It is well known that Netflix has tremendous interest in the Indian market. It is also known that Reliance Jio is expanding at an astounding rate in the country with its 4G services and bundled plans. Now, the two giants are reportedly looking at joining hands to leverage the market with data-hungry, online-show-enthusiastic users.
During his recent visit to the country, Netflix CEO Reed Hastings said that he sees a potential of 100 million customers in India. The online streaming service boasts 120 million users globally. In comparison, Reliance Jio recently touched the 160 million user base mark earlier this year. Together, the companies could potentially create a bigger rival to not only the telecom operators in India, but also competing streaming services such as Amazon Prime Video and Hotstar.
What’s the deal?
Two sources close to the development told FactorDaily that the companies have been in discussion for a few months, but the deal is yet to be finalized. One of the sources further said that the deal could possibly see Netflix giving its entire catalogue to Jio and charge a royalty fee to give selected content that would appeal more to the Indian viewers. There are also indications of sharing of original content with Jio.
BGR India reached out to Reliance Jio, but there is no official response from the company. Email to Netflix seeking comment has not been responded to at the time of writing this piece.
What makes Jio and Netflix perfect for each other
Reliance Jio has its own suite of apps where it provides its users access to popular content including music, TV shows, and more. However, the supposed deal with Netflix would boost Jio’s userbase and also help Netflix leverage that to further penetrate the Indian market.
If we look at the immediate rival, Amazon India recently introduced its Prime Music service to the Indian market. The service is offered as part of the Prime subscription which is priced at Rs 999 for a year and also includes access to Prime Video and shopping benefits for users.
Given Jio’s astounding success in a short period of time since its commercial launch in late 2016 makes it a very potent partner for companies looking at penetrating the Indian market, and Netflix is no exception.
“Reliance Jio has been a transformational network in India and has brought down data cost massively. There are other people around the world having that kind of impact and can get people to use internet more. We hope someone would do a Reliance Jio in every other country,” Hastings had said. With the combination of affordable internet plans and the continued benefits to its Prime users, Jio had gained dominance on the smartphones of Indian, even if through the second SIM slot on users’ dual-SIM smartphones.
Jio’s growth is significant given that it has established itself when internet connectivity is still inconsistent in most parts of the country. If one looks at the current internet trends in India, a shift is being seen in terms of content consumption. Users are now increasingly moving towards video. According to KPMG reports, Jio’s commercial launch of its video streaming apps witnessed an impressive 336 percent rise in usage. In 2016, video streaming made for 49 percent of data consumption in India. This is expected to reach to 75 percent by 2021.
Benefits to Indian consumers
Amidst this, Netflix’s potential partnership with Jio will be a step forward for both the companies, as well as help culture the Indian consumers. With majority of Indians now using smartphones, and Jio’s promise of seamless 4G data, the deal would essentially mean users will have access to a larger catalogue of content, including some of the popular shows, all possibly under Jio’s umbrella.
Jio recently extended the Prime benefits for its members for 12 months more, without any extra charge. As the source is quoted as saying, “Reliance Jio wants to build the largest catalogue of streaming content, not only in India but also across the world.” The source further added that the financial details of the deal haven’t been finalized but it is possible “Jio might look at a tiered subscription service with Netflix on board.”
Watch: How to download Netflix shows
So a potential partnership will be a two-way benefit where Jio could help Netflix expand its userbase in India, while Jio will get a chance to expand its own portfolio of content or services in other markets. The partnership could also mean sharing of customer insights to improve user experience, co-developing original content which will be exclusive to Jio platform.