Beating Bollywood : The Indicator from Planet Money Amazon and Netflix are trying to take on India. But, so far a Hollywood ending, south-Asian style, has eluded them.

Beating Bollywood

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SALLY HERSHIPS, HOST:

So I was watching this movie recently on Amazon. It's a comedy. Guy gets engaged. His best friend doesn't like the girl, tries to break up the wedding. There is this whole complicated plot. But that is all besides the point. What was really surprising was all the twerking. That's right, twerking, which I told Ashanti Omkar about. She's a journalist for the BBC in London.

There were women in little skimpy shirts and tops and short bottoms. They were doing what we call twerking. I don't know if you have twerking in the U.K...

ASHANTI OMKAR: (Laughter) Yes.

HERSHIPS: ...Or you call it the same thing.

OMKAR: Oh, we certainly do. We certainly do.

CARDIFF GARCIA, HOST:

OK, but twerking aside, I'm still kind of curious to know if the guy broke up his best friend's wedding...

HERSHIPS: Really? You want to know the spoiler?

GARCIA: ...Which is not a cool move. Yeah.

HERSHIPS: (Laughter) He did. He did.

GARCIA: But in any case, Sally, the reason you were so surprised and the reason that you wanted to talk to Ashanti was because the movie you were watching was an Indian film. That's what Ashanti covers - Indian music, arts and entertainment. And there are all these stereotypes about Indian films, like that they're really conservative. So I kind of get it. You fell prey to a stereotype.

HERSHIPS: It's true, Cardiff, shameful but true. And when I asked Ashanti about all the drinking and talking about sex that I saw in the movie - "Sonu Ke Titu Ki Sweety" if you're curious.

GARCIA: What was that? Was that the title of the movie?

HERSHIPS: Don't make me do it. Don't make me do it again.

(LAUGHTER)

HERSHIPS: And I told her about my expectations for more chaste content. She totally schooled me politely.

OMKAR: You know what? Indian cinema has not been the way you've just described it in many, many, many years. You know, that kind of dancing and all that suggestive stuff has been there in time continuum.

GARCIA: In time continuum. And, Sally, it's not just you, though, that needs to get up to speed on Indian film.

HERSHIPS: I'm so glad.

GARCIA: So do Amazon and Netflix. Both of these companies are making a major push in India. The market for online video there is expected to reach over $2 billion in the next five years. That is a huge opportunity. But it turns out that it's not enough just to be hugely successful in the U.S. and in other parts of the world like both Netflix and Amazon are. You cannot just plug your American company into India and hit play.

HERSHIPS: Nope. And it's not enough to be first like Netflix, which launched almost two decades ago, because at the same time Netflix was launching in India, so was India's own online content provider, Hotstar. Hotstar - I love saying that name.

GARCIA: Yeah, it's a great name.

HERSHIPS: (Laughter) The company's - Hotstar's CEO says it has about 150 million monthly users. According to Counterpoint Research, Amazon has 11. Netflix has a paltry five. I'm Sally Herships.

GARCIA: And I'm Cardiff Garcia. On today's show, Sally identifies three strategies that Amazon and Netflix are following. These aren't, like, formal strategies, but they are things that these two companies are doing and which seem necessary for them to do well in India and which also reflect how business abroad can be so different from business at home.

(SOUNDBITE OF SONG, "CHHOTE CHHOTE PEG")

YO YO HONEY SINGH: (Singing in foreign language).

HERSHIPS: Strategy number one to dominating the Indian movie market is to understand exactly what that market is. When you and I, Cardiff, and I think many people in the U.S. think of Indian movies, we think Bollywood. But guess what?

OMKAR: India is not just Bollywood.

GARCIA: Bollywood mostly makes movies in the language of Hindi. But according to India's last census, 121 languages are spoken throughout the country. Now, about 22 of those languages cover most of the population. But still, that's a lot of languages. And even though Bollywood is a big business, a lot of its movies are huge hits, it's also the case that most movies in India are not Bollywood movies. There are a lot of movies in those other languages that might not make as much money but that still have an audience because a lot of people like watching content in their own languages.

OMKAR: All of those languages matter, so much so - the Tamil contingent want to watch Tamil programs. You know, the Kannadi girls want to watch Kannada programs.

GARCIA: So Hotstar does something that Netflix and Amazon don't always do in the US. It offers dubbed versions of its movies.

