Netflix has slashed its subscription prices significantly in India, a vital market for growth among the major U.S. streaming services. The price changes, revealed Tuesday, go into effect immediately, Netflix said.
The cheapest Netflix plan — the mobile-only option, which allows lower resolution consumption on tablets and smartphones — now costs just $1.96 (149 rupees) in India. That’s down 25 percent from the former price of 199 rupees, or $2.62.
But analysts believe the price cut to Netflix’s “basic” subscription offering — the entry-level, full-service option — will be the most consequential for Netflix’s potential growth in the country. The basic plan has dropped 60 percent from $6.57 (499 rupees) to just $2.62 (199 rupees).
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“The most meaningful reduction is the basic price plan, which opens up the funnel for significant new customer growth,” says Mihir Shah, vp and head of India for Media Partners Asia (MPA), a regional consultancy and analyst firm.
Netflix’s “standard” and “premium” plans, meanwhile, which offer users higher video quality, have dropped to $6.57 (499 rupees) and $8.55 (649 rupees) — from $8.55 (649 rupees) and $10.59 (799 rupees), respectively.
Although Netflix has a significant subscriber lead in many markets of Asia, it is believed to trail rivals Disney+ Hotstar and Amazon Prime Video considerably in India. According to MPA’s forecasts, Netflix will have 5 million subs in the country by the end of December, following Disney+ Hotstar with 46 million and Amazon Prime Video with 19 million.
The sudden price reduction at Netflix is a clear choice to boost subs and overall reach at the expense of revenue per user. Previously, Netflix’s considerably higher subscription rates meant that the company commanded 29 percent of the subscription video market by revenue, with Disney+ Hotstar taking 25 percent and Amazon holding 22 percent (the figures don’t include AVOD revenue, where Disney+ Hotstar makes much of its money in India).
The shift from occupying a purely premium segment of the market to a more mass category also means Netflix “will have to go deeper local and more regional in their content,” Shah adds.
