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Thursday, December 05, 2019

Explained: Why Netflix has a mobile-only plan for India

Netflix is considered to be the most successful video streaming platform in the world. It has 151 million paid subscribers in over 191 countries.

Written by Anuj Bhatia , Edited by Explained Desk | New Delhi | Updated: July 27, 2019 12:59:30 pm
The streaming service provider hopes it can make inroads in a price-sensitive market like India with a mobile-only subscription plan. 

Netflix’s global domination is incomplete without a strong foothold in India, a country which has the second-largest number of Internet users in the world. This is the market where Netflix CEO Reed Hastings expects the next wave of users, at least a 100 million, to come from. To achieve its goal of becoming the most popular video streaming app in India, Netflix has launched a new low priced mobile plan that costs Rs 199 ($2.88) a month to take on Disney’s Hotstar and Amazon’s Prime Video. The streaming service provider hopes it can make inroads in a price-sensitive market like India with a mobile-only subscription plan, which will allow more users to subscribe to Netflix at a nominal cost.

Netflix is losing subscribers in the US

Netflix is considered to be the most successful video streaming platform in the world. It has 151 million paid subscribers in over 191 countries. Netflix’s reported budget on the original content is a staggering $15 billion in 2019. But to fund those binge-worthy movies and TV shows, it needs more money.

Read | Netflix documentary recaps the Cambridge Analytica scandal

Netflix is nearing its peak subscriber base in the US and in key international markets. In January, the streamer announced it was increasing its rates by up to 18 per cent, depending on the subscription plan. The move backfired and the company lost 130,000 subscribers in the US in the second quarter of 2019 and only added 2.7 million new global subscribers, after projecting it would add nearly 5 million.

Netflix follows an ad-free model and is heavily dependent on the income earned through its existing subscribers. In the US, and with rival Disney+ and Apple TV+ launching later this year, it might face a difficult time convincing the existing subscriber base.+

Netflix Rs 199 plan, Netflix Rs 199 mobile plan, Netflix mobile plan, Netflix Rs 199 plan India, Netflix Rs 199 plan mobile, Netflix, Netflix India, Hotstar, Amazon Prime Video The Rs 199 mobile-only plan is half the price of the basic plan, which costs Rs 499 a month.

Netflix needs India badly to grow internationally

With the growth prospects looking bleak in the US and other international markets, Netflix is pinning its hopes on India. The country offers a golden opportunity for Netflix to increase its chances to tap in into a huge pool of users who are just getting into the internet for the first time through smartphones. According to the Assocham-PWC study, smartphone users are expected to rise to 84 per cent to 859 million by 2022. But the increase in smartphone penetration has only upended video consumption on mobile devices, thanks to Jio and Airtel for introducing cheap data plans in the country. For Netflix, it makes a lot of sense to go after Indian consumers and get them addicted to its hit shows. The new Rs 199 monthly plan does exactly what it promises. It allows users to stream content through a smartphone or tablet at any one time. That’s the whole idea behind the mobile-only plan. Netflix hopes the mobile-only plan will broaden the access of Netflix experience beyond urban centers, something the streamer couldn’t achieve with the existing basic plan for which consumers have to shell out Rs 499 a month.

…but Netflix faces tough competition from Hotstar, Zee5

Netflix aims to corner the video streaming market with the newly created Rs 199 mobile-only monthly plan in India. But at the heart of Netflix’s problem is the content. Netflix is seen as the video streaming service for the English-speaking consumers and that really reflects in the choice of content on disposal.

Rivals aren’t feeling the same issue. Hotstar is best known for broadcasting live cricket matches, which has worked for Disney-owned streaming service. Amazon Prime Video is pitched as the video streaming service that offers a mix of regional (and not just Bollywood) and international content. Meanwhile, other players like Zee5 and Alt Balaji have identified a set audience that keeps coming to their platforms.

This isn’t to say that Netflix content strategy hasn’t worked until now. A show like Sacred Games, starring Saif Ali Khan and Nawazuddin Siddiqui, has gained international popularity. The streamer has recently commissioned many more Hindi-language shows that might help gain followership in mass centers of India.

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