As Amazon launches its own international expansion, Netflix is busy locking down local content to better compete in international markets.
Netflix today announced an exclusive deal to distribute the current and upcoming films from Indian production company Red Chillies, which produces films for actor Shah Rukh Khan. Netflix will offer the studio’s films to its 86 million worldwide subscribers.
"Shah Rukh Khan is the most sought-after actor in the Indian film industry, and has played a huge role in bringing Indian cinema to the world stage," said Netflix Chief Content Officer Ted Sarandos in a statement. "His moniker ‘King Khan’ speaks to his status as a cultural icon and to the incredible popularity of his films among audiences worldwide."
"Red Chillies is surging ahead in global entertainment and for the first time, our great stories are going global on Netflix all at once and crossing all geographical barriers, waiting to be discovered over the world. No more waiting for our fans wherever they are," said Shah Rukh Khan.
Netflix’s first offering from Red Chillies is "Dear Zindagi," which was released theatrically on Nov. 25. Netflix will also offer "Happy New Year," "Dilwale" and "Om Shanti Om."
In Red Chillies, Netflix has a partner that has enjoyed success at the Indian box office. "Dear Zindagi" was one of the fastest films to haul in Rs 50 crore (around $11 million) in recent months, according to Indian Express.
Deals like this with local content companies could be what Netflix needs if it is going to fend off other SVOD services, particularly Amazon, which just confirmed its own international expansion.
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If Netflix is able to build an advantage with local content, it’s still possible that Amazon can offset that by significantly undercutting Netflix. Amazon Prime is pricing its service in international markets at around $2.99 (or €2.99) for the first six months in most markets. After that, the price jumps to $5.99 (or €5.99) per month. And, of course, that price does not include the other e-commerce perks that come along with Prime memberships in some markets.
But it seems likely that Amazon too will go after local content deals. Roy Price, VP of Amazon Studios and global head of Prime Video content, told "Variety" that localization is the best way to compete in foreign markets.
“You can have a global service, but there are no global customers—there are only local customers. You have to win the day for each customer in each country, in Dakar and Istanbul—everywhere. It takes some thought and some localization," Price said.