Netflix to use cheaper mobile-only plans to grow audience in India

Published: April 18, 2019 2:05:03 AM

Ted Sarandos, chief content officer at Netflix, said the streaming service was seeing the investment in local language content in India pay back in the form of excitement, member growth and hours growth. “That's encouraging us to keep going.”

Netflix to use cheaper mobile-only plans to grow audience in IndiaNetflix to use cheaper mobile-only plans to grow audience in India

By Asmita Dey

Netflix on Tuesday said its mobile-only cheaper subscription plans for India will help it widen the user base in the country. Netflix has about a million subscribers here, even as it boasts of nearly 150 million subscribers globally, according to research firm Media Partners Asia. About a year back, in February 2018, CEO Reed Hastings had said India could deliver the company’s next 100 million subscribers.

Greg Peters, chief product officer at Netflix, said at the Q12019 earnings call, “…We’re quite certain that we should do something to find a price tier that is lower than the existing lowest price tier to broaden that accessibility. We think that they’ll (mobile-only offering at a lower price point) be important in adding members in India.” Netflix is testing mobile-only plans starting at `65 per week and `250 per month for select mobile users in India.

Ted Sarandos, chief content officer at Netflix, said the streaming service was seeing the investment in local language content in India pay back in the form of excitement, member growth and hours growth. “That’s encouraging us to keep going.”

Peters said, “As we have that ongoing content investment and we’re really providing stories that Indian consumers really love, it’s an opportunity for us to look at how we broaden the accessibility of the service to more and more consumers.”

The OTT (over-the-top) player reported global revenues of $4.52 billion and a net profit of $344 million for Q12019. The company said it added 1.74 million paid members in the US and 7.86 million paid members in international markets, the highest quarterly paid net additions. Its India unit posted a net profit of `20.2 lakh for the year ended March 2018 on revenues of `58 crore.

Analysts at HSBC noted that Netflix is following its advertisement-free global strategy in India as well. “Although it has included some Bollywood movies into its content library, keeping India audiences in focus, it still lags behind in local language content,” they wrote a few months back.

Netflix’s basic monthly plan costs `500 while rival Amazon Prime Video’s monthly plan comes cheaper at `129. Hotstar, the top video OTT app in terms of downloads and monthly active users, has priced its premium package at `299 per month, according to a recent FICCI-EY report .

Netflix’s content in India is primarily in English whereas players like Zee5 are betting on their regional content to topple competitors. Consumers also have the option to switch to regional video streaming apps like Hoichoi. Netflix invested around $70-80 million in original content in 2017, lower than Hotstar’s investment of about $300 million, estimate analysts at Boston Consulting Group. From nine players in 2012, the number of players in India’s video OTT market increased to 32 in 2018, analysts at BCG said.

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