Netflix said on Wednesday that it will roll out a cheaper subscription plan in India, one of the last major growth markets for global companies, as the streaming giant encrypts to find ways to accelerate its slow growth worldwide.  The company added 2.7 million new subscribers in the quarter that ended in June this year, it said today, far fewer than the 5 million figure it had expected earlier this year.
The company said lowering the subscription plan, starting at $ 9 in the US, will help it reach more users in India and expand its parent subscriber base. The new plan will be available in India in the third quarter. According to third-party research companies, Netflix has fewer than 2 million subscribers in India.
Netflix began testing a cheaper subscription plan in India and some other markets in Asia last year. The plan limits the use of the service to a mobile device and offers only standard definition view (~ 480p). During the test period, which was active two months ago, the company charges users as little as $ 4.
The company did not specify the exact amount it intends to charge users for the cheaper mobile network plan. During the trial period, Netflix also gave some users the opportunity to receive a one-week subscription. The company also did not say whether it intended to bring the cheaper plan to other markets. TechCrunch has reached out to Netflix for more details. (Update: Netflix refused to prepare at this point.)
"After several months of testing, we have decided to roll out a cheaper screen plan in India to complement our existing plans. We believe this plan will launch in 3. quarterly, will be an effective way to introduce a larger number of people into India to Netflix, and to further expand our business in a market where Pay TV ARPU is low (under $ 5), "the company said in its quarterly earnings report.
Selling an entertainment service in India, where GDP per capita is below $ 2,000, is extremely challenging. The vast majority of companies that have performed very well in the country offer their products and services at a very low price.
Just look at Spotify, who entered India earlier this year and for the first time decided to offer full access to the service at no cost to local users. Even the premium option that includes higher quality playback costs Rs 1[ads1]19 ($ 1.6) per month.
It is not to say that winning in India, the home of more than 1.3 billion people, cannot be rewarding. Disney-owned streaming service Hotstar, offering 80% of the content directory at no charge, has collected more than 300 million monthly active users. There are about 500 million internet users in India, according to industry reports.
In fact, Hotstar has set a global record for most concurrent views of a live event – around 25.3 million users – during the recently completed ICC Cricket Cup. It broke its own previous records. Hotstar's free offer comes with ads, while its free additional cost costs Rs 999 ($ 14.5) for years of access.
Amazon, Another global competitor of Netflix, bundles its Prime Video streaming service into its Prime membership, which includes access to faster delivery of packages and music service for Rs 999 a year.
For Netflix, the decision to lower pricing in India comes at a time when it has raised the subscription cost in many parts of the world in recent quarters. In the US, Netflix earlier this year said it would increase the subscription price by up to 18%.
During a visit to India early last year, Netflix CEO Reed Hastings said the country could eventually appear as the site It would bring the next 100 million users to the platform. "The Indian entertainment industry will be much bigger over the next 20 years due to investment in payment services such as Netflix and others," he said.
So far, Netflix has to a large extent tried to lure customers through its original series. (Many popular American shows such as NBC's "The Office" available on Netflix's US directory are not offered in the Indian avenue.) The company, which has produced more than a dozen original shows and films for India, presented five more times this week as is in progress.
"We see a nice, steady increase in engagement in India. Growth in that country is a marathon and we are in it for a long time," said Ted Sarandos, chief executive of Netflix, during a earnings call today.