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FILE PHOTO: The Netflix logo is seen on their office in Hollywood, Los Angeles
Coming soon to some Indian mobiles.
ARE YOU STILL WATCHING?

Netflix dangles a $4 bait to tap new users in India

By Ananya Bhattacharya

Netflix is finally offering Indians the one thing they care most about: cheap subscription plans.

On March 26, the video streaming platform launched the test run of a mobile-only plan for Rs250 ($4) a month—half the price of its basic plan.

The latest plan will be available to randomly selected new users and will exclude existing subscribers.

“We are always looking for ways to make Netflix more enjoyable and accessible,” a company spokesperson told Quartz. “We will be testing different options in select countries where members can, for example, watch Netflix on their mobile device for a lower price and subscribe (for shorter time periods).”

The California-based company has for long faced criticism for its pricing in India. A basic monthly subscription plan of Netflix in India is five times more expensive than American rival Amazon Prime Video’s plan (which comes bundled with expedited shipping from Amazon.in) and costs over twice as much as local competitor Hotstar.

But even as Netflix looks to solve its pricing problem with the new test run, there’s a catch.

For the new cohort of penny-pinching subscribers, the content will only be available in standard definition. And it might be a while before Netflix roles out this test version at scale. “Not everyone will see these options and we may never roll out these specific plans beyond the tests,” the Netflix spokesperson said.

Bid for a bigger audience

Lowering prices will help tap less-affluent and small-town users.

“If you see the market as a pyramid, Netflix has only skimmed the top with its pricing. Given the entertainment budget in India is between Rs300 and Rs400 for each person, it’s already above the average Indian consumer’s budget,” Sumit Saxena, co-founder of research and consultancy firm Pixights, told Quartz.

Here’s what Netflix costs in India currently:

Basic Standard Premium
Indian price (per month) Rs500 Rs650 Rs800
HD No Yes Yes
Ultra HD No No Yes
Number of screens you can watch at the same time 1 2 4
Watch a video on your laptop, TV, smartphone, and tablet Yes Yes Yes
Unlimited access to TV shows and movies Yes Yes Yes
Cancel any time Yes Yes Yes
First month free Yes Yes Yes

In November last year, Netflix had run a similar experiment in Malaysia, offering a mobile-only subscription for 17 Malaysian ringgit ($4).

Netflix’s plan to test the pilot in India is perhaps triggered by the Telecom Regulatory Authority of India’s (TRAI) new pricing regime, where each TV channel has its own MRP capped at Rs19 per month. “There’s a new context to price benchmarks. Earlier it was competing with a few hundred rupees per month for Amazon Prime Video or Hotstar but comparing a Rs17 Star Plus (subscription) to Netflix’s Rs800, it’s a stark difference,” said Saxena.

In the coming years, Netflix has to stay on its toes. Competition in India’s OTT sector, which is slated to surpass $5 billion by 2023, will become even stiffer. In addition to rivals Amazon Prime Video and Hotstar, new behemoth entrants like Disney and Apple could also come fighting for a piece of the India streaming pie.

The dynamics could change drastically if, say, Disney pulls all its content off Netflix, Saxena suggests.