Netflix Looks To Partner With India's Reliance For Original Local Content In Key Market

Netflix, Inc. NFLX is in talks with Indian behemoth Reliance Industries Ltd.'s subsidiary Network18 to source local content, Reuters reported.

What Happened

Network18 and its affiliates, including Viacom18, its collaboration with ViacomCBS Inc. VIACA VIAC, will create exclusive content for Netflix under a multi-year deal, if it's finalized, according to Reuters. The negotiations are in early stages and could still fall through.

Network18 will continue to create content for other companies, including Amazon.com Inc. AMZN Prime Video, even if it manages to reach a deal with the streaming video on demand service provider, Reuters reported.

One of the sources described the ongoing discussion as one of Netflix's "biggest moves to create local content in India."

"The scale of Netflix's ambition and aspiration in India is quite high," the person told Reuters.

Why It Matters

Netflix entered the Indian market in January 2016, and has created several original shows locally.

The company nevertheless trails behind Amazon's Prime Video and Walt Disney Co DIS subsidiary Hotstar in terms of subscriptions.

Hotstar had 3 million paid subscribers as of June last year, The Wall Street Journal reported at the time. Amazon Prime had 2.5 million and Netflix had about 1.2 million, according to the IHS Markit data reported by WSJ.

Adding significant original content in India may help Netflix justify the costs involved. The Los Gatos, California-based company's subscription costs $8.5 per month in the country.

For comparison, Amazon Prime costs $1.70 per month or $13.20 per year in India. Hotstar memberships are priced at $3.94 per month or $19.74 per year, which includes all content from the recently launched Disney+ service.

The move follows Facebook Inc.'s FB acquisition of nearly 10% stake in another Reliance subsidiary, Jio Platforms.