the rest of the U.S. Flixes as they set out in their respective quests for Total World Domination is that in countries like India and the rest of the developing world, The Price Is Too Damn High.

Like seriously Too Damn High.

There are only so many people in these emerging economies who can shell out the equivalent of five US dollars, let alone ten or fifteen each month for some TV shows. And even those few who have the means to do so may not want to do so because there are already local equivalents who are charging one-tenth of that. 

And so, in a move that was surprising, if not totally unexpected, Netflix just slashed the price of their basic service in India by a whopping 60%, bringing it down to $2.61/month, while the budget-priced mobile-only service, Netflix’s initial attempt at price cutting, is now just $1.95/month

Why It Matters

Cool prices, Reedster, but you are still nowhere near as low as Amazon Prime at $1.17/month or Disney+ Hotstar which can be had for as little as 55 cents/month.

And that’s a problem.

In emerging economies the difference between 55 cents and $1.95 is massive. Maybe not for the upper classes but for the millions of people the Flixes want to pull in, it’s a huge nut.

Yes, all those lower priced services are ad supported and you’re not, but as we’ve even seen in the U.S., people aren’t all that bothered by ads if they’re, you know, tastefully done. Meaning less of them and better targeted. (Which is why AVOD is now getting more viewers than SVOD).

So there’s that and the fact that Netflix, despite making a strong effort in that regard, still doesn’t have as much local content as Hotstar, which started life as a local service before getting swept up in the Fox/Disney deal and winding up part of Disney+.

It also doesn’t have Indian Premier League Cricket, which may be the real reason so many people spend their hard-earned rupees on Hotstar.

This is a problem as Netflix has clearly set their sights on winning over customers in places like Asia, Africa and Latin America where incomes are nowhere near what they are in the U.S, Canada and Europe. 

But Netflix only has about five million subscribers in India today, despite Reed Hastings’ 2018 comment that “the next 100 million (subscribers) is from India.”

Price cuts are one way in…if they can see a significant rise in subscribers as a result. Netflix has tried this before, rolling out a mobile-only plan for around half the price of the traditional plan, but as the 5MM subscriber stat above indicates, they have not been all that successful.

The problem in a place like India is that users may not have bandwidth in their budgets for more than one or two services and if Hotstar and Amazon are there first, Netflix will need to come up with a really compelling reason for them to switch.

Which brings up another issue. Some of Netflix’s initial local content offerings have bumped up against the country’s conservative tendencies and Netflix has had to offer apologies and walk things back. This is likely going to be the case in a goodly portion of the world, where Western sensibilities are not local sensibilities. 

As I’ve discussed here before, this is a decision that all of the streaming services are going to have to make, even in the U.S. Do they double down on the “HBO-like” programming they’ve been creating thus far that mostly attracts more educated and affluent users, do they make a push for more mainstream fare, or, given that they are no longer constrained by time, do they try to do both?

It’s an interesting conundrum.

What You Need To Do About It

If you are Netflix, you’ve no doubt come to realize that conquering the world outside of the U.S. and Europe is going to require a very different strategy and, likely, a very different product and pricing structure. Fortunately you were in all these countries first, so you get that first mover advantage.

It's just there’s a lot of countries (well over 100 of them) and there’s unlikely to be a universal game plan. So remember to stick to the strategy that got you to where you are in the first place: don’t be afraid to change course and always be ready to adapt to changing circumstances rather than trying to fight them or pretend they don’t exist.

If you’re one of the other Flixes and you’re looking at your own Path To Total World Domination, learn from Netflix. Pricing is critical outside the U.S., as is local programming and being aware of local competitors and local sensibilities. 

If you’re one of those people who likes predicting that Netflix is going to “need to start offering advertising soon” then this is your moment. There’s an easy argument to be made that in order to be profitable at that price point, Netflix will indeed need to start offering advertising in markets like India.

You’re welcome.

2. LG To Provide Its Data To iSpot

In what’s being seen as a major coup for both companies, iSpot, which provides the industry with both measurement and attribution data announced a deal with LG Ads Solutions that will see the ACR data from more than 20 million LG TVs join the data from the 19 million TVs (mostly VIZIO) that it currently collects data from.

If math’s not your thing, that’s 39 million in total, far and away the largest footprint of licensed ACR data to date.

Why It Matters

ACR data is the future.

That’s less a prediction than a statement of fact.

Try buying a TV set these days that is not a smart TV. Pretty much impossible, which means that the number of smart TVs is only going to keep growing.

Comcast, the largest supplier of set top box data is already getting out of the set top box business, having recently launched their own line of smart TVs.

Ditto Nielsen, which bought Gracenote in 2019 in order to get its own ACR product off the ground.

ACR is big too.

Samsung, which is the largest smart TV OEM in the U.S. collects data from around 42 opted-in TVs. Add that to VIZIO and LG’s numbers and we’re talking more than 80 million input points before you even add in Roku, Amazon and some of the smaller OEMs, which brings the number to well over 125 million.

Which is indeed a huge number, one the industry can use to push back against digital and its claims of “census level” data.

The good news, as we learned in our soon to be released TVREV report on the ascendancy of ACR data, is that the industry is coming around to realizing and internalizing this shift, which is a giant leap from where they were three years ago when we first looked into ACR.

What’s significant about this particular deal though, is that for years, VIZIO was the only major OEM to license currency-grade data to third parties. 

But now LG Ads is joining the party. They’re moving judiciously, but the fact that they are moving at all is notable and is definitely going to shake up the data and measurement industries.

Even more significant is that iSpot is now able to provide measurement data from 39 million TV sets to an industry that for years was content to receive extrapolations based on just 20,000 panelists. (That’s an increase of almost…wait for it…200,000%.)

Given that the real competition for TV ad dollars is a digital industry that promises “census-level” 1:1 measurement, having that sort of scale as a rebuttal is huge.

And that’s before you add in the emotional impact of sight, sound and motion. 

What You Need To Do About It

If you’re an advertiser, you can now get the power of a TV commercial along with measurement from 39 million opted in TVs. That’s a big win and having data from two different OEMs should also help in convincing certain holdouts as to the representational nature of the data.

If your knowledge of ACR data is based on something you learned five years ago (and you know who you are) then time to take a refresher course in order to understand the present value of ACR and what it is capable of.

If you are ready to write off set top box data, don’t be so hasty. It still has value, tens of millions of viewers still watch cable off a set top box, and while those numbers are indeed shrinking, they’re shrinking in single digital annual increments and will likely have a floor, meaning the need to also consider set top box data is not going away any time soon.

Finally, if you are iSpot and LG Ads, take a bow. This is a big deal, in all senses of the word, and one that will only serve to help move the television industry forward.