Netflix India slashes subscription fee by 60%

Streaming giant Netflix on Tuesday slashed its subscription fees in India to lure more viewers to its platform. The basic plan is now 60% cheaper than it used to be. Instead of paying Rs 499 per month, viewers can access Netflix on any device for Rs 199 now. The mobile-only plan is down to Rs 149 per month instead of Rs 199. The standard and premium plans now cost Rs 499 and Rs 649 per month, instead of Rs 649 and Rs 799, respectively.

Interestingly, in another development, Amazon India hiked its annual subscription fees for its Prime service which includes free and quick delivery, video and music streaming among other benefits starting December 14. The membership now costs Rs 1,499 per annum instead of Rs 999. A mobile-only Rs 89 per month plan, which was introduced in January 2021, seems to have been discontinued by the company.

Karan Taurani, senior vice president, Elara Capital, says that Netflix, which entered the Indian market with a premium positioning, is now targeting mass audiences with its more affordable pricing options. The platform launched a pocket-friendly mobile-only plan in July 2019.

India’s video streaming market is dominated by advertising-led consumption. “The video streaming business in India did get a boost during the last two years because of the pandemic but the total number of paid subscribers is just about 96 million,” says Shailesh Kapoor, CEO, Ormax Media.

According to Media Partners Asia, Netflix, Amazon Prime Video and Disney+ Hotstar account for 83% of direct paid video streaming subscribers in India. Netflix is estimated to have 5.5 million paying subscribers in India and lags far behind Amazon Prime Video (21.8 million) and Disney+ Hotstar (46 million).

Other platforms, too, are rejigging their pricing strategy. In September, Disney+ Hotstar altered its subscription plans; it discontinued the popular Rs 399 per annum plan and introduced a mobile-only plan for Rs 499 per annum. Further, all content on the platform can now be accessed for Rs 899 per annum (two devices) or at Rs 1,499 per annum (four devices). Zee5 has been offering its annual membership at a discounted rate of Rs 499 from June 2021.

Netflix’s pricing even for its basic plan is significantly more expensive than its competitors at Rs 2,388 per year. The platform’s mobile-only plan at Rs 1,788 per year costs more than thrice that of Disney+ Hotstar’s mobile-only plan (Rs 499 per year). Despite this wide gap, analysts expect the Rs 149 per month mobile-only plan to be a growth driver for Netflix, considering that a majority of OTT consumption in the country happens over mobile phones.

In December 2019, Netflix CEO Reed Hastings said that the company would invest Rs 3,000 crore behind creating original content in India. In 2021, the platform planned to introduce 41 original releases. Kapoor says, “Netflix is not looking at the India market from a profitability point of view in the short-term. The focus is on growing the audience base in this fairly new market.” The company’s revenue surged 65% in FY21, and it earned Rs 1,526.36 crore from its India operations.