The Netflix gambit

“Netflix is different. We have a culture where No Rules Rules,” says Reed Hastings, the founder and co-CEO of the $25-billion (revenue) streaming giant Netflix, in the introduction to his book, aptly titled No Rules Rules, co-authored with Erin Meyer of INSEAD Business School. He says the Netflix culture values people over processes, innovation over efficiency, and has very few controls. When we spoke to Hastings for this month’s cover story, he said that the one big lesson he learnt after having to sell his first company was “the danger of over-optimising for efficiency with rules and processes”.

It is this flexibility which is essentially the Netflix Way, a management philosophy which has seen a DVD mail-order service morph into one of the biggest global brands with its streaming service which changed the way the world consumes entertainment. In the process, it has ushered in a culture where the world shares great storytelling, whether it is a show from France or Spain, or a film from India.

With over 200 million subscribers worldwide, Netflix, which has already spent five eventful years in India, realises that the Indian market is its next big playground which will give it the push to take its subscriber base to the next level. But it also knows that in order to grow further in a diversified market like India, it will have to innovate constantly, and ensure there is a diversified slate of compelling content coming to and going from India.

To be sure, the Indian market for streaming entertainment has changed dramatically over the past five years, and Hastings is quick to acknowledge the contribution made by Reliance Jio in bringing data prices down sharply in the country, something which has provided a massive boost to streaming services like Netflix. However, it has also spawned several competitors, and allowed global giants like Disney+ Hotstar and Amazon Prime Video to gain ground in the battle for consumers’ viewing time. Alongside, Indian services like MX Player, with their wide local reach, are also upping the ante. But the real competition for Netflix is YouTube, with its massive footprint and variety. Besides, despite innovations on the pricing front, the Netflix service is still priced higher than most other competitors in India, which is a price-sensitive market.

The next five years, then, will be both very exciting (with more investments and a long line-up of new content) and also very challenging for Netflix as it fights for a larger share of the Indian pie. The good news: Indians have shown they are both producers and consumers of great content. And that’s what Hastings will be betting on.

Moving away from Netflix, the past month has seen frenetic activity on two fronts—the roll-out of the much-awaited Covid-19 vaccines in India, and the inauguration of Joe Biden as the 46th President of the United States. Both developments have major ramifications for the Indian economy, and this issue examines them in detail.

India’s massive vaccines roll-out, which has started with inoculating frontline health workers, is as much a test of the country’s administrative strength as it is a testament to its inherent resilience. And as the government unveils a crucial Budget in February, India will be hoping the vaccine is, quite literally, a shot in the arm for an economy grappling with multiple challenges.