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Netflix lowers prices across its streaming plans to woo its Indian audience

By Saima Siddiqui 
Updated Date

New Delhi: The up-market, premium, OTT (over-the-top) American video streaming platforms in India, Netflix, announced an 18-60% rate cut across plans, in an effort to woo its wider audiences and deepen its penetration amid intense competition from Disney+Hotstar, Amazon Prime and a host of other Subscription Video on Demand (SVOD) players in India.

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The move comes at a time when the platform is preparing to cast its net wider with more mass-market content in collaboration with known Bollywood directors. Netflix’s mobile-only plan, earlier priced at Rs. 199 per month, will now cost Rs. 149. The basic plan that allows access to all content on anyone device is priced at Rs. 199 versus Rs. 499 earlier. The standard plan that allows access across two devices now comes for Rs. 499 and the premium plan that works across four devices costs Rs. 649 compared to Rs. 799 earlier and will be effective Tuesday.

“The new price plans are in line with our strategy to provide content that goes deeper into the country and aims to reach wider audiences,” Monika Shergill, vice-president, content, Netflix India told Mint. The platform is specifically introducing a diverse range of titles, Shergill said, both films and series, that are aimed at targeting masses, while already investing in dubbing and subtitling to transcend linguistic barriers. The coming months will see local productions in collaboration with popular directors such as Sanjay Leela Bhansali (Heeramandi), Vishal Bhardwaj (Khufiya), Zoya Akhtar (an Archie Comics adaptation), Madhuri Dixit (Finding Anamika) and Kapil Sharma, besides second seasons of hits like She, Mismatched, Masaba Masaba, Fabulous Lives of Bollywood Wives and Jamtara-Sabka Number Ayega, all of which require wide distribution.

The move, Shergill said, also stems from the global traction that Indian titles have gained over the past few months and the higher number of users the platform has seen come on board during the past year-and-a-half of the pandemic.

“India is a big market with ample penetration opportunity in tier-two and tier-three towns, increasing smartphone users and cheaper data prices, which will help Netflix scale its subscriber base in the medium to long term,” Karan Taurani, senior vice-president at Elara Capital Ltd said. The Reed Hastings-owned platform that was earlier targeting only niche audiences and even started bundling with telco services later, has clearly realized the potential of the market and strengthened its focus to reap benefits of a viewer base that will only become more willing to pay with time, he added.

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“The US subscriber base has been plateauing and in non-US territories, Singapore and China are already well penetrated while data is south Africa is not as cheap. So, they have to do things differently for India,” Taurani said. The move also augurs well given that India’s advertising and subscription-driven OTT markets that are skewed in an 80:20 ratio in favour of the former as of now, will see significant growth for the latter, over the next five to ten years.

The most meaningful reduction is the basic price plan which opens up the funnel for significant new customer growth, said Mihir Shah, vice-president and head of India, Media Partners Asia (MPA).

“It will also mean that they will have to go deeper, local and more regional in their content,” Shah added. According to MPA analysis, around 50% of India’s SVoD (subscription video-on-demand) market was taken up by Disney+ Hotstar in 2021, about 19% went to Amazon Prime Video and around 5% to Netflix.

This could be with good reason. Netflix remains top of the price heap despite slashing prices in India where the average OTT platform costs Rs. 500 annually, media experts said. Prime Video and Disney+ Hotstar that both announced hikes recently, price ad-free content at Rs. 1,499 per year, across devices. In contrast, even now, the Netflix basic plan will cost over Rs. 2,300 annually.

While the Disney+ Hotstar mobile-only plan comes for Rs. 499 per year and the Amazon Prime Video membership can be accessed by Airtel pre-paid customers starting at Rs. 89 a month, the Netflix mobile plan will cost users Rs. 1,788 per year.

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“Every service has its own unique strategy and from an India point of view, we’re only trying harder to be the best service for people who are price-sensitive but also conscious of value,” Shergill said.

According to data from business intelligence firm Tofler, Netflix Entertainment Services India LLP, the Indian arm of Netflix, reported a gross turnover of Rs. 1529 crore in FY21, up 66% from Rs. 923 crore the previous fiscal. Its profits stood at Rs. 10.72 crore.

However, Netflix reaching out to a larger target audience and making its service more affordable, could be a negative for broadcaster OTT apps as competition intensifies, said Taurani who now sees players compete neck-and-neck. “This may also keep a check on their ARPUs, in case they have plans to increase the same and will also lead to a sharp rise in content cost, which is expected to increase almost 30% annually over the next two years as existing apps spend more and more new OTT apps emerge,” he said.

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