Netflix to Launch in India by 2016 (Report)

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Netflix co-founder and CEO Reed Hastings

The potential launch could shake up India's nascent VOD market, which has seen recent entrants like Hooq, Hotstar, Ditto TV and Eros Now.

Increasingly global streaming giant Netflix has plans to launch in India by 2016, according to a report in the Times of India on Thursday.

Citing sources familiar with the matter, the Times report said Netflix had "firmed up plans" to enter the Indian market, which is still virgin territory for VOD companies. “We have said we plan to be nearly global by the end of 2016. We have nothing else to share at this point,” a Netflix spokesperson told the Times.

India seems a fertile market for VOD uptake given that Internet penetration and mobile connectivity are increasing rapidly. According to a recent industry report by consultants KPMG India, the country had about 280 million Internet users in 2014, with growth largely spurred by the increasing penetration of smartphones (116 million in 2014). The report predicts that India is expected to reach 640 million Internet users by 2019.

Additionally, India's total mobile subscriber base is currently at about 970 million, and the 1 billion user mark could be reached by the end of 2015, according to figures from the Telecom Regulatory Authority of India. India is the second-largest mobile market in the world after China, which has 1.27 billion users.

Last month, VOD service Hooq was launched in India backed by Warner Bros., Sony Pictures and Singapore telecom giant Singtel. The ad-free service includes Hollywood content from Sony, Warner, Disney, Dreamworks and Miramax along with Indian content from leading banners. The service is offered at a monthly price of $3.20 (rupees 199).

Another recent new player is Hotstar, backed by Fox's Star India network. The free ad-driven service draws on the network's vast content library with Hotstar registering strong digital viewership for its sports properties such as the recent World Cup Cricket. The event clocked a total of 340 million video views, which the network claims is the most viewed sporting event on digital anywhere in the world.

Other potential competitors for Netflix in India include broadcaster Zee TV's Ditto TV and Eros Now, owned by leading film entity Eros Group.

Despite the potential, streaming services in India face some very real infrastructure problems. Existing Internet speeds are still an obstacle in India, with average speeds at 2mbps compared to the U.S. average of 11.5 mbps. However, with the launch of faster 4G services, mobile content delivery should become faster and smoother in the coming years.