Jobaaj Stories
Netflix has slashed its subscription prices significantly in India, a vital market for growth among the leading U.S. streaming services. The price changes revealed on Tuesday will go into effect immediately. This price-cut is for the first time since launching five years ago in South Asian nations.
The cheapest Netflix option, the mobile-only plan- which allows lower resolution consumption on tablets and smartphones-now costs just 149 Rupees in India, that's down 25% from the former price of 199 rupees in India.
It is believed that the price cut to Netflix's basic subscription offering- the entry-level, full-service option will be the most consequential for Netflix's potential growth in the country. The basic plan has dropped 60% from 499 rupees to just 199 rupees. Netflix's “standard” and “premium” plans, meanwhile which offer users high video quality, have dropped to 499 rupees and 649 rupees from 649 rupees and 799 rupees, respectively.
Netflix's date for the price reduction, Dec 14, appears to be deliberate, as that is the same day that rival Amazon Prime Video India is upping its rates. Prime's video's annual subscription plan jumps 50% from 999 Rupees to 1499 Rupees. Prime video's monthly plan is rising from 129 Rupees to 179 Rupees, while the quarterly plan is increasing from 329 Rupees to 459 Rupees.
Indian streaming market leader Disney Plus Hotstar raised its rate in September. The cheapest plan of 499 Rupees annual plan is for mobiles only, its 899 Rupees annual plan covers only two devices while 1499 Rupees plan is up to 4k quality and across four devices.Disney+Hotstar also has an advertising-supported free tier.
Although Netflix has a significant subscriber lead in many markets of Asia, it is believed to trail rivals Disney+Hotstar and Amazon Prime video considerably in India. According to Netflix India, they are rolling out a new auto-upgrade feature for existing members starting Dec14, wherein the service will show a pop-up that allows users to auto-upgrade their plan to the next tier if they are comfortable paying the existing prices.
The sudden price reduction at Netflix is a clear choice to boost subscribers and overall reach the expense of revenue per user. Previously, Netflix's considerably high subscription rates meant that the company commanded 29% of the subscription video market by revenue, with Disney+Hotstar taking 25% and Amazon holding 22%(the figures do not include AVOD revenue, where Disney+Hotstar makes much of its money in India).
With the move from occupying a purely premium category to a more mass category, Netflix plans to cater to local and regional content preferences. This is not the first time the global streaming giant has taken a different pricing route in India. While it initially maintained that it will not slash prices in the country even given its extremely price-sensitive user base, over the past few years, Netflix has experimented with pricing models in India. A couple of years back, it used the Indian market to pilot its “mobile-only” subscription plan.
This latest pricing cut follows a healthy third-quarter growth for the Platform that streams popular shows like Money Heist and Squid Game. In the third quarter of 2021(July-September), Netflix generated total revenue of nearly USD 7.5million up from about USD 6.44 billion in the corresponding quarter of 2020.
