Can Netflix Beat Bollywood?

Addressing a room filled with New Delhi’s business elite earlier this year, Netflix Inc. Chief Executive Officer Reed Hastings offered a prediction: His company’s next 100 million customers will come from India. The crowd grew silent as the man interviewing Hastings, local entrepreneur Ronnie Screwvala, chuckled. Netflix has fewer than 1 million customers in India, and even aggressive forecasts by analysts suggest the video service will reach only 3 million by 2020. Hastings just smiled mischievously.

Netflix didn’t regard India as much of an opportunity when it first expanded there in January 2016. The company has built the world’s largest paid online TV network by taking advantage of the proliferation of high-speed internet to deliver a video service that’s cheaper and easier to use than cable or satellite TV. But Netflix’s average monthly price in India of 500 to 800 rupees ($7 to $12) is twice as much as the average pay-TV offering. Fewer than 10 percent of Indian households with TV pay for a premium TV service that costs more than Netflix. Equally challenging: The vast majority of titles on Netflix’s service in India are in English, but films there fare best when in Hindi or Tamil.