September 7, 2018

Netflix’s Next Challenge: Rural India

By Beejoli Shah

The Information — In the U.S., Netflix and Amazon are locked in a heated battle for customers. In India, they have more than 40 other rivals to contend with. Companies ranging from Sony-owned Liv to local firms like Reliance Entertainment’s BigFlix are competing for online viewers. And that number is likely to grow, according to Datta Dave, the American-born co-founder of Tulsea, an Indian talent agency representing writers, producers and tech firms.

In particular, Mr. Dave said, competition will come from more online video services aimed at audiences outside of urban city centers, catering to regional cultures and languages. These include low-cost services like Fastfilmz, which produces content in four South Indian dialects and costs only 40 rupees a month, equivalent to 58 cents. Netflix’s base package costs 500 rupees a month, or about $7, while Amazon Prime Video costs 129 rupees a month, or $1.88.


• Netflix faces more than 40 online video rivals in India

• Regional services cost a fraction of Netflix

• Flood of services is driving demand for local shows

While Netflix and Amazon are likely to appeal to affluent viewers in the major cities, they will struggle to sign up the vast bulk of the population in rural areas. “I’m sure Netflix and Amazon will be successful here, but I think a lot of new platforms from India that haven’t launched yet will succeed, too,” Mr. Dave said in an interview with The Information.

For talent agencies like Tulsea, the competition is good. As the number of outlets grows, demand for new TV shows is exploding. And that is driving demand for screenwriters, producers and directors—new business for companies like Tulsea, which supplies talent and also advises some of the new entrants. Tulsea represented writers and directors on Netflix’s original series, “Sacred Games,” which premiered in July on the service, including in the U.S. The agency is also an advisor to Indian music label Saregama, as it moves into film and television production. One of Saregama’s first films was the Hindi-language “Brij Mohan Amar Rahe,” which premiered on Netflix last week.

Mr. Dave was born and raised in Los Angeles, and graduated from Claremont McKenna University. He worked in management consulting in Los Angeles for several years before moving to India to work for risk advisory firm Watson Wyatt. It was in India where Mr. Datta was first introduced to the Academy Award–winning director Shekhar Kapur. He began advising Mr. Kapur as his business manager in 2008. The following year, Mr. Datta launched Tulsea, India’s first full-service talent agency, with business partner Chaitanya Hegde.

In a phone interview with The Information from his office in Mumbai, Mr. Dave discussed how Tulsea operates, the rapidly growing Indian media and entertainment sector, and the challenges Western companies face from legacy Indian media. This interview has been edited for length and clarity.

The Information: Was there a specific inflection point that kicked off India’s recent media frenzy?

Mr. Dave: Absolutely. There’s a massive population, purchasing parity is increasing, and there is a stronger middle class. Macro issues, such as the cost of data and the growing infrastructure, are getting addressed and that has been huge. Data costs here have dropped more than 50% in the past 12 months.

The online video players coming in has been interesting as well. There are 40 different [over the top video] players in India. [That includes] large players like Hotstar, Jio, Amazon and Netflix. But you also have the telcos coming in with Vodafone and Airtel. And the studios. Viacom has launched a platform called Voot, Zee has launched one called Zee 5. YouTube is getting into the mix, too.

Have Indian viewers been open to the rise of online video platforms?

Absolutely. I think growth has been massive. It’s allowing audiences to get content that's very specific, identifiable and close to them. When you look at India, it’s so fragmented, there are so many languages. I think what we're going to see is niche platforms arise, because you just have such a large population with such varying languages, tastes, cultures and socioeconomic backgrounds.

Hotstar is an interesting play because they bought the rights for IPL cricket, which is the biggest form of content in India, and that drives a lot of subscriber uptick.

A lot of people are using the platforms for catch-up TV as well. Colors [a linear network], which is a part of Viacom, will license content that will go up on Voot. Same with Zee, same with Hotstar. So while online video platforms are creating original content, you're also seeing a lot of people use phones and tablets to catch up on linear television as well.

Do you think it’s changing how people are viewing television?

