Netflix Experiments With Long Term Subscription Plans In India
Netflix is testing long term subscription plans in India, people privy to the development told ET, as the company looks for new subscriber growth in the country.
As part of this test, ET has learnt that the video streaming service is offering 3-month, 6-month, and 12-month plans to new users at a discounted rate, with savings ranging from 20% to 50% depending upon the plan.
To be sure, rivals Hotstar, ZEE5, Amazon Prime Video, and Reliance-backed ALT Balaji have been offering similar annual plans in the country for some time now. Times Internet’s MX Player* currently operates on a free ad-supported model.
This test, however, comes days after Netflix chief executive Reed Hastings announced that they are set to spend Rs 3,000 crore on content programming in India in 2019-2020, thereby underlining the increasing importance of one of the fastest-growing global market to the streaming major.
“We believe that our members may value the flexibility that comes from being able to pay for a few months at once. As always, this is a test and we will only introduce it more broadly if people find it useful” a Netflix spokesperson told ET.
Over the past year, Netflix has been taking several measures to broaden access to its service, which is currently among the costliest video streaming service in the country.
In July this year, Netflix launched a mobile-only plan at Rs 199 per month, which was less than half of its regular subscription price that ranges between Rs 500-Rs 800 based on video quality and the number of concurrent screens. Earlier this year, the company also experimented with weekly plans as well as offering free content access to non-members in the country for a limited time.
In a post-earnings interview in October this year, Netflix chief product officer Greg Peters had said that they will be exploring different pricing structures to increase its subscriber base in emerging countries where the market conditions are different.
“We think about revenue as a guiding principle for us. We do these different tests and try to figure out what is the right set of plans that have the right benefits, the right features that are delivered at the right price for the subscribers in any given market” Peters said.
With the second-largest Internet base in the world and growing adoption for online content, India is crucial for Netflix’s future growth, since the service is effectively blocked in China and is seeing a slowdown in its subscriber growth in the United States. Only 0.5 million of the total 6.8 million paid subscriber additions in the recently concluded quarter came from the United States while the remaining 6.3 million paid additions came from international markets.
India’s video streaming market is set to touch $5 billion by 2023 from $500 million last year, according to a report by Boston Consulting Group. The paying subscriber base is expected to rise to 40-50 million users by 2023, as per its estimates.