Netflix, the global streaming giant, has confirmed that it will be rolling out a less expensive subscription plan for India. This was announced at the Q2 2019 earnings call, as the company looks to accelerate growth in India and get more subscribers on board. A launch date for this new subscription plan is not confirmed, and neither are the exact specifics in terms of the cost or the content that it will allow access to, but it will be made available in this quarter itself.
“After several months of testing, we’ve decided to roll out a lower-priced mobile-screen plan in India to complement our existing plans. We believe this plan, which will launch in Q3, will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay TV ARPU is low (below $5). We will continue to learn more after launch of this plan,” said Reed Hastings, CEO, Netflix during the earnings call. However, if we are to go by what Netflix has hinted at, the new plan could very well be priced just under the $5 price point, which would roughly translate to around Rs 300 per month or lower. Could we also see annual subscription options now?
In India, Netflix faces competition from the likes of Hotstar which offers Hotstar VIP at Rs 365 per year and Hotstar Premium plan priced at Rs 199 per month or Rs 999 per year, Amazon Prime Video which is priced at Rs 129 per month or Rs 999 per year for the Prime subscription that also includes other benefits, Sony Liv which charges Rs 499 per year Premium and Zee5 which costs Rs 999 per year for the All Access Pack. At present, Netflix offers three subscription plans in India—Rs 500 (Standard Definition and streaming on one device), Rs 650 (High Definition and streaming on two devices) and Rs 800 (Ultra HD streaming on 4 devices simultaneously).
The earnings call suggested that Q2 2019 was not a good period for Netflix. The company added 2.7 million new subscribers globally in the quarter ending June, which is significantly lesser than the 5 million new subscribers they had estimated. The streaming service also lost around 130,000 subscribers in the United States, perhaps because of the increase in subscription prices earlier this year. “Our missed forecast was across all regions, but slightly more so in regions with price increases. We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions,” says Hastings.