Netflix on Tuesday cut the prices of all its four subscription plans in India, moving aggressively to expand its base in a country that is crucial for its business and still has millions of untapped users.
The entertainment streaming service slashed the price of its flagship basic plan—it allows customers access to content on any one device including television–by 60 per cent from Rs 499 to Rs 199. The mobile-only monthly plan in HD quality—an experiment the company started in July 2019—was reduced to Rs 149 from Rs 199. The plan is a hit, accounting for about nearly half of Netflix’s subscriber base, according to industry assessment.
The premium plan, which allows access to four different devices at the same time, was reduced to Rs 649 (from Rs 799) and the standard plan, which allows access to two, to Rs 499 (from Rs 649).
“It’s a two-pronged offering for customers; we are reducing pricing and offering value. It also comes with a big content lineup. We have a big global slate with a big Indian slate,” said Monika Shergill, vice president for content at Netflix, referring to actors and a TV show.
Netflix is slashing prices close on the heels of rival Amazon Prime increasing its annual plan from Rs 999 to Rs 1,499. As a result, the gap between Netflix and Amazon Prime (whose monthly average pay out now is Rs 125) is closing in. However, Prime comes with exclusive add-ons like free Amazon delivery and a music service.
According to Media Partners Asia’s (MPA) estimates, Netflix is far behind in terms of subscription customers worldwide: it is expected to add 5.5 million subscribers in the end of 2021, fewer than Hotstar Disney (46 million) and Amazon Prime (21.8 million).
In terms of revenues, it is top of the charts though. Based on share of subscription revenues in 2020, Netflix controlled 38 per cent, Amazon Prime 19 per cent and Disney Hotstar 21 per cent of the US $ 504 million video on demand revenue.
Shergill said that the subscription video on demand (SVOD) market has a 40-million base and it is growing and 10-11 per cent annually as more internet users join in. According to her, customers have an appetite for two to three SVOD services. MPA projects that the subscription VOD market will hit 88.7 million subscribers in 2021.
Analysts say that the drop in prices will help Netflix to expand its customer base and make up for the loss in revenue. Netflix faces tough competition in its US home market and clearly focusing on India. “Indians are hungry for entertainment and will consume more. India will be one of the most promising SVOD market globally as well as in the APAC region,” said Shergill.
Elaborating on its bundled deals with its telecom partners, Gill said the one with Reliance Jio will see not change in prices and the experience will remain the same. However if one is a Vodafone Idnia customer who availed one year of free Netflix Basic plan before Dec 14, they will be upgraded for the same price for better Netflix experience and once can select any other plan. However if one redeems the 1 year of free Netflix after Dec 14, one will get get access to a Standard Plan.