As Netflix face slowing growth and increased streaming competition in the US, the company is looking to invigorate its growth overseas. This week, Netflix dropped the price of its basic plan in India by 60% from roughly 499 rupees ($6.60) to 199 rupees a month while reducing its higher quality plans by similar amounts.
But the most noteworthy pricing change comes at Netflix India’s lowest tier, its mobile plan, targeting mobile phone and tablet users, which is now priced at 149 rupees, down from 199 rupees.
Netflix’s focus on India’s mobile viewers is in line with recent findings from mobile analytics firm App Annie that Indian consumers spend nearly five hours per day on their Android mobile devices (Android devices account for 95% of the country’s mobile user base), and downloaded 4.8 billion games in the first half of 2021, surpassing all Android mobile gamers globally.
The steep mobile discount makes India the third-cheapest Netflix subscription available after Pakistan, where the company’s mobile plan costs 250 rupees, and Kenya, where Android users can log onto Netflix for free.
Outside of the India and Pakistan region, the five next cheapest Netflix mobile subscriptions are in Africa and Southeast Asia. These changes come roughly a year after the company raised its prices in the US and the UK, and just a month after it hiked prices in other European countries like the Netherlands and Belgium. Netflix’s strategy of lowering its prices in India reflects the company’s hunt for growth amid a glut of new streaming services.
Although Netflix beat its subscriber growth estimates for the quarter ending Sept. 30, growth simply isn’t as robust as in years past. That’s partly due to increased competition, but also indicates market saturation in the company’s key markets in the west.
And while other streaming services like Disney+, Apple+, and even Amazon Prime Video are all still building their original streaming content libraries from scratch, the earlier efforts of Netflix have afforded it a very deep well of original television and film content, in many cases region-specific, designed in part to promote its international growth.
According to consulting firm Omdia, Netflix has roughly 4.4 million subscribers in India. But that number falls far short of Netflix CEO Reed Hastings’ projection in 2018 that the company might win around 100 million subscribers in the country. When compared to its primary international competition, Netflix is faring poorly against its competition in the country. A report from Media Partners Asia projects that Disney+ Hotstar, a collaboration between Disney and its Star India subsidiary, will have 46 million subscribers by the end of this year, and Amazon Prime Video, which already had 18 million subscribers in India this summer, could reach nearly 22 million by year’s end.
This massive lead isn’t likely to evaporate anytime soon given the efforts of Netflix’s rivals.
In addition to its 70 original Indian film and TV projects, which is on par with Netflix’s India-specific offerings, this year Amazon also launched miniTV in the country. The miniTV service is a free video streaming feature within the Amazon India app providing access to short drama, comedy videos that could help drive paid more subscribers to the company’s Prime Video service.
And beyond filmed entertainment content, one of Disney+ Hotstar’s secret weapons is its license to stream popular English Premier League soccer and Indian Premier League cricket matches on the service.
This subscriber disparity is the driving force behind Netflix’s attempt to win a larger slice of India’s estimated 500 million smartphone users via its lowest mobile tier subscription. But pricing can only get Netflix so far. Netflix shows like Sacred Games, Taj Mahal 1989, She, and Ghoul have won attention with some viewers in India, but originals from Amazon Prime Video and Disney+ Hotstar continue to dominate the local popularity charts.
In an email, Netflix declined to discuss its business strategy, saying only “we are reducing prices so that more people in India can enjoy our growing slate of shows and films from India.”
“We’re just starting in India. It’s very easy to look at these things and think that we make it look easy. It’s not, it’s very hard,” Netflix co-CEO Ted Sarandos said in an interview this summer discussing the company’s India strategy. “What [we have] found out is that as good as you can be in one country, it tells you almost nothing about the next one…there’s a trial and error period that we’ve been deep in right now.”