As part of its aggressive push to expand its business in India, Netflix has slashed the prices of all its subscription plans. The Indian market is crucial for Netflix and has millions of untapped users. The entertainment streaming service lowered the price of its flagship basic plan by 60 percent, from Rs 499 to Rs 199. Customers can also access content on any device, including television. In July 2019, the company reduced the price of its mobile-only monthly plan in HD quality from Rs 199 to Rs 149. According to industry assessments, the plan accounts for roughly half of Netflix’s subscriber base.
“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, Netflix India VP, referring to actors and a TV show.
Netflix is slashing its price close to the same time that Amazon Prime usually increases its yearly subscription price from Rs 999 to Rs 1,499. Therefore, the gap between Netflix and Amazon Prime (whose monthly average payout is now Rs 125) is closing. However, Prime members have access to exclusive features like free next day delivery on Amazon.com and music streaming.
Netflix is far behind in terms of subscription customer numbers according to Media Partners Asia (MPA). It is expected to add 5.5 million subscribers by the end of 2021, which is far less than those of Disney+ Hotstar (46 million) and Amazon Prime (21.8 million).
Nevertheless, it ranks high in terms of revenues. According to the share of subscription revenue in 2020, Netflix accounted for 38 percent, Amazon Prime for 19 percent, and Disney+ Hotstar for 21 percent.
Shergill noted that the subscription video on demand (SVOD) market has 40 million subscribers, and that it is growing by 10-11 percent annually. According to her, customers are willing to subscribe to two or three SVOD services. MPA predicts that the number of SVOD subscribers will reach 88.7 million by the end of 2021.
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The drop in prices will help Netflix expand its customer base and make up for its revenue loss, according to analysts. Netflix is facing tough competition in its home market in the US and is clearly focused on India since the audience here is expected to consume more content. India is one of the most promising SVOD markets, according to Shergill. She elaborated, “As Indians, we love great entertainment. Whatever your mood, tastes or plan, Netflix is now even more accessible.
She mentioned Netflix’s bundled deals with its telecom partners and said that Reliance Jio plans will not see a change in prices and the experience will remain the same. Vodafone India customers who signed up for a year of free Netflix Basic plan before December 14 will be able to upgrade for the same price to a better Netflix experience, and are also free to choose any other plan. Those redeeming the one year of free Netflix after December 14 will get access to a Standard Plan.