Linear television is still growing significantly here, and it's expected to continue growing. Twenty years ago there was just one channel, and now there are over 300. So even cable executives are rethinking their programming strategy, because they know there's still a lot of growth to be seen.

Original content production of series is still relatively new. It's kind of been a phenomenon over the last 12 to 24 months. I think we'll start to see a pickup there, and once platforms have more original content, we'll start to see an uptick in subscriptions, too.

Have Indian viewers been receptive to the shows being produced with Western companies, like “Sacred Games” which recently premiered on Netflix?

I think it's too soon to tell. India is so bifurcated, and the reality is that most people sitting in major cities like Mumbai, Delhi, Bangalore, Hyderabad and so on have a very low understanding of 95% of the country's population. There's a certain slice of the Indian population that can afford subscription rates for global, high-quality episodic television, and they watch “Game of Thrones,” “Breaking Bad,” they watch Colors Infinity, which is an English language channel owned by Viacom, which airs many of the top English series. I think these [Netflix-type] shows cater to that population. But it's a sizable population when it's fully penetrated. It is about 20 million people, if not more. And companies like Amazon are catering to that as well.

Are other Western producers outside of Amazon and Netflix trying to enter the market, or is the biggest thrust still coming from the platforms with the money to take the risk?

Well, Hotstar, for example, is owned by 20th Century Fox. A lot of people are just not aware that some of these Hollywood companies have been here for so long. But Viacom has Voot, Sony Liv, 20th which will soon be Disney has Hotstar—these are all local online platforms but of foreign conglomerates. So they're all making a play, [too]. And I think they're all going to be successful in their own way because they've [already learned about the market], they have massive audience bases and the opportunity to leverage their existing libraries of content, be it for local originals, international originals, local catch-up or sports.

Deep pockets will matter a lot. But I think the most important thing will be an understanding of the audience, a willingness to take creative risks, which is sometimes challenged here, and providing talent with opportunities they wouldn't otherwise have had. It's not just paying top dollar for talent. That's a new thing, and it's certainly a welcome change that a lot of online video players are embracing.

If Netflix doesn’t succeed in winning over subscribers, will that affect demand from other Western companies?

Not necessarily. With the entry of [over the top video] players, people are becoming aware of India, and as with anything, the first step is awareness. As people become more and more aware and come out here, [they] start to realize that people are doing interesting things out here.

I'm sure Netflix and Amazon and Hotstar will be successful here, but I think a lot of new platforms from here that haven't launched yet will, too. For companies truly interested in India from a commercial perspective, they're really focusing on saying ‘Let's make authentic local content that can thus be international.’ To the extent that players are willing to do that, there will be a lot of success.

U.S. agencies are already working with foreign talent. What are some of the ways that Tulsea competes, outside of having a local advantage?

We found very interesting ways to work with the different agencies. We put together a Netflix show recently, where we brought in someone from the U.S. to work on the show: Matt Pyken, who has been a consulting producer on “Mr. Robot” and “Empire,” and he's repped by International Creative Management. We've had similar conversations with folks at UTA and CAA. And we've dealt with instances with agencies and management companies in the US and UK who have said ‘We have this show that's going to need an Indian writer.’ I think it's been more collaborative than competitive, and there's been a lot of learning on both sides, which has been great.

In the U.S., an agreement between the Writers Guild and the industry group representing talent agencies prevents agencies from producing content. What’s the situation in India? Does Tulsea produce content?

We do. We're executive producers on one film, we produced another film a few years ago, and we're consulting producers on an upcoming Netflix show. We've also packaged a show at Amazon. In India, there isn't really a difference between an agency and a manager. Like Anonymous Content or Management 360 [two American management companies that also produce film and television], we might operate in that production space.

But you only want to get involved with your client’s projects at a producing level if your talent wants you to. There have been at least four instances in the past 12 months where we put together a project, but attached a production company to it rather than being producers on it.

CORRECTION: India's online video services include Jio. An earlier version incorrectly spelled its name. Matt Pyken has been a consulting producer on "Mr. Robot" and "Empire." An earlier version incorrectly spelled his name.