Netflix Slashes Prices in India to Boost Subscription Growth
India is a key market for growth among the major U.S. streaming service platforms like Netflix, Disney+ Hotstar, and Amazon Prime Video. Today, Netflix has announced the significant price change of its cheapest subscription plans, which are the mobile-only option and the “Basic” plan. The “Standard” and “Premium” plans have dropped in price as well.
Available on tablets and smartphones, the lower resolution mobile version used to be priced at 199 rupees, which is $2.62. As of now, it costs 149 rupees ($1.96), which is a 25% decrease. Meanwhile, the basic, entry-level plan has dropped 60% from 499 rupees ($6.57) to just 199 rupees ($2.62).
Analysts believe that the basic subscription plan will most likely bring considerable growth for Netflix in India. Mihir Shah, VP and head of India for Media Partners Asia (MPA), a regional consultancy and analyst firm, said “The most meaningful reduction is the basic price plan, which opens up the funnel for significant new customer growth.”
Netflix’s standard and premium plans, offer higher video quality and used to be priced at 649 rupees ($8.55) and 799 rupees ($10.59) respectively. Currently, the standard plan costs 499 rupees ($6.57) whereas the premium plan is now 799 rupees ($10.59).
When Netflix launched in India in January 2016, it started at $7.50 per month in order to draw in wealthy Indians. Thus, the service was more expensive than its competitors, even with the cheaper mobile-only plan.
India remains a major growth market for Netflix, which launched there in January 2016 with a roughly $7.50-per-month plan aimed at affluent Indians. Even with its lower-cost, mobile-only plan, Netflix is still more expensive than its larger competitors
In contrast, Disney+ Hotstar has it’s mobile-only plan priced at 499 Rs (rupees) per year, the “Super” plan is 899 Rs ($11.82), and the “Premium” costs 1499 rupees per year ($19.70).
Although Netflix has a remarkable amount of subscribers in the Asian market, Disney+ Hotstar and Amazon are definitely on top. MPA predicts that Netflix will have 5 million subscribers in India by the end of December. However, Disney+ Hotstar will potentially have 46 million and Amazon Prime Video is predicted to have 19 million.
Additionally, when Netflix had its higher subscription rates, the company commanded 29% of the subscription video market by revenue. Disney+ Hotstar takes 25% and Amazon holds 22% (not including AVOD revenue).
Clearly, Netflix has to catch up quickly if they want to compete with the other streaming giants. That’s why the sudden price reduction is an obvious choice to boost subscription growth and overall reach at the expense of revenue per user.