OMKAR: You know, when you go to India, you can go to a village cinema. I remember in 2005 I was in a village. And I went past a cinema that was showing "Harry Potter." But it was showing it with - it's a Tamil dub, so Harry Potter was speaking in Tamil.

HERSHIPS: Harry Potter - that kind of success is magical, wouldn't you say? And it might seem pretty simple. Amazon and Netflix could compete with Hotstar. All they'd need to do is dub content into however many languages they need, right?

GARCIA: Yeah, no, it's not that simple.

HERSHIPS: It's never that simple.

GARCIA: No. And it actually brings us to step two, which is programming for culture. This is a tricky business. In the U.S., Netflix and Amazon have it kind of easy. Most of the content they produce plays well all over the country. So if you think about it, you can show "Portlandia" in New York and "Seinfeld" in Portland and "Duck Dynasty" pretty much anywhere. And people are going to get it. Whether they like it or not, they're going to get it.

HERSHIPS: In India, not so much. Have you seen India?

GARCIA: On a map?

HERSHIPS: (Laughter) It is huge. Think about it. One hundred and twenty-one languages and a population of 1.3 billion - that may sound like a whole lot of potential subscribers for Amazon and Netflix, but all of those different people also mean cultural differences, which in turn can mean you can't just slap subtitles on or dub content you've made for an American audience and call it a day. Viewers want programming relevant to their own interests.

GARCIA: Hotstar kind of gets around this by being very selective about the content it produces. And mostly it just sticks to the original business model that Netflix and Amazon used, which was distributing movies that are already made rather than making movies itself. So what are newcomers to India like Amazon or Netflix supposed to do? Strategy three - they're focusing on a niche - in this case, India's wealthier, higher-earning demographic. In other words, people who can afford expensive TVs and smartphones and of course an Amazon Prime subscription, which in India is almost the same price as Hotstar, just over one U.S. dollar a month. So price is not really an issue for this demographic, which can easily afford even the more expensive Netflix, which is around seven U.S. dollars a month. So this seems to work for both Amazon and Netflix.

HERSHIPS: And both say they're having some good luck. Amazon is creating content in multiple Indian languages. It says its content mix is significantly local. And viewers are also watching its films which it has dubbed from the U.S.

GARCIA: Netflix has a really big hit on its hands, a cop thriller called "Sacred Games." Netflix subtitled this series in 24 languages, and it's also trying multilingual programming. But if Netflix or Amazon really want to crack the Indian market, there is one more step that they will almost certainly need to take.

HERSHIPS: And this is not an easy step. It involves one thing, one thing that our Irish editor Paddy wants us to point out that Americans are notoriously ignorant about.

GARCIA: True.

HERSHIPS: Hotstar has this thing. Amazon and Netflix do not, which is a major challenge for them.

GARCIA: What is this thing? The suspense is killing me. The secret advantage - what is it?

OMKAR: The advantage that Hotstar has is cricket because Indians love their cricket.

HERSHIPS: That is the sport, not the insect.

GARCIA: Yeah, cricket - silly mid on, bowl him a googly, leg before wicket. I have no idea what any of that stuff means. Our editor Paddy wrote it in. But we do know that India is cricket mad. And cricket is like one of those things that can bind together a big geographically and culturally enormous country like India. Indians love their cricket like public radio listeners love their - stereotype alert; one more - kale.

HERSHIPS: And tote bags.

GARCIA: And tote bags.

HERSHIPS: And right now Hotstar has the license to show the IPL. That's the Indian Premier League, like, the NFL of cricket. During the last game of the season, when the Chennai Super Kings won - for all the cricket fans out there - Hotstar says it broke records, more than 10 million viewers at the same time. Netflix and Amazon - they do not have cricket.

GARCIA: But Netflix appears to be catching on here. It even has a new documentary, an eight-episode series coming out about an Indian Premier League team, the Mumbai Indians.

HERSHIPS: But one last challenge that Ashanti says Hotstar's competitors face in India - Indians love sharing their logins with each other. But we don't have that problem here.

GARCIA: Nah, no, never happens.

HERSHIPS: Hey, can I borrow your - no.

GARCIA: My password is just all zeros, yeah, like Kanye's.

(SOUNDBITE OF SONG, "CHHOTE CHHOTE PEG")

YO YO HONEY SINGH: (Singing in foreign language).

UNIDENTIFIED SINGER: Put your hands up. Put your hands up.